New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter I - Franchise and Certain Business Taxes › Subchapter A - Business Corporation Franchise Tax › Part 4 - APPORTIONMENT › Subpart 4-2 - SPECIFIC APPORTIONMENT RULES › Section 4-2.15 - Receipts received by credit card processors

Current through Register Vol. 46, No. 28, July 10, 2024
(Tax Law, section 210-A(5)(c)(4))
(a) For purposes of this Part, the following
					 definitions shall apply:
(1) Credit card
					 processor means an entity, whether it is a corporation or an unincorporated
					 entity, that derives 50% or more of its gross receipts from any or all of the
					 following: credit card authorization processing, clearing processing,
					 settlement processing, and volume-based activities. In the case of a combined
					 report, whether an entity is a credit card processor is determined on a
					 corporation-by-corporation basis. The apportionment rules described in this
					 section and section 210-A(5)(c)(4) shall apply only to those receipts generated
					 by the entities in the combined report that qualify as credit card
					 processors.
(2) Authorization
					 processing means the routing of transaction data from a merchant to an acquirer
					 bank or from an acquirer bank to an issuer bank for approval or rejection and
					 the routing of that approval or rejection back to the originating party.
					 Authorization includes the various data enhancement and security services the
					 credit card processor performs on the transaction data during the process of
					 routing the data between the acquirer bank and the issuer bank.
(3) Clearing processing means the service of
					 processing of a batch of hundreds or thousands of previously-authorized
					 transactions to determine the net amounts due to or from issuer banks and
					 acquirer banks.
(4) Settlement
					 processing means the service of delivering instructions for the actual movement
					 of funds between issuer banks and acquirer banks that reflects the amounts
					 determined to be due to or from each entity during clearing
					 processing.
(5) Credit card
					 processor's network means the hardware and software that enable a credit card
					 processor to facilitate the transfer of financial transaction information to
					 and from issuer banks and acquirer banks and, in the case of a third-party
					 processor, to and from merchants, including by any of the following: receiving,
					 processing, and relaying such financial transaction information.
(6) Volume-based activities means services
					 that are charged to customers measured on the dollar volume or number of credit
					 card transactions, but not those activities described elsewhere in this
					 subdivision.
(7) Access point means
					 a physical location at which a credit card processor's customers access or may
					 access the credit card processor's network.
(8) Percent of New York State access points
					 means the number of access points located in New York State divided by the
					 total number of access points in the United States.
(9) Acquirer bank means a financial
					 institution that contracts with merchants to accept payments by credit
					 card.
(10) Issuer bank means a
					 financial institution that issues credit cards to account holders.