New York State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in New York, with full citations and the original source on every page.
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A Canadian aluminum manufacturer wants to ship a metal-bearing byproduct to an unrelated New York processor, who will reclaim the aluminum for a fee and ship it straight back to Canada, disposing of the unusable waste. Does owning that material while it's being processed in New York, by itself, create New York franchise tax nexus?
No. Aluminum Company of Canada, Ltd. proposed shipping dross (an aluminum-bearing byproduct of its primary aluminum manufacturing) to an unrelated New York processor, who would reclaim the aluminum fo…
An out-of-state bank stations a representative in New York and plans to open a loan production office here -- one that solicits loans, gathers credit information, and does appraisals, but doesn't approve loans, disburse funds, or accept deposits (all of that happens back at the bank's home state). Does this create New York franchise tax liability, under either the banking-corporation tax or the general business-corporation tax?
Neither. Lloyds Bank California, a California-chartered bank with its principal offices in Los Angeles, stationed a representative in New York City and planned to open a New York loan production offic…
An out-of-state corporation's only other New York contacts are protected order-solicitation activity under the federal Interstate Income Act (P.L. 86-272). But a former employee has leased a hotel suite in New York City on an annual, renewable basis since 1972, under a formal apartment-style lease, reimbursed by the company, to guarantee accommodations for visiting executives. Does that annual hotel-suite lease go beyond P.L. 86-272's protection and create New York franchise tax nexus?
Yes, the annual hotel suite creates nexus. Timex Corporation, a Delaware corporation headquartered in Connecticut, had no other New York contacts besides protected order-solicitation activity (orders …
A foreign holding company owns 100% of two operating subsidiaries based in New York City, but has no employees, office, property, or bank accounts of its own in New York, doesn't lend to or guarantee loans for its subsidiaries, and is run entirely by non-resident directors from abroad. Its only New York-resident officer is an unpaid, powerless secretary, and its books and records happen to be kept in New York City by outside lawyers and accountants. Does any of this create New York franchise tax nexus for the parent holding company itself?
No nexus. Noga Holding (USA), Inc., a Delaware corporation wholly owned by a non-U.S. parent, owns 100% of two other Delaware corporations that are themselves engaged in business in New York City. Nog…
Must an out-of-state mail-order business with no offices, employees or agents in New York — soliciting only by catalog — register as a vendor and collect New York sales tax?
No — on these 1981 facts, the out-of-state mail-order company had no duty to collect New York tax, but that rule has since changed. Spiegel, Inc., an Illinois mail-order retailer, had no place of busi…
An out-of-state manufacturer has no New York office and owns or rents no New York property. Its only in-state activity is salesmen soliciting orders for valves and truck parts, with all orders sent out of state for approval and, if approved, filled and shipped from outside New York. Is the manufacturer subject to New York's Article 9-A corporate franchise tax?
No -- Petitioner was exempt from the Article 9-A franchise tax under federal Public Law 86-272, as incorporated into 20 NYCRR § 1-3.4(b)(9). Geosource, Inc., a Delaware corporation with no New York of…
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These are official tax letter rulings and advisory opinions issued by New York's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.