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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New York Advisory Opinion TSB-A-20(3)C: Does New York follow the federal IRC section 338(h)(10) treatment of a stock sale and a pre-sale asset distribution when computing Article 9-A entire net income?
Yes. If a stock sale and a pre-sale distribution of assets conform to IRC section 338(h)(10), New York follows the federal tax treatment for Article 9-A entire net income, because entire net income st…
New York Advisory Opinion TSB-A-20(1)C: Does being 'formed for' a telephone business decide Article 9 vs Article 9-A status, and does deriving more than 50% of receipts from non-Article-9 activities make a corporation an Article 9-A filer?
What a corporation was 'formed for' is not dispositive; Article 9 vs Article 9-A status turns on what it is principally engaged in, and a corporation deriving more than 50% of its aggregate gross rece…
New York Advisory Opinion TSB-A-17(2)C: Do an alien life insurer's premiums tied to Insurance Law section 2117(k) broker activities become 'New York premiums' for the Article 33 premiums allocation factor?
No. Premiums tied to a New York broker's Insurance Law section 2117(k) activities for unauthorized alien insurers are not 'New York premiums' because the alien insurers file no annual statement and th…
New York Advisory Opinion TSB-A-16(7)C: Is a foreign bank's New York office a 'branch' under Tax Law section 1454(a)(5)(B) — so its deposits go in the deposits factor — when the office approves loans and disburses funds but does not accept loan repayments?
No. Because the New York office did not accept loan repayments through its own employees on a regular and systematic basis (all repayments went by wire to an unrelated bank), it was not a 'branch' und…
New York Advisory Opinion TSB-A-16(6)C: Is an out-of-state real-estate brokerage with no New York office, whose employee worked 26 days in New York on two 2014 sales, doing business and subject to Article 9-A franchise tax?
Yes. A Washington real-estate brokerage with no New York office, whose Connecticut-based employee spent 26 days in New York visiting properties and meeting sellers on two 2014 sales for which it earne…
New York Advisory Opinion TSB-A-16(5)C: Do unauthorized foreign surplus-lines (non-life) insurers compute their franchise tax under Tax Law section 1502 or section 1502-a, and does the section 1505(a)(1) limitation cap their liability?
They must compute tax under Tax Law section 1502, not section 1502-a, for years beginning on or after January 1, 2003, because section 1502-a applies only to authorized non-life insurers; the section …
New York Advisory Opinion TSB-A-16(4)C: Do unauthorized foreign surplus-lines (non-life) insurers compute their franchise tax under Tax Law section 1502 or section 1502-a, and does the section 1505(a)(1) limitation cap their liability?
They must compute tax under Tax Law section 1502, not section 1502-a, for years beginning on or after January 1, 2003, because section 1502-a applies only to authorized non-life insurers; the section …
New York Advisory Opinion TSB-A-16(3)C: Did a bank's regular employee trips to, and computer equipment housed at, a New Jersey hosting center make it 'doing business' outside New York so it could allocate its income under Article 32?
Yes. A bank whose employees regularly traveled to a New Jersey hosting center, where it kept data-processing equipment under a 10-year license, was doing business outside New York and therefore entitl…
New York Advisory Opinion TSB-A-16(1)C: May a corporate partner aggregate the activities and employees of two majority-owned broker-dealer partnerships to meet the Investment Tax Credit's 'principally used' and employment tests?
Yes. Using the aggregate method, a corporate partner deemed a registered broker-dealer through disregarded SMLLCs may combine the qualifying uses and employees of its two majority-owned partnerships t…
New York Advisory Opinion TSB-A-15(5)C: If an alien (Swiss) holding company's disregarded Delaware LLC opens a New York office but only invests in securities for its own account, is the company subject to New York's Article 9-A franchise tax?
No. An alien corporation whose disregarded LLC merely opens a New York office but limits its activity to investing in securities for its own account within IRC section 864(b)(2) is not doing business …
New York Advisory Opinion TSB-A-15(4)C: Can a qualified New York manufacturer claim the real property tax credit for real property taxes it pays under a lease from a related party?
No. A qualified New York manufacturer cannot claim the real property tax credit for real property taxes it pays under a lease, because the credit covers leased-property taxes only when the property is…
New York Advisory Opinion TSB-A-15(1)C: Is an Internet access provider subject to the Tax Law section 184 additional franchise tax when it sells Internet access alone or bundled with VoIP?
No. The provider is not subject to the Tax Law section 184 additional franchise tax, because Internet access is not a telephone or transmission business under Tax Law section 179, and the provider's l…
New York Advisory Opinion TSB-A-15(2)C: Is a corporation dissolved by proclamation that merely holds title to land as an inactive nominee still subject to Article 9-A franchise tax after dissolution?
The corporation was subject to Article 9-A franchise tax from its incorporation through its dissolution by proclamation, but not after dissolution, because afterward it merely held title to land as an…
After a 2012 policy change, does the section 1505(a)(2) premiums-based limitation still cap the Article 33 tax of an unauthorized life insurance corporation that has no New York premiums?
No longer. This modification of TSB-A-08(3)C applies a 2012 Department change (TSB-M-12(4)C): because an unauthorized life insurance corporation owes no additional premiums tax under section 1510(b)(1…
New York Advisory Opinion TSB-A-14(1)C: Do purchased patents, prototypes and know-how qualify for the QETC facilities, operations and training credit as research and development property or as qualified research expenses?
Purchased patents, trade secrets and know-how are intangible and do not qualify as research and development property for the QETC credit; only tangible prototypes and designs used in research and deve…
New York Advisory Opinion TSB-A-13(11)C: Are a broker-dealer's 'matched principal transactions' principal transactions whose income may be sourced using the production-credit allocation method?
Yes. Through its disregarded registered broker-dealer SMLLCs, the petitioner is a principal, and matched principal transactions in which it bears a risk of loss on the price spread are principal trans…
New York Advisory Opinion TSB-A-13(9)C: May the shareholders of an S corporation claim the investment tax credit for a CNC machine used to cut and shape raw stone slabs into countertops?
Yes. Because the CNC machine is principally used (over 50% of its operating time) to convert raw stone slabs into finished countertops by manufacturing or processing, it is qualified property, so the …
New York Advisory Opinion TSB-A-13(10)C: For the brownfield redevelopment tax credit, can a buyer claim the site-preparation credit after five years, and how is the tangible-property credit allocated for property partly on and off a qualified site?
No site-preparation credit is allowed because more than five years passed since the certificate of completion; the tangible-property credit runs up to ten years after the COC year, and property partly…
New York Advisory Opinion TSB-A-13(8)C: Must a taxpayer forfeit Empire Zone tax credits it already earned and is carrying forward if it enters the Excelsior Jobs Program?
No. The taxpayer may continue to carry forward and claim the Empire Zone tax credits it earned before entering the Excelsior Jobs Program, because the program's disqualification rule only prevents rec…
New York Advisory Opinion TSB-A-13(7)C / (6)I: Do payments by members who fund a QETC's research and development qualify for the qualified emerging technology company capital tax credit?
No. The members who funded the company's research and development cannot claim the QETC capital tax credit, because they were owners of the company from inception, holding more than a 10% interest, an…
New York Advisory Opinion TSB-A-13(6)C: Was an out-of-state remote seller whose employees made limited-purpose trips to New York (inspirational shopping, trade shows, vendor meetings) doing business and subject to Article 9-A franchise tax?
No. On the stated facts, the out-of-state catalog and Internet seller was not doing business in New York, because its employees' limited-purpose trips for 'inspirational shopping,' attending trade sho…
New York Advisory Opinion TSB-A-13(5)C / (4)I: How is a 'qualifying census tract' for the historic rehabilitation credit determined when the 2010 census lacks median-family-income data?
A qualifying census tract for the historic rehabilitation credit is determined using a combination of the 2000 federal census and the most recent American Community Survey, because the 2010 census lac…
New York Advisory Opinion TSB-A-13(4)C: Is an out-of-state company whose New York independent contractors hold consigned inventory and make sales and deliveries subject to franchise tax, or is it protected by the fulfillment-services exclusion or Public Law 86-272?
Yes. The out-of-state company is subject to franchise tax, because consigned inventory it still owns in New York gives it nexus, and neither the fulfillment-services exclusion nor Public Law 86-272 pr…
New York Advisory Opinion TSB-A-13(3)C: Does a U.S. bank holding company stay taxed under Article 9-A (rather than Article 32) after a reorganization and the sale of its banking subsidiary, under the Gramm-Leach-Bliley transition rules?
Yes. Holdco continues to be taxed under Article 9-A. A bank holding company that first registered and elected financial-holding-company status after January 1, 2000 cannot be forced into Article 32 co…
New York Advisory Opinion TSB-A-13(2)C: Does an S corporation keep its Empire Zone certification and tax benefits after transferring non-voting shares to grantor trusts treated as disregarded entities?
Yes. The Empire Zone certification and tax benefits survive the restructuring. Transferring non-voting shares to grantor trusts that are disregarded entities does not by itself break eligibility, prov…
New York Advisory Opinion TSB-A-12(7)C / 12(32)S: Does a parent corporation keep the Empire Zone benefits of a certified subsidiary it absorbs in an IRC section 332 liquidation?
Yes, with a step. When a certified subsidiary is liquidated into its parent under IRC section 332 and the parent keeps running the same facility and employees in the zone, the parent stays eligible fo…
New York Advisory Opinion TSB-A-12(6)C: Does converting a certified corporation into a disregarded single-member LLC keep its Empire Zone certification, and do its EZ ITC and EIC carryover credits flow up to the parent without a carryforward limit?
Yes. Converting a certified corporation into a single-member LLC treated as a disregarded entity (via IRC sections 332, 334(b)(1), 337 and 381) does not end Empire Zone eligibility, and the EZ investm…
New York Advisory Opinion TSB-A-12(5)C: Can a company claim the accessible-vehicle tax credit for the incremental cost it paid to buy a used van that a previous owner had already converted for wheelchair accessibility?
Maybe -- the company can claim the credit for the incremental cost it paid (the excess over a comparable van) on a used vehicle a prior owner converted for wheelchair accessibility, capped at $10,000 …
New York Advisory Opinion TSB-A-12(4)C / 12(7)S: Does a not-for-profit electricity Independent System Operator become subject to corporate franchise tax or lose its sales-tax exempt status by adopting a central counterparty structure under FERC orders?
No. A not-for-profit Independent System Operator that adopts a central counterparty structure -- becoming a party to all transactions in the electricity markets it administers under FERC orders -- doe…
New York Advisory Opinion TSB-A-12(3)C: Will the Department respect an Empire Zone certificate transferred to a corporation after a stock purchase and name change, and when does its sales-tax benefit period end?
Yes. The Department will respect an Empire Zone certificate of eligibility that the Department of Economic Development transfers to the surviving corporation after a stock purchase and name change (th…
New York Advisory Opinion TSB-A-12(2)C: How should an out-of-state company apportion to New York its receipts from educational travel programs, some of which are conducted in New York?
Source them to where the tours happen. A company that runs educational travel programs is selling a service, so its receipts are apportioned to New York based on where the tour is performed: tours con…
New York Advisory Opinion TSB-A-12(1)C / 12(2)S: Is a cash payment-processing service subject to sales tax, and does using it make merchants vendors or give them New York franchise-tax nexus?
No on both. A cash payment-processing service that lets customers pay online purchases or bills with cash at a local store is not an enumerated taxable service, so it is not subject to sales and use t…
New York Advisory Opinion TSB-A-11(10)C: Is an out-of-state seller of tangible gifts protected from corporate franchise tax by Public Law 86-272 when some orders are filled by unaffiliated New York third-party vendors?
No, it is not subject to franchise tax. A North Carolina company that sells only tangible gifts and awards into New York -- some shipped by unaffiliated New York third-party vendors it never takes tit…
New York Advisory Opinion TSB-A-11(9)C: Can the brownfield redevelopment tax credit be claimed for improvements placed in service before the certificate of completion is issued, if the certificate issues in the same taxable year?
Yes. Under the brownfield redevelopment tax credit (Tax Law section 21), the tangible-property credit can be claimed for improvements placed in service before the certificate of completion is issued, …
New York Advisory Opinion TSB-A-11(8)C: How does an internet-based futures and OTC exchange operator source its access, trade-execution, and market-data fees for the Article 9-A receipts factor?
Source them to the customer. The fees an internet-based futures and OTC market operator earns for exchange access, trade execution, and market data are other business receipts, sourced to the location…
New York Advisory Opinion TSB-A-11(7)C: From what date does interest run on a corporate franchise tax and MTA surcharge refund based on amended returns?
Interest runs from the date the amended returns and refund claims were filed. Because the company met the section 211.3 reporting requirement (it filed amended New York returns within 90 days of the a…
New York Advisory Opinion TSB-A-11(6)C: Are receipts from selling a company's entire inventory as part of selling its whole business and ceasing operations included in the Article 9-A receipts factor?
No. Receipts from a one-time sale of the company's entire inventory as part of selling its whole business -- after which it only wound down and distributed to shareholders -- are not business receipts…
New York Advisory Opinion TSB-A-11(4)C: After the Empire Zone program sunset, can a certified business claim EZ credits for operations in a newly acquired building that can no longer be added to its Certificate of Eligibility?
Yes. A business certified before the Empire Zone program sunset stays deemed-certified through its benefit period and may claim EZ credits for qualifying operations in both its existing and a newly ac…
New York Advisory Opinion TSB-A-11(5)C: Could a foreign corporation that is a general partner (with an indirect interest in a New York LLC) make the foreign corporate limited-partner separate-accounting election?
No. The foreign corporation could not make the limited-partner separate-accounting election, because it was not subject to New York tax solely as a result of the limited-partner provision (20 NYCRR 1-…
New York Advisory Opinion TSB-A-11(3)C: Does a parent corporation succeed to a target's investment tax credit carryover when it acquires the target's stock with a joint IRC section 338(h)(10) election?
Yes. A parent may succeed to the target's investment tax credit carryover where it acquires the target's stock with a joint IRC section 338(h)(10) election: the deemed asset sale and deemed IRC sectio…
New York Advisory Opinion TSB-A-11(2)C: Is an electronic OTC commodities and derivatives market operator a banking corporation under Article 32, and does pass-through income from an affiliated partnership make a corporate partner one?
No. An electronic over-the-counter commodities and derivatives market operator is not a banking corporation under Article 32, because its trading, confirmation, and data fees are not a banking busines…
New York Advisory Opinion TSB-A-11(1)C: How does a prepaid debit card processor source its card-sale fulfillment fees and its transaction fees for the Article 9-A receipts factor?
Source by activity. The fulfillment fees a prepaid debit card processor earns from selling cards are other business receipts (the cards are intangible rights to redeem), sourced to where the card is s…
New York Advisory Opinion TSB-A-10(12)C: Are a parent's disregarded subsidiaries treated as one taxpayer for the QEZE real property tax credit, and does the group pass the employment test as a new business?
Treated as one taxpayer. A petitioner and its disregarded subsidiary and NewCo are a single Article 9-A taxpayer for the QEZE real property tax credit, with the certification imputed to the group; the…
New York Advisory Opinion TSB-A-10(11)C / 10(41)S: Are video switching services taxable telecommunication services, can the inputs be bought for resale, and is a rented control panel taxable equipment a broadcaster can buy exempt?
Yes. A video switching service is a telecommunication service subject to State and local sales tax and the section 186-e excise tax; the provider may buy the transmission services and equipment it res…
New York Advisory Opinion TSB-A-10(10)C: Is a provider of one-way and two-way paging services subject to the section 184 franchise tax on local telephone business?
No. A provider of one-way and two-way paging services is not subject to the section 184 franchise tax, because it is not principally engaged in local telephone business: its paging is a telecommunicat…
New York Advisory Opinion TSB-A-10(9)C: How may a taxpayer measure whether a building (including shared conference rooms) is principally used in qualifying activities for the Article 9-A investment tax credit?
By measuring qualifying use of the space. For the investment tax credit, a building is principally used in qualifying activities if more than 50 percent of its usable business space is so used; tracki…
New York Advisory Opinion TSB-A-10(8)C: Does a foreign equipment seller owe Article 9-A tax, and if installation/training push it past PL 86-272, is it taxed only on those receipts?
It depends, and there is no partial exemption. A foreign corporation that only solicits orders for testing equipment (approved and shipped from outside New York) is protected by Public Law 86-272 and …
New York Advisory Opinion TSB-A-10(7)C: Must a New York not-for-profit corporation that has no IRS 501 determination still file and pay Article 9-A franchise tax?
Not necessarily. A New York not-for-profit corporation with no stock or shares, operated on a nonprofit basis with no earnings inuring to members, can qualify for the Article 9-A franchise-tax exempti…
New York Advisory Opinion TSB-A-10(4)C/(23)S: Are charges to use an online virtual-call-center network (and related billing and call-handling services) subject to New York sales tax?
Partly. Charges to access the LiveXchange virtual-call-center network are taxable receipts from the sale of prewritten computer software, sourced to where the users are located. PaySource's billing an…
New York Advisory Opinion TSB-A-10(2)C: Does an out-of-state RV maker (Jayco) owe Article 9-A franchise tax when it only solicits New York sales and uses independent dealers for warranty repairs?
Mostly no, but it depends on the facts. An out-of-state recreational-vehicle manufacturer whose only New York activity is soliciting orders (approved out of state) and whose authorized dealers perform…
New York Advisory Opinion TSB-A-10(1)C: Are distributions from a charitable remainder unitrust to its corporate beneficiary business income or investment income under Article 9-A?
They are business income. A corporation that receives distributions from a charitable remainder unitrust it set up is taxed on those distributions as Article 9-A business income, not investment income…
New York Advisory Opinion TSB-A-09(14)C: How are royalty receipts from licensing intellectual property allocated to New York for the Article 9-A business allocation percentage?
To where the licensee sells the products. Royalty receipts from licensing copyrighted and non-copyrighted intellectual property are allocated to New York based on where the activity that generates the…
New York Advisory Opinion TSB-A-09(8)C: How are a website operator's online advertising fees and medical 'risk participation' fees sourced to New York for the Article 9-A business allocation percentage?
By where the audience is and where the service is performed. A website operator's advertising receipts are sourced to New York based on where the audience views/reads the ads (the same audience-based …
New York Advisory Opinion TSB-A-09(5)C: How are a social network's online advertising receipts (CPC and CPM) allocated to New York for the Article 9-A business allocation percentage?
By where the audience is. A website operator's online advertising receipts are allocated to New York based on the New York audience, not where its servers or staff sit. Cost-per-click (CPC) receipts a…
New York Advisory Opinion TSB-A-09(4)C: Is a corporation dissolved by proclamation that merely holds New York real property as a nominee still subject to Article 9-A franchise tax?
No, not after dissolution. A corporation dissolved by proclamation that merely remains the record title holder of New York real property as a nominee for others, and is otherwise completely inactive, …
New York Advisory Opinion TSB-A-09(3)C: Does a newly formed AMD/Foundry subsidiary qualify as a 'new business' under sections 14(j), 210.12(j), and 210.19(c)?
Yes for two tests, no for the third. The newly formed corporation will qualify as a 'new business' under Tax Law sections 14(j)(1) and 210.12(j) because it is not substantially similar in ownership to…
Is the income a securities market maker earns from its specialist and market-making trading taxed as business capital or as investment capital under New York's corporate franchise tax?
It is business capital. A registered securities dealer that acts as a market maker or specialist holds those securities as dealer property for sale to customers, so the income is business income (appo…
Are a hedge fund general partner's operating and overhead costs - including employee compensation paid for under a partnership agreement - deductions attributable to business capital or investment capital under Article 9-A?
Business capital, to the extent the costs are covered by the management fee. The management fee is business income, and a written-agreement election lets the general partner irrebuttably presume the r…
Is an out-of-state corporation taxable in New York as a general partner of a partnership that leases New York space, and is its gain from selling an FCC broadcast license a business receipt in the allocation factor?
Yes to nexus, no to the receipts factor. As general partner of a partnership that leased space in the Empire State Building, the corporation is subject to Article 9-A tax. The gain on selling its FCC …
Does a newly formed C corporation that bought New York manufacturing assets qualify as a 'new business' under section 210.12(j), making its investment tax credit refundable?
Yes. A new C corporation that bought New York manufacturing assets is a 'new business' eligible to refund its investment tax credit, because it is not over-50% owned by an Article 9-A/32/33 taxpayer (…
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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.