Examples

Example 1:
2014 Calendar Year (Base Year)
Corporations L, M, N and O are properly included in a combined report. The combined group's base year BAP is 12.50% and the group’s base year tax rate is 7.1%.
2015 Calendar Year (First 2015 Taxable Year)
Corporation O files on a separate basis. It is not a small business taxpayer. To compute its PNOLC subtraction pool, Corporation O first multiplies its UNOL by its base year combined group’s base year BAP and base year tax rate ($7,325 x 12.50% x 7.1%). The result of $65 is divided by the 6.5% conversion percentage to arrive at a PNOLC subtraction pool of $1,000. Since Corporation O properly elected to use the 50% allotment method, its PNOLC subtraction pool is multiplied by 50% to determine its tax period PNOLC subtraction allotment of $500 for the first 2015 taxable year. In the first 2015 taxable year, the PNOLC subtraction available for use is $500, which is equal to its tax period PNOLC subtraction allotment for that year.
Base
Base Year
PNOLC Tax Period
PNOLC Subtraction PNOLC 2015 Calendar Year
Conversion
Year Tax Subtraction Allotment Subtraction PNOLC Subtraction
Percentage
Corporation UNOL BAP Rate Pool Method Allotment Available for Use
$500
6.50%
O $7,325 12.50% 7.10% $1,000 50% $500
Corporations L, M, and N are properly included in a combined report. The combined group is not a small business taxpayer and it does not elect to use the 50% allotment method. Each member of the combined group computes its own PNOLC subtraction pool by multiplying its own UNOL by the base year combined group’s base year BAP and base year tax rate.
The result is then divided by the 6.5% conversion percentage to compute the member’s PNOLC subtraction pool. Since the combined group is utilizing the 10% allotment method, each member’s PNOLC subtraction pool is multiplied by 10% to arrive at the member’s PNOLC subtraction allotment for the first 2015 taxable year. The combined group’s tax period PNOLC subtraction allotment for the first 2015 taxable year of $3,505 is the sum of L, M, and N’s tax period PNOLC subtraction allotments for that year. The combined group’s PNOLC subtraction available for use in the first 2015 taxable year is $3,505, which is equal to the combined group’s tax period PNOLC subtraction allotment for that year.
Base
Base Year
Member's PNOLC Tax Period
PNOLC Subtraction PNOLC 2015 Calendar Year
Conversion
2015 Group Member's Year Tax Subtraction Allotment Subtraction PNOLC Subtraction
Percentage
Member UNOL BAP Rate Pool Method Allotment Available for Use
6.50%
L $70,000 12.50% 7.10% $9,558 10% $956 $956
6.50%
M $186,700 12.50% 7.10% $25,492 10% $2,549 $2,549
6.50%
N $0 12.50% 7.10%
Totals $256,700
$0 $0 $0
$35,050 $3,505 $3,505
Example 2:
2014 Calendar Year (Base Year)
Corporations E, F, and G are properly included in a combined report. The combined group’s base year BAP is 9.5% and the group’s base year tax rate is 7.1%. Corporation H is a small business taxpayer and files on a separate basis, with a base year BAP of 4.8250% and a base year tax rate of 6.5%. Corporation I was not subject to tax in New York State in the base year.
Corporation J files on a separate basis, with a base year BAP of 9.75% and a base year tax rate of 7.1%.
2015 Calendar Year (First 2015 Taxable Year)
Corporations E, F, G, H, and I are properly included in a combined report. Even though Corporation H qualified as a small business taxpayer in 2014, the combined group does not qualify as one in 2015. The designated agent of the combined group does not elect to use the 50% allotment method. Each member computes its own PNOLC subtraction pool by multiplying its own UNOL by the base year BAP and base year tax rate. Corporations E, F, and G have the same base year BAP and base year tax rate as they were included in the same base year combined group. Corporation H must use its separately filed base year BAP and base year tax rate. As Corporation I was not subject to tax in the base year, it has a 0% base year BAP and 0% base year tax rate. The result is then divided by the 6.5% conversion percentage to compute the member’s PNOLC subtraction pool. Since the combined group is utilizing the 10% allotment method, each member’s PNOLC subtraction pool is multiplied by 10% to arrive at the member’s PNOLC subtraction allotment for the first 2015 taxable year. The combined group’s PNOLC subtraction allotment for the first 2015 taxable year is $2,900, which is the sum of E, F, G, H, and I’s tax period PNOLC subtraction allotments for that year. The combined group’s PNOLC subtraction available for use in the first 2015 taxable year is $2,900, which is equal to the tax period PNOLC subtraction allotment for that year. The combined group is able to utilize the entire PNOLC subtraction available for use so there is no carryforward of PNOLC subtraction from the first 2015 taxable year.
2015 Group Member's Base Year Base Year
Member UNOL BAP Tax Rate
E $115,600 9.50% 7.10%
F $28,900 9.50% 7.10%
G $57,800 9.50% 7.10%
H $165,800 4.83% 6.50%
I $0 $0 $0
Total $368,100
2015
Calendar
Year
PNOLC
Member's PNOLC
Subtraction
PNOLC Subtraction PNOLC
Available for
Conversion Subtraction Allotment Subtraction
Use
Percentage Pool Method Allotment
6.50% $11,996 10% $1,200 $1,200
6.50% $2,999 10% $300 $300
6.50% $5,998 10% $600 $600
6.50% $8,000 10% $800 $800
$0 $0 $0 $0 $0
$28,993 $2,900 $2,900
Example 2 (continued):
Corporation J files on a separate basis and properly elects to use the 50% allotment method. To compute its PNOLC subtraction pool, Corporation J first multiplies its UNOL by its base year BAP and base year tax rate ($16,000 x 9.750% x 7.1%). The result of $111 is divided by the 6.5% conversion percentage to arrive at a PNOLC subtraction pool of $1,704.
Since Corporation J properly elected to use the 50% allotment method, its PNOLC subtraction pool is multiplied by 50% to determine its tax period PNOLC subtraction allotment of $852 for the first 2015 taxable year. In the first 2015 taxable year, the PNOLC subtraction available for use is $852, which is equal to its tax period PNOLC subtraction allotment for that year.
Corporation J is able to use the entire PNOLC subtraction available for use so there is no carryforward of PNOLC subtraction from the first 2015 taxable year.
Base Year
Corporation UNOL BAP
J $16,000 9.75%
2015
PNOLC Tax Period Calendar
PNOLC Subtraction PNOLC Year
Base Year Conversion Subtraction Allotment Subtraction PNOLC
Tax Rate Percentage Pool Method Allotment Subtraction
7.10% 6.50% $1,704 50% $852 $852
2016 Calendar Year (Second Year Following the Base Year)
Corporations E, F, G, H, I, and J are properly included in a combined report. The group has $3,752 of PNOLC subtraction available for use, which is the sum of each member’s PNOLC subtraction available for use for the tax period.
Member's PNOLC
PNOLC Subtraction
2016 Group Subtraction Allotment
Member Pool Method
E $11,996 10%
F $2,999 10%
G $5,998 10%
H $8,000 10%
I $0 $0
J $1,704 50%
Total $30,697
2016
Calendar
Unused
Year
PNOLC
PNOLC
Subtraction
Tax Period
Subtraction
Carryforward
PNOLC
Available for from 2015
Subtraction
Use
Calendar Year
Allotment
$1,200 $0 $1,200
$300 $0 $300
$600 $0 $600
$800 $0 $800
$0 $0 $0
$852 $0 $852
$3,752 $0 $3,752
Even though combined group E, F, G, H, I elected in 2015 to use the 10% allotment method, Corporation J is required to continue to use the 50% allotment method elected on its original, timely filed return for the first 2015 taxable year when it joined the combined group in 2016. However, if Corporation J properly revokes such election in accordance with the rules in this Subpart, it would then use the 10% allotment method in the 2016 taxable year.