Definitions

# (a)

“Billing address” means the location indicated in the books and records of the corporation as the primary address with respect to a customer’s account.

# (b)

# (1)

“Commercial domicile” is determined by the use of a hierarchy of methods for business entities referenced in subparagraphs (i) and (ii) of this paragraph. The methods must be applied sequentially and be based on the information known to the corporation or publicly or readily available information. Corporations must exercise due diligence before abandoning the first method in this hierarchy and proceeding to the second method. The hierarchy is:
(i) the seat of management and control of the business entity; and
(ii) the billing address of the business entity in the corporation’s records.

# (2)

Unless the corporation demonstrates the contrary, the seat of management and control is presumed to be in the United States. In the case of a business entity that is a sole proprietor, the seat of management and control is the principal place of business of the sole proprietor.

# (c)

# (1)

“Marked to market” means that a financial instrument is, under IRC section 475 or 1256, treated by the corporation as sold for its fair market value (FMV) on the last business day of the corporation’s taxable year.

# (2)

In the case of a corporation that is a dealer in securities, as defined in IRC section 475(c)(1), a financial instrument will not be considered to be marked to market if it:

(i) is a security, as defined in IRC section 475(c)(2); and
(ii) comes within one of the exceptions described in IRC section 475(b)(1), whether or not the corporation identifies the security under IRC section 475(b)(2).

# (d)

“Marked to market gain or loss” means the gain or loss recognized by the corporation under IRC section 475 or 1256 because the financial instrument is treated as sold for its FMV on the last business day of the corporation’s taxable year.

# (e)

# (1)

“Registered broker or dealer” means a broker or dealer registered as such by the Securities and
Exchange Commission or a broker or dealer registered as such by the Commodities Futures Trading
Commission, and shall include an OTC derivatives dealer as defined under regulations of the Securities and Exchange Commission at Title 17, part 240, section 3b-12 of the Code of Federal Regulations (17 CFR 240.3b-12).

# (2)

In the case of a combined report, whether an entity is a registered broker or dealer is determined on a corporation-by-corporation basis.

# (3)

A corporation that itself is not a registered broker or dealer will not be deemed to be a registered broker or dealer because it is a partner in a partnership that is a registered broker or dealer or a member of a limited liability company that is a registered broker or dealer. Business receipts from such registered broker or dealer that are described in section 210-A(5)(b) and are passed through to the corporation because it is a partner in or member of a registered broker or dealer are apportioned using the rules in such section.