20 NYCRR § 4-3.3

Special rules for determining primary use location

Official textus-ny/regstax.ny.gov15 subsections

# (a)

In applying the primary use location method of the hierarchy, a corporation must determine first if the type of receipt must be sourced using the special rules in this section. The specific criteria to apply the special rules may be met whether the digital product or digital service is provided directly by the corporation or on behalf of the corporation. The special rules apply to the receipts described in subdivisions (b) through (e) of this section. If a corporation meets the specific criteria to apply a special rule, but does not have sufficient information to apply the rule, the corporation should use the rules for reasonable approximation in section 4-3.5 or 4-3.6 of this Subpart to apply the special rule. However, if the corporation does not have sufficient information to apply the rules for reasonable approximation to the special rule, then the special rule no longer applies.

# (b)

Facilitation of in-person services. Services that are rendered to the body of an individual or in the physical presence of an individual and, based on the nature of the services, require the physical presence of an individual, are considered in-person services. Receipts from digital facilitation of the provision of in-person services are apportioned under the special rule in this subdivision.

# (1)

Digital facilitation of the provision of in-person services includes, but is not limited to, ride-sharing;
facilitating ticket sales for live entertainment and athletic performances; and scheduling of in-person training or lessons.

# (2)

The primary use location of the facilitation of in-person services is presumed to be the location where the in-person service is performed.

# (3)

In-person services do not include:
(i) services that do not require significant in-person contact in order to perform, but nevertheless may include in-person contact, including, but not limited to, legal, accounting, financial and consulting services; and
(ii) the obligation to perform services or fund the performance of services that may or may not actually occur at an undetermined future date (e.g., facilitation of the purchase of insurance) is not an in-person service, although significant in-person contact may ultimately occur when the service is actually performed.

# (c)

Services related to tangible personal property. Receipts from digital services that include services related to tangible personal property are sourced under the special rule in this subdivision. This includes commissions and other receipts related to the facilitation of services related to tangible personal property.
Receipts from the facilitation of in-person services related to tangible personal property are apportioned under the special rule in this subdivision, rather than the special rule in subdivision (b) of this section for the facilitation of in-person services.

# (1)

Digital services related to tangible personal property include, but are not limited to: computer troubleshooting, software installation, and facilitation of the sale of tangible personal property.

# (2)

The primary use location of services related to tangible personal property is presumed to be at the location where the property is received after the service is performed.

# (3)

The obligation to perform services or fund the performance of services that may or may not actually occur at an undetermined future date (e.g., warranty services, facilitation of the purchase of insurance) is not a service related to tangible personal property, although a service may ultimately be performed on tangible personal property.

# (d)

Services related to real property. Receipts from digital services related to real property, including commissions and other receipts related to the facilitation of such services, are apportioned under the special rule in this subdivision. Digital services related to real property include services that relate to the improvement or maintenance of the property and services that relate to the title, purchase, sale, rental, appraisal, assessment or basis in the property. Receipts from the facilitation of in-person services related to real property are apportioned under the special rule in this subdivision, rather than the special rule in subdivision (b) of this section for facilitation of in-person services.

# (1)

Digital services related to real property include, but are not limited to: security services, mortgage servicing, title searches and facilitating property or room rentals.

# (2)

The primary use location of the digital service related to real property is presumed to be where the real property is located.

# (e)

Sales of computer software at retail locations.

# (1)

Receipts from the sale of prewritten, non-customized computer software sold at a physical retail location that sells more than one type of digital product and/or a combination of digital products and other products, where the customer is physically present at the physical retail location at the time they take possession of the software or right to download such software, are apportioned under the special rule in this subdivision.

# (2)

With respect to receipts from software sold under the conditions of this special rule, the receipt is apportioned to the physical retail location where the software is sold.

Source: official source document (DTF adopted rule text, December 2023 corporate reform)

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