Special rules for determining where the benefit is received

# (a)

In determining where the benefit is received, a corporation must determine first if the type of receipt must be apportioned using the special rules in this section. The specific criteria may be met whether the service or other business activity 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 4-4.5 or 4-4.6 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)

In-Person Services. Services rendered to the body of an individual or in the physical presence of an individual and, based on the nature of the service, requires the physical presence of an individual, are considered in-person services. Receipts from in-person services are apportioned under the rule in this subdivision. In addition, receipts from the facilitation of in-person services are apportioned under the special rule in this subdivision.

# (1)

In-person services include, but are not limited to, medical and dental services, including medical testing and x-rays; childcare; hair cutting and salon services; live entertainment and athletic performances;
modeling; and in-person training or lessons.

# (2)

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, or 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), although significant in person contact may ultimately occur when the service is actually performed.

# (3)

The benefit of in-person services is presumed to be received at the location where the in-person service is performed.

# (c)

Services related to tangible personal property. Receipts from services related to tangible personal property, including the facilitation of services related to tangible personal property, are apportioned under the rule in this subdivision. Receipts from in-person services related to tangible personal property are apportioned under the rule in this subdivision, rather than the special rule for in-person services.

# (1)

Services related to tangible personal property include, but are not limited to, repair services; dry cleaning; preparation and service of food or drink; towing; fulfillment; and equipment upgrades.

# (2)

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.

# (3)

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

# (d)

Services related to real property. Receipts from services related to real property, including the facilitation of such services, are apportioned under the rule in this subdivision. 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 in-person services related to real property are apportioned under the rule in this subdivision, rather than the special rule for in-person services.

# (1)

Services related to real property include, but are not limited to, architectural services, engineering services, landscaping, property maintenance, construction, demolition, security, land surveying, mortgage servicing, and real estate commissions.

# (2)

The benefit of a service related to real property is presumed to be received where the real property is located.

# (e)

Sales of intangible property.

# (1)

With respect to the net gains (not less than zero) from the sale of intangible property not otherwise addressed in subdivisions (1) through (9) of section 210-A, the benefit of such sale is presumed to be received at the location where the value of the intangible was accumulated.

# (2)

Intangible property includes, but is not limited to, goodwill, copyrights, patents, trademarks, trade names, brand names, licenses, and trade secrets.

# (3)

The location where the value of goodwill is accumulated is determined using a three year average of the business apportionment factor (BAF) or other percentage used to apportion or allocate income to New York State of the entity that is sold, unless the facts and circumstances indicate another period of time is a better measure of where the value is accumulated.