Computation of the property factor

# (a)

The percentage of the surcharge taxpayer's real property and tangible personal property, whether owned by or rented to the surcharge taxpayer, that is within the MCTD is determined by dividing the average value of such property within the MCTD (without deduction of any encumbrances) by the average value of all such property within New York State (without deduction of any encumbrances). For purposes of this section, the value of real property owned by the surcharge taxpayer and the value of tangible personal property owned by the surcharge taxpayer means the adjusted basis of such properties for Federal income tax purposes.

# (b)

The term “real property” includes land, buildings, structures, and improvements thereon. In addition, it includes shares in a cooperative housing corporation, as defined in IRC section 216(b), in connection with the grant or transfer of a proprietary leasehold. Such shares in a cooperative housing corporation will be deemed to be owned within New York State if the property owned or leased by such corporation, as described in IRC section 216(b)(1)(B), is located in New York State, and such shares will be deemed to be owned within the MCTD if such property is located within the MCTD.

# (c)

The term “tangible personal property” means corporeal personal property, such as machinery, tools, implements, goods, wares and merchandise. It does not mean money, deposits in banks, shares of stock, bonds, notes, credits or evidences of any interest in property and evidences of debt.

# (d)

# (1)

The average value of real property owned by the surcharge taxpayer and tangible personal property owned by the surcharge taxpayer is determined in accordance with the provisions of section 3-2.4 of this Subchapter applicable to the valuation of assets included in business capital. The same method of valuation must be used consistently with respect to property located within the MCTD and all property located in New York State.

# (2)

For purposes of paragraphs (3) and (4) of subdivision (e) of this section, the average value of tangible personal property owned by the surcharge taxpayer that is in transit and is considered to be within the MCTD will be determined based on the value of such property during the time that it is in transit.

# (e)

For purposes of computation of the property factor, tangible personal property owned by the surcharge taxpayer:

# (1)

is considered to be within the MCTD for as long as it remains physically situated or located within the MCTD, even though it may be stored in a bonded warehouse;

# (2)

is considered to be situated or located within the MCTD if held within the MCTD by an agent or other such person or entity acting on behalf of the surcharge taxpayer, or by a consignee;

# (3)

that is in transit between locations of the surcharge taxpayer, is considered to be within the MCTD if its final destination is within the MCTD;

# (4)

that is in transit between a buyer and a seller, is considered to be within the MCTD if its final destination is within the MCTD and the property is included by the surcharge taxpayer in the denominator of its property factor in accordance with its regular accounting practices.

# (f)

For purposes of computation of the property factor, omnibuses and other rolling equipment, such as construction equipment or trucks, located within the MCTD and all such rolling equipment located in New York State must be apportioned to the MCTD by a fraction. Such fraction may be based on any of the following measures: miles operated within the MCTD compared to total miles operated in New York State; time operated within the MCTD compared to total time operated in New York State; the number of pickup and delivery locations within the MCTD compared to the total of such locations in New York State; or any other measure that fairly apportions such operations to the MCTD. Operations within the MCTD are included in the numerator of the fraction, and 100% of operations in New York State are included in the denominator. Omnibus operations while engaged in school bus operations must be disregarded in determining the fraction.

# (g)

For purposes of the property factor, the underlying asset of a capital lease between the surcharge taxpayer and another party (the lessor) is considered owned by the surcharge taxpayer.