Election by certain foreign limited partners

# (a)

# (1)

A foreign corporation that is a limited partner in one or more limited partnerships, that is subject to tax under article 9-A solely as a result of the application of section 1-2.3(b) of this Subchapter and that does not file on a combined basis for article 9-A purposes, may elect to compute its tax bases by taking into account only its distributive share of each partnership item of receipts, income, gain, loss and deduction (including any modifications relating thereto) and its proportionate part of each partnership asset and liability, and each partnership activity, of all such limited partnerships that are doing business, employing capital, owning or leasing property, maintaining an office, or deriving receipts in New York State, whether or not such share is actually distributed. However, such election may not be made with respect to a partnership if the limited partnership and corporate group are engaged in a unitary business wherever conducted. The election shall be applicable to all of those limited partnership interests that are not engaged in a unitary business with the corporate group (“election partnerships”). The term corporate group means the corporate limited partner itself or, if it is a member of an affiliated group, the corporate limited partner and all other members of such affiliated group. The term affiliated group shall have the same meaning as provided in section 9-2.2(d)(1) of this Subpart.

# (2)

If the foreign corporation makes the election allowed under this section, the foreign corporation’s distributive share of such partnership's items of income, gain, loss and deduction shall be presumed to be business income and its proportionate part of such partnership’s assets and liabilities shall be deemed to be business capital and be apportioned entirely to New York, unless the foreign corporation proves otherwise.

# (3)

If the separate accounting election has been made and the foreign corporation has an interest in more than one election partnership, a separate business income base, capital base, and New York receipts amount (used for purposes of computing the tax measured by the fixed dollar minimum) must be computed for each limited partnership interest. Each amount is then aggregated, with negative amounts limited to zero, to determine the foreign corporation’s business income base tax, capital base tax, and fixed dollar minimum tax.
Where such negative amounts are limited to zero in determining the business income base tax of the foreign corporation, the corporation may generate an NOL for the taxable year equal to the negative business income base computed for such partnership interest. Such NOL may only be applied against the apportioned business income of the partnership generating such loss in accordance with Subpart 3-9.

# (b)

The election is made at the time of filing the original, timely filed return, determined with regard to valid extensions. Once an election is made, it may not be revoked by filing an amended report and is binding with respect to all election partnerships for all future taxable years as long as the criteria in subdivision (a)(1) still applies.

# (c)

Where a corporation makes such an election, but is not allowed to make such an election with respect to one or more other such partnerships as those partnerships and the corporate group are engaged in a unitary business wherever conducted (“nonelection partnerships”), then, subdivision (a) of this section to the contrary notwithstanding, the taxpayer shall compute its tax bases with respect to nonelection partnerships by reducing its receipts, income, gain, loss and deductions by the amounts that are directly and indirectly attributable to such election partnerships.