N.Y. Tax Law § 209 — Imposition of tax; exemptions

§ 209. Imposition of tax; exemptions. 1. (a) For the privilege of\nexercising its corporate franchise, or of doing business, or of\nemploying capital, or of owning or leasing property in this state in a\ncorporate or organized capacity, or of maintaining an office in this\nstate, or of deriving receipts from activity in this state, for all or\nany part of each of its fiscal or calendar years, every domestic or\nforeign corporation, except corporations specified in subdivision four\nof this section, shall annually pay a franchise tax, upon the basis of\nits business income base, or upon such other basis as may be applicable\nas hereinafter provided, for such fiscal or calendar year or part\nthereof, on a report which shall be filed, except as hereinafter\nprovided, on or before the fifteenth day of March next succeeding the\nclose of each such year, for taxable years beginning before January\nfirst, two thousand sixteen, and on or before the fifteenth day of April\nnext succeeding the close of each such year, for taxable years beginning\non or after January first, two thousand sixteen, or, in the case of a\ncorporation which reports on the basis of a fiscal year, within two and\none-half months after the close of such fiscal year, for taxable years\nbeginning before January first, two thousand sixteen, and on or before\nthe fifteenth day of the fourth month after the close of such fiscal\nyear, for taxable years beginning on or after January first, two\nthousand sixteen, and shall be paid as hereinafter provided.\n (b) A corporation is deriving receipts from activity in this state if\nit has receipts within this state of one million dollars or more in the\ntaxable year. For purposes of this section, the term "receipts" means\nthe receipts that are subject to the apportionment rules set forth in\nsection two hundred ten-A of this article, and the term "receipts within\nthis state" means the receipts included in the numerator of the\napportionment factor determined under section two hundred ten-A of this\narticle. For purposes of this paragraph, receipts from processing credit\ncard transactions for merchants include merchant discount fees received\nby the corporation.\n (c) A corporation is doing business in this state if (i) it has issued\ncredit cards to one thousand or more customers who have a mailing\naddress within this state as of the last day of its taxable year, (ii)\nit has merchant customer contracts with merchants and the total number\nof locations covered by those contracts equals one thousand or more\nlocations in this state to whom the corporation remitted payments for\ncredit card transactions during the taxable year, or (iii) the sum of\nthe number of customers described in subparagraph (i) of this paragraph\nplus the number of locations covered by its contracts described in\nsubparagraph (ii) of this paragraph equals one thousand or more. As used\nin this subdivision, the term "credit card" includes bank, credit,\ntravel and entertainment cards.\n (d)(i) A corporation with less than one million dollars but at least\nten thousand dollars of receipts within this state in a taxable year\nthat is part of a unitary group that meets the ownership test under\nsection two hundred ten-C of this article is deriving receipts from\nactivity in this state if the receipts within this state of the members\nof the unitary group that have at least ten thousand dollars of receipts\nwithin this state in the aggregate meet the threshold set forth in\nparagraph (b) of this subdivision.\n (ii) A corporation that does not meet any of the thresholds set forth\nin paragraph (c) of this subdivision but has at least ten customers, or\nlocations, or customers and locations, as described in paragraph (c) of\nthis subdivision, and is part of a unitary group that meets the\nownership test under section two hundred ten-C of this article is doing\nbusiness in this state if the number of customers, locations, or\ncustomers and locations, within this state of the members of the unitary\ngroup that have at least ten customers, locations, or customers and\nlocations, within this state in the aggregate meets any of the\nthresholds set forth in paragraph (c) of this subdivision.\n (iii) For purposes of this paragraph, any corporation described in\nparagraph (c) of subdivision two of section two hundred ten-C of this\narticle shall not be considered.\n (e) At the end of each year, the commissioner shall review the\ncumulative percentage change in the consumer price index. The\ncommissioner shall adjust the receipt thresholds set forth in this\nsubdivision if the consumer price index has changed by ten percent or\nmore since January first, two thousand fifteen, or since the date that\nthe thresholds were last adjusted under this subdivision. The thresholds\nshall be adjusted to reflect that cumulative percentage change in the\nconsumer price index. The adjusted thresholds shall be rounded to the\nnearest one thousand dollars. As used in this paragraph, "consumer price\nindex" means the consumer price index for all urban consumers (CPI-U)\navailable from the bureau of labor statistics of the United States\ndepartment of labor. Any adjustment shall apply to tax periods that\nbegin after the adjustment is made.\n (f) If a partnership is doing business, employing capital, owning or\nleasing property in this state, maintaining an office in the state, or\nderiving receipts from activity in this state, any corporation that is a\npartner in such partnership shall be subject to tax under this article\nas described in the regulations of the commissioner.\n 2. A foreign corporation shall not be deemed to be doing business,\nemploying capital, owning or leasing property, or maintaining an office\nin this state, or deriving receipts from activity in this state, for the\npurposes of this article, by reason of (a) the maintenance of cash\nbalances with banks or trust companies in this state, or (b) the\nownership of shares of stock or securities kept in this state, if kept\nin a safe deposit box, safe, vault or other receptacle rented for the\npurpose, or if pledged as collateral security, or if deposited with one\nor more banks or trust companies, or brokers who are members of a\nrecognized security exchange, in safekeeping or custody accounts, or (c)\nthe taking of any action by any such bank or trust company or broker,\nwhich is incidental to the rendering of safekeeping or custodian service\nto such corporation, or (d) the maintenance of an office in this state\nby one or more officers or directors of the corporation who are not\nemployees of the corporation if the corporation otherwise is not doing\nbusiness in this state, and does not employ capital or own or lease\nproperty in this state, or (e) the keeping of books or records of a\ncorporation in this state if such books or records are not kept by\nemployees of such corporation and such corporation does not otherwise do\nbusiness, employ capital, own or lease property or maintain an office in\nthis state, or (f) any combination of the foregoing activities.\n 2-a. An alien corporation shall not be deemed to be doing business,\nemploying capital, owning or leasing property, maintaining an office in\nthis state, or deriving receipts from activity in this state, for the\npurposes of this article, if its activities in this state are limited\nsolely to (a) investing or trading in stocks and securities for its own\naccount within the meaning of clause (ii) of subparagraph (A) of\nparagraph (2) of subsection (b) of section eight hundred sixty-four of\nthe internal revenue code or (b) investing or trading in commodities for\nits own account within the meaning of clause (ii) of subparagraph (B) of\nparagraph (2) of subsection (b) of section eight hundred sixty-four of\nthe internal revenue code or (c) any combination of activities described\nin paragraphs (a) and (b) of this subdivision. An alien corporation that\nunder any provision of the internal revenue code is not treated as a\n"domestic corporation" as defined in section seven thousand seven\nhundred one of such code and has no effectively connected income for the\ntaxable year pursuant to clause (iv) of the opening paragraph of\nsubdivision nine of section two hundred eight of this article shall not\nbe subject to tax under this article for that taxable year. For purposes\nof this article, an alien corporation is a corporation organized under\nthe laws of a country, or any political subdivision thereof, other than\nthe United States, or organized under the laws of a possession,\nterritory or commonwealth of the United States.\n 3. Any receiver, referee, trustee, assignee or other fiduciary, or any\nofficer or agent appointed by any court, who conducts the business of\nany corporation, shall be subject to the tax imposed by this article in\nthe same manner and to the same extent as if the business were conducted\nby the agents or officers of such corporation. A dissolved corporation\nwhich continues to conduct business shall also be subject to the tax\nimposed by this article.\n 4. Corporations liable to tax under sections one hundred eighty-three\nto one hundred eighty-four-a, inclusive, corporations taxable under\narticle thirty-three of this chapter, any trust company organized under\na law of this state all of the stock of which is owned by not less than\ntwenty savings banks organized under a law of this state, a captive REIT\nor a captive RIC filing a combined return under subdivision (f) of\nsection fifteen hundred fifteen of this chapter, and housing companies\norganized and operating pursuant to the provisions of article two or\narticle five of the private housing finance law and housing development\nfund companies organized pursuant to the provisions of article eleven of\nthe private housing finance law shall not be subject to tax under this\narticle.\n 5. For any taxable year of a real estate investment trust as defined\nin section eight hundred fifty-six of the internal revenue code in which\nsuch trust is subject to federal income taxation under section eight\nhundred fifty-seven of such code, such trust shall be subject to a tax\ncomputed under either paragraph (a) or (d) of subdivision one of section\ntwo hundred ten of this chapter, whichever is greater, and shall not be\nsubject to any tax under article thirty-three of this chapter except for\na captive REIT required to file a combined return under subdivision (f)\nof section fifteen hundred fifteen of this chapter. In the case of such\na real estate investment trust, including a captive REIT as defined in\nsection two of this chapter, the term "entire net income" means "real\nestate investment trust taxable income" as defined in paragraph two of\nsubdivision (b) of section eight hundred fifty-seven (as modified by\nsection eight hundred fifty-eight) of the internal revenue code, subject\nto the modifications required by subdivision nine of section two hundred\neight of this article.\n 6. For any taxable year of a DISC, not exempt from tax under paragraph\n(i) of subdivision nine of section two hundred eight of this article,\nthe taxes imposed by subdivision one of this section shall be computed\nonly under either paragraph (b) or (d) of subdivision one of section two\nhundred ten of this chapter, whichever is greater.\n 7. For any taxable year, beginning on or after January first, nineteen\nhundred eighty of a regulated investment company, as defined in section\neight hundred fifty-one of the internal revenue code, in which such\ncompany is subject to federal income taxation under section eight\nhundred fifty-two of such code, such company shall be subject to a tax\ncomputed under either paragraph (a) or (d) of subdivision one of section\ntwo hundred ten of this chapter, whichever is greater, and shall not be\nsubject to any tax under article thirty-three of this chapter except for\na captive RIC required to file a combined return under subdivision (f)\nof section fifteen hundred fifteen of this chapter. In the case of such\na regulated investment company, including a captive RIC as defined in\nsection two of this chapter, the term "entire net income" means\n"investment company taxable income" as defined in paragraph two of\nsubdivision (b) of section eight hundred fifty-two, as modified by\nsection eight hundred fifty-five, of the internal revenue code plus the\namount taxable under paragraph three of subdivision (b) of section eight\nhundred fifty-two of such code subject to the modifications required by\nsubdivision nine of section two hundred eight of this chapter.\n 8. For any taxable year beginning on or after January first, two\nthousand six, a corporation that is no longer doing business, employing\ncapital, or owning or leasing property, or deriving receipts from\nactivity in this state in a corporate or organized capacity that has\nfiled a final tax return with the department for the last tax year it\nwas doing business and has no outstanding tax liability for such final\ntax return or any tax return for prior tax years shall be exempt from\nall taxes imposed by paragraph (d) of subdivision one of section two\nhundred ten of this article for tax years following the last year such\ncorporation was doing business.\n 9. For any taxable year beginning on or after January first, nineteen\nhundred eighty-seven, an organization described in paragraph two or\ntwenty-five of subdivision (c) of section five hundred one of the\ninternal revenue code of nineteen hundred eighty-six shall be exempt\nfrom all taxes imposed by this article.\n 10. QSSS. For exemption from tax of a qualified subchapter S\nsubsidiary, see paragraph (k) of subdivision nine of section two hundred\neight of this article.\n 11. Except as provided in subparagraph eighteen of paragraph (a) of\nsubdivision nine of section two hundred eight of this article, a\ncorporation that is a qualified entity of a New York state innovation\nhot spot shall be subject only to the fixed dollar minimum tax under\nparagraph (d) of subdivision one of section two hundred ten of this\narticle, as provided in section thirty-eight of this chapter.\n 12. All farmers', fruit growers' and other like agricultural\ncorporations organized and operated on a co-operative basis for the\npurposes expressed in and as provided under the co-operative\ncorporations law of the state of New York, whether or not such\ncorporations have capital stock, shall be exempt from taxation under the\nprovisions of this article.\n