N.Y. Tax Law § 210-A — Apportionment

§ 210-A. Apportionment. 1. General. Business income and capital shall\nbe apportioned to the state by the apportionment factor determined\npursuant to this section. The apportionment factor is a fraction,\ndetermined by including only those receipts, net income, net gains, and\nother items described in this section that are included in the\ncomputation of the taxpayer's business income (determined without regard\nto the modification provided in subparagraph nineteen of paragraph (a)\nof subdivision nine of section two hundred eight of this article) for\nthe taxable year. The numerator of the apportionment fraction shall be\nequal to the sum of all the amounts required to be included in the\nnumerator pursuant to the provisions of this section and the denominator\nof the apportionment fraction shall be equal to the sum of all the\namounts required to be included in the denominator pursuant to the\nprovisions of this section.\n 2. Sales of tangible personal property, electricity, and real\nproperty. (a) Receipts from sales of tangible personal property where\nshipments are made to points within the state or the destination of the\nproperty is a point in the state shall be included in the numerator of\nthe apportionment fraction. Receipts from sales of tangible personal\nproperty where shipments are made to points within and without the state\nor the destination is within and without the state shall be included in\nthe denominator of the apportionment fraction.\n (b) Receipts from sales of electricity delivered to points within the\nstate shall be included in the numerator of the apportionment fraction.\nReceipts from sales of electricity delivered to points within and\nwithout the state shall be included in the denominator of the\napportionment fraction.\n (c) Receipts from sales of tangible personal property and electricity\nthat are traded as commodities, as the term "commodity" is defined in\nsection 475 of the internal revenue code, are included in the\napportionment fraction in accordance with clause (I) of subparagraph two\nof paragraph (a) of subdivision five of this section.\n (d) Net gains (not less than zero) from the sales of real property\nlocated within the state shall be included in the numerator of the\napportionment fraction. Net gains (not less than zero) from the sales of\nreal property located within and without the state shall be included in\nthe denominator of the apportionment fraction.\n 3. Rentals and royalties. (a) Receipts from rentals of real and\ntangible personal property located within the state are included in the\nnumerator of the apportionment fraction. Receipts from rentals of real\nand tangible personal property located within and without the state\nshall be included in the denominator of the apportionment fraction.\n (b) Receipts of royalties from the use of patents, copyrights,\ntrademarks, and similar intangible personal property within the state\nare included in the numerator of the apportionment fraction. Receipts of\nroyalties from the use of patents, copyrights, trademarks and similar\nintangibles within and without the state are included in the denominator\nof the apportionment fraction. A patent, copyright, trademark or similar\nintangible property is used in the state to the extent that the\nactivities thereunder are carried on in the state.\n (c) Receipts from the sales of rights for closed-circuit and cable\ntelevision transmissions of an event (other than events occurring on a\nregularly scheduled basis) taking place within the state as a result of\nthe rendition of services by employees of the corporation, as athletes,\nentertainers or performing artists are included in the numerator of the\napportionment fraction to the extent that such receipts are attributable\nto such transmissions received or exhibited within the state. Receipts\nfrom all sales of rights for closed-circuit and cable television\ntransmissions of an event are included in the denominator of the\napportionment fraction.\n 4. Digital products. (a) For purposes of determining the apportionment\nfraction under this section, the term "digital product" means any\nproperty or service, or combination thereof, of whatever nature\ndelivered to the purchaser through the use of wire, cable, fiber-optic,\nlaser, microwave, radio wave, satellite or similar successor media, or\nany combination thereof. Digital product includes, but is not limited\nto, an audio work, audiovisual work, visual work, book or literary work,\ngraphic work, game, information or entertainment service, storage of\ndigital products and computer software by whatever means delivered. The\nterm "delivered to" includes furnished or provided to or accessed by. A\ndigital product does not include legal, medical, accounting,\narchitectural, research, analytical, engineering or consulting services\nprovided by the taxpayer.\n (b) Receipts from the sale of, licence to use, or granting of remote\naccess to digital products within the state, determined according to the\nhierarchy of methods set forth in subparagraphs one through four of\nparagraph (c) of this subdivision, shall be included in the numerator of\nthe apportionment fraction. Receipts from the sale of, license to use,\nor granting of remote access to digital products within and without the\nstate shall be included in the denominator of the apportionment\nfraction. The taxpayer must exercise due diligence under each method\ndescribed in paragraph (c) of this subdivision before rejecting it and\nproceeding to the next method in the hierarchy, and must base its\ndetermination on information known to the taxpayer or information that\nwould be known to the taxpayer upon reasonable inquiry. If the receipt\nfor a digital product is comprised of a combination of property and\nservices, it cannot be divided into separate components and is\nconsidered to be one receipt regardless of whether it is separately\nstated for billing purposes. The entire receipt must be allocated by\nthis hierarchy.\n (c) Hierarchy of sourcing methods. (1) The customer's primary use\nlocation of the digital product;\n (2) The location where the digital product is received by the\ncustomer, or is received by a person designated for receipt by the\ncustomer;\n (3) The apportionment fraction determined pursuant to this subdivision\nfor the preceding taxable year for such digital product; or\n (4) The apportionment fraction in the current taxable year for those\ndigital products that can be sourced using the hierarchy of sourcing\nmethods in subparagraphs one and two of this paragraph.\n 5. Financial transactions. (a) Financial instruments. A financial\ninstrument is a "nonqualified financial instrument" if it is not a\nqualified financial instrument. A qualified financial instrument means a\nfinancial instrument that is of a type described in any of clauses (A),\n(B), (C), (D), (G), (H) or (I) of subparagraph two of this paragraph and\nthat has been marked to market in the taxable year by the taxpayer under\nsection 475 or section 1256 of the internal revenue code. Further, if\nthe taxpayer has in the taxable year marked to market a financial\ninstrument of the type described in any of the clauses (A), (B), (C),\n(D), (G), (H) or (I) of subparagraph two of this paragraph, then any\nfinancial instrument within that type described in the above specified\nclause or clauses that has not been marked to market by the taxpayer\nunder section 475 or section 1256 of the internal revenue code is a\nqualified financial instrument in the taxable year. Notwithstanding the\ntwo preceding sentences, (i) a loan secured by real property shall not\nbe a qualified financial instrument, (ii) if the only loans that are\nmarked to market by the taxpayer under section 475 or section 1256 of\nthe internal revenue code are loans secured by real property, then no\nloans shall be qualified financial instruments, (iii) stock that is\ninvestment capital as defined in paragraph (a) of subdivision five of\nsection two hundred eight of this article shall not be a qualified\nfinancial instrument, and (iv) stock that generates other exempt income\nas defined in subdivision six-a of section two hundred eight of this\narticle and that is not marked to market under section 475 or section\n1256 of the internal revenue code shall not constitute a qualified\nfinancial instrument with respect to the income from that stock that is\ndescribed in such subdivision six-a. If a corporation is included in a\ncombined report, the definition of qualified financial instrument shall\nbe determined on a combined basis. In the case of a RIC or a REIT that\nis not a captive RIC or a captive REIT, a qualified financial instrument\nmeans a financial instrument that is of a type described in any of\nclauses (A), (B), (C), (D), (G), (H) or (I) of subparagraph two of this\nparagraph, other than (i) a loan secured by real property, (ii) stock\nthat is investment capital as defined in paragraph (a) of subdivision\nfive of section two hundred eight of this article, and (iii) stock that\ngenerates other exempt income as defined in subdivision six-a of section\ntwo hundred eight of this article with respect to the income from that\nstock that is described in such subdivision six-a.\n (1) Fixed percentage method for qualified financial instruments. In\ndetermining the inclusion of receipts and net gains from qualified\nfinancial instruments in the apportionment fraction, taxpayers may elect\nto use the fixed percentage method described in this subparagraph for\nqualified financial instruments. The election is irrevocable, applies to\nall qualified financial instruments, and must be made on an annual basis\non the taxpayer's original, timely filed return, determined with regard\nto extensions of time for filing. If the taxpayer elects the fixed\npercentage method, then all income, gain or loss, including marked to\nmarket net gains as defined in clause (J) of subparagraph two of this\nparagraph, from qualified financial instruments constitutes business\nincome, gain or loss. If the taxpayer does not elect to use the fixed\npercentage method, then receipts and net gains are included in the\napportionment fraction in accordance with the customer sourcing method\ndescribed in subparagraph two of this paragraph. Under the fixed\npercentage method, eight percent of all net income (not less than zero)\nfrom qualified financial instruments is included in the numerator of the\napportionment fraction. All net income (not less than zero) from\nqualified financial instruments is included in the denominator of the\napportionment fraction.\n (2) Customer sourcing method. Receipts and net gains from qualified\nfinancial instruments, in cases where the taxpayer did not elect to use\nthe fixed percentage method described in subparagraph one of this\nparagraph, and from nonqualified financial instruments are included in\nthe apportionment fraction in accordance with this subparagraph. For\npurposes of this paragraph, an individual is deemed to be located in the\nstate if his or her billing address is in the state. A business entity\nis deemed to be located in the state if its commercial domicile is\nlocated in the state.\n (A) Loans. (i) Receipts constituting interest from loans secured by\nreal property located within the state shall be included in the\nnumerator of the apportionment fraction. Receipts constituting interest\nfrom loans secured by real property located within and without the state\nshall be included in the denominator of the apportionment fraction.\n (ii) Receipts constituting interest from loans not secured by real\nproperty shall be included in the numerator of the apportionment\nfraction if the borrower is located in the state. Receipts constituting\ninterest from loans not secured by real property, whether the borrower\nis located within or without the state, shall be included in the\ndenominator of the apportionment fraction.\n (iii) Net gains (not less than zero) from sales of loans secured by\nreal property are included in the numerator of the apportionment\nfraction as provided in this subclause. The amount of net gains from the\nsale of loans secured by real property included in the numerator of the\napportionment fraction is determined by multiplying the net gains by a\nfraction the numerator of which is the amount of gross proceeds from\nsales of loans secured by real property located within the state and the\ndenominator of which is the gross proceeds from sales of loans secured\nby real property within and without the state. Gross proceeds shall be\ndetermined after the deduction of any cost incurred to acquire the loans\nbut shall not be less than zero. Net gains (not less than zero) from\nsales of loans secured by real property within and without the state are\nincluded in the denominator of the apportionment fraction.\n (iv) Net gains (not less than zero) from sales of loans not secured by\nreal property are included in the numerator of the apportionment\nfraction as provided in this subclause. The amount of net gains from the\nsale of loans not secured by real property included in the numerator of\nthe apportionment fraction is determined by multiplying the net gains by\na fraction, the numerator of which is the amount of gross proceeds from\nsales of loans not secured by real property to purchasers located within\nthe state and the denominator of which is the amount of gross proceeds\nfrom sales of loans not secured by real property to purchasers located\nwithin and without the state. Gross proceeds shall be determined after\nthe deduction of any cost incurred to acquire the loans but shall not be\nless than zero. Net gains (not less than zero) from sales of loans not\nsecured by real property are included in the denominator of the\napportionment fraction.\n (v) For purposes of this subdivision, a loan is secured by real\nproperty if fifty percent or more of the value of the collateral used to\nsecure the loan, when valued at fair market value as of the time the\nloan was entered into, consists of real property.\n (B) Federal, state, and municipal debt. Receipts constituting interest\nand net gains from sales of debt instruments issued by the United\nStates, any state, or political subdivision of a state shall not be\nincluded in the numerator of the apportionment fraction. Receipts\nconstituting interest and net gains (not less than zero) from sales of\ndebt instruments issued by the United States and the state of New York\nor its political subdivisions shall be included in the denominator of\nthe apportionment fraction. Fifty percent of the receipts constituting\ninterest and net gains (not less than zero) from sales of debt\ninstruments issued by other states or their political subdivisions shall\nbe included in the denominator of the apportionment fraction.\n (C) Asset backed securities and other government agency debt. Eight\npercent of the interest income from asset backed securities or other\nsecurities issued by government agencies, including but not limited to\nsecurities issued by the Government National Mortgage Association\n(GNMA), the Federal National Mortgage Association (FNMA), the Federal\nHome Loan Mortgage Corporation (FHLMC), or the Small Business\nAdministration, or asset backed securities issued by other entities\nshall be included in the numerator of the apportionment fraction. Eight\npercent of the net gains (not less than zero) from (i) sales of asset\nbacked securities or other securities issued by government agencies,\nincluding but not limited to securities issued by GNMA, FNMA, or FHLMC,\nthe Small Business Administration, or (ii) sales of other asset backed\nsecurities that are sold through a registered securities broker or\ndealer or through a licensed exchange, shall be included in the\nnumerator of the apportionment fraction. The amount of net gains (not\nless than zero) from sales of other asset backed securities not\nreferenced in subclause (i) or (ii) of this clause included in the\nnumerator of the apportionment fraction is determined by multiplying\nsuch net gains by a fraction, the numerator of which is the amount of\ngross proceeds from such sales to purchasers located in the state and\nthe denominator of which is the amount of gross proceeds from such sales\nto purchasers located within and without the state. Receipts\nconstituting interest from asset backed securities and other securities\nreferenced in this clause and net gains (not less than zero) from sales\nof asset backed securities and other securities referenced in this\nclause are included in the denominator of the apportionment fraction.\nGross proceeds shall be determined after the deduction of any cost to\nacquire the securities but shall not be less than zero.\n (D) Corporate bonds. Receipts constituting interest from corporate\nbonds are included in the numerator of the apportionment fraction if the\ncommercial domicile of the issuing corporation is in the state. Eight\npercent of the net gains (not less than zero) from sales of corporate\nbonds sold through a registered securities broker or dealer or through a\nlicensed exchange is included in the numerator of the apportionment\nfraction. The amount of net gains (not less than zero) from other sales\nof corporate bonds included in the numerator of the apportionment\nfraction is determined by multiplying such net gains by a fraction, the\nnumerator of which is the amount of gross proceeds from such sales to\npurchasers located in the state and the denominator of which is the\namount of gross proceeds from sales to purchasers located within and\nwithout the state. Receipts constituting interest from corporate bonds,\nwhether the issuing corporation's commercial domicile is within or\nwithout the state, and net gains (not less than zero) from sales of\ncorporate bonds to purchasers within and without the state are included\nin the denominator of the apportionment fraction. Gross proceeds shall\nbe determined after the deduction of any cost to acquire the bonds but\nshall not be less than zero.\n (E) Reverse repurchase agreements and securities borrowing agreements.\nEight percent of net interest income (not less than zero) from reverse\nrepurchase agreements and securities borrowing agreements shall be\nincluded in the numerator of the apportionment fraction. Net interest\nincome (not less than zero) from reverse repurchase agreements and\nsecurities borrowing agreements is included in the denominator of the\napportionment fraction. Net interest income from reverse repurchase\nagreements and securities borrowing agreements is determined for\npurposes of this subdivision after the deduction of the interest expense\nfrom the taxpayer's repurchase agreements and securities lending\nagreements but cannot be less than zero. For this calculation, the\namount of such interest expense is the interest expense associated with\nthe sum of the value of the taxpayer's repurchase agreements where it is\nthe seller/borrower plus the value of the taxpayer's securities lending\nagreements where it is the securities lender, provided such sum is\nlimited to the sum of the value of the taxpayer's reverse repurchase\nagreements where it is the purchaser/lender plus the value of the\ntaxpayer's securities lending agreements where it is the securities\nborrower.\n (F) Federal funds. Eight percent of the net interest (not less than\nzero) from federal funds is included in the numerator of the\napportionment fraction. The net interest (not less than zero) from\nfederal funds is included in the denominator of the apportionment\nfraction. Net interest from federal funds is determined after deduction\nof interest expense from federal funds.\n (G) Dividends and net gains from sales of stock or partnership\ninterests. Dividends from stock, net gains (not less than zero) from\nsales of stock and net gains (not less than zero) from the sale of\npartnership interests are not included in either the numerator or\ndenominator of the apportionment fraction unless the commissioner\ndetermines pursuant to subdivision eleven of this section that inclusion\nof such dividends and net gains (not less than zero) is necessary to\nproperly reflect the business income or capital of the taxpayer.\n (H) Other financial instruments. (i) Receipts constituting interest\nfrom other financial instruments shall be included in the numerator of\nthe apportionment fraction if the payor is located in the state.\nReceipts constituting interest from other financial instruments, whether\nthe payor is within or without the state, are included in the\ndenominator of the apportionment fraction.\n (ii) Net gains (not less than zero) from sales of other financial\ninstruments and other income (not less than zero) from other financial\ninstruments where the purchaser or payor is located in the state are\nincluded in the numerator of the apportionment fraction, provided that,\nif the purchaser or payor is a registered securities broker or dealer or\nthe transaction is made through a licensed exchange, then eight percent\nof the net gains (not less than zero) or other income (not less than\nzero) is included in the numerator of the apportionment fraction. Net\ngains (not less than zero) from sales of other financial instruments and\nother income (not less than zero) from other financial instruments are\nincluded in the denominator of the apportionment fraction.\n (I) Physical commodities. Net income (not less than zero) from sales\nof physical commodities are included in the numerator of the\napportionment fraction as provided in this clause. The amount of net\nincome from sales of physical commodities included in the numerator of\nthe apportionment fraction is determined by multiplying the net income\nfrom sales of physical commodities by a fraction, the numerator of which\nis the amount of receipts from sales of physical commodities actually\ndelivered to points within the state or, if there is no actual delivery\nof the physical commodity, sold to purchasers located in the state, and\nthe denominator of which is the amount of receipts from sales of\nphysical commodities actually delivered to points within and without the\nstate or, if there is no actual delivery of the physical commodity, sold\nto purchasers located within and without the state. Net income (not less\nthan zero) from sales of physical commodities is included in the\ndenominator of the apportionment fraction. Net income (not less than\nzero) from sales of physical commodities is determined after the\ndeduction of the cost to acquire or produce the physical commodities.\n (J) Marked to market net gains. (i) For purposes of this subdivision,\n"marked to market" means that a financial instrument is, under section\n475 or section 1256 of the internal revenue code, treated by the\ntaxpayer as sold for its fair market value on the last business day of\nthe taxpayer's taxable year. "Marked to market gain or loss" means the\ngain or loss recognized by the taxpayer under section 475 or section\n1256 of the internal revenue code because the financial instrument is\ntreated as sold for its fair market value on the last business day of\nthe taxpayer's taxable year.\n (ii) The amount of marked to market net gains (not less than zero)\nfrom each type of financial instrument that is marked to market included\nin the numerator of the apportionment fraction is determined by\nmultiplying the marked to market net gains (but not less than zero) from\nsuch type of the financial instrument by a fraction, the numerator of\nwhich is the numerator of the apportionment fraction for the net gains\nfrom that type of financial instrument determined under the applicable\nclause of this subparagraph and the denominator of which is the\ndenominator of the apportionment fraction for the net gains for that\ntype of financial instrument determined under the applicable clause of\nthis subparagraph. Marked to market net gains (not less than zero) from\nfinancial instruments for which the numerator of the apportionment\nfraction is determined under the immediately preceding sentence are\nincluded in the denominator of the apportionment fraction.\n (iii) If the type of financial instrument that is marked to market is\nnot otherwise sourced by the taxpayer under this subparagraph, or if the\ntaxpayer has a net loss from the sales of that type of financial\ninstrument under the applicable clause of this subparagraph, the amount\nof marked to market net gains (not less than zero) from that type of\nfinancial instrument included in the numerator of the apportionment\nfraction is determined by multiplying the marked to market net gains\n(but not less than zero) from that type of financial instrument by a\nfraction, the numerator of which is the sum of the amount of receipts\nincluded in the numerator of the apportionment fraction under clauses\n(A), (B), (C), (D), (E), (F), (G), (H) and (I) of this subparagraph and\nsubclause (ii) of this clause, and the denominator of which is the sum\nof the amount of receipts included in the denominator of the\napportionment fraction under clauses (A), (B), (C), (D), (E), (F), (G),\n(H) and (I) and subclause (ii) of this clause. Marked to market net\ngains (not less than zero) for which the amount to be included in the\nnumerator of the apportionment fraction is determined under the\nimmediately preceding sentence are included in the denominator of the\napportionment fraction.\n (b) Other receipts from broker or dealer activities. Receipts of a\nregistered securities broker or dealer from securities or commodities\nbroker or dealer activities described in this paragraph shall be deemed\nto be generated within the state as described in subparagraphs one\nthrough eight of this paragraph. Receipts from such activities generated\nwithin the state shall be included in the numerator of the apportionment\nfraction. Receipts from such activities generated within and without the\nstate shall be included in the denominator of the apportionment\nfraction. For the purposes of this paragraph, the term "securities"\nshall have the same meaning as in section 475(c)(2) of the internal\nrevenue code and the term "commodities" shall have the same meaning as\nin section 475(e)(2) of the internal revenue code.\n (1) Receipts constituting brokerage commissions derived from the\nexecution of securities or commodities purchase or sales orders for the\naccounts of customers shall be deemed to be generated within the state\nif the mailing address in the records of the taxpayer of the customer\nwho is responsible for paying such commissions is within the state.\n (2) Receipts constituting margin interest earned on behalf of\nbrokerage accounts shall be deemed to be generated within the state if\nthe mailing address in the records of the taxpayer of the customer who\nis responsible for paying such margin interest is within the state.\n (3)(A) Receipts constituting fees earned by the taxpayer for advisory\nservices to a customer in connection with the underwriting of securities\nfor such customer (such customer being the entity that is contemplating\nissuing or is issuing securities) or fees earned by the taxpayer for\nmanaging an underwriting shall be deemed to be generated within the\nstate if the mailing address in the records of the taxpayer of such\ncustomer who is responsible for paying such fees is within the state.\n (B) Receipts constituting the primary spread of selling concession\nfrom underwritten securities shall be deemed to be generated within the\nstate if the customer is located in the state.\n (C) The term "primary spread" means the difference between the price\npaid by the taxpayer to the issuer of the securities being marketed and\nthe price received from the subsequent sale of the underwritten\nsecurities at the initial public offering price, less any selling\nconcession and any fees paid to the taxpayer for advisory services or\nany manager's fees, if such fees are not paid by the customer to the\ntaxpayer separately. The term "public offering price" means the price\nagreed upon by the taxpayer and the issuer at which the securities are\nto be offered to the public. The term "selling concession" means the\namount paid to the taxpayer for participating in the underwriting of a\nsecurity where the taxpayer is not the lead underwriter.\n (4) Receipts constituting account maintenance fees shall be deemed to\nbe generated within the state if the mailing address in the record of\nthe taxpayer of the customer who is responsible for paying such account\nmaintenance fees is within the state.\n (5) Receipts constituting fees for management or advisory services,\nincluding fees for advisory services in relation to merger or\nacquisition activities, but excluding fees paid for services described\nin paragraph (d) of this subdivision, shall be deemed to be generated\nwithin the state if the mailing address in the records of the taxpayer\nof the customer who is responsible for paying such fees is within the\nstate.\n (6) Receipts constituting interest earned by the taxpayer on loans and\nadvances made by the taxpayer to a corporation affiliated with the\ntaxpayer but with which the taxpayer is not permitted or required to\nfile a combined report pursuant to section two hundred ten-C of this\narticle shall be deemed to arise from services performed at the\nprincipal place of business of such affiliated corporation.\n (7) If the taxpayer receives any of the receipts enumerated in\nsubparagraphs one through four of this paragraph as a result of a\nsecurities correspondent relationship such taxpayer has with another\nbroker or dealer with the taxpayer acting in this relationship as the\nclearing firm, such receipts shall be deemed to be generated within the\nstate to extent set forth in each of such subparagraphs. The amount of\nsuch receipts shall exclude the amount the taxpayer is required to pay\nto the correspondent firm for such correspondent relationship. If the\ntaxpayer receives any of the receipts enumerated in subparagraphs one\nthrough four of this paragraph as as result of a securities\ncorrespondent relationship such taxpayer has with another broker or\ndealer with the taxpayer acting in this relationship as the introducing\nfirm, such receipts shall be deemed to be generated within the state to\nthe extent set forth in each of such subparagraphs.\n (8) If, for purposes of subparagraphs one, two, clause (A) of\nsubparagraph three, four, or five of this paragraph the taxpayer is\nunable from its records to determine the mailing address of the\ncustomer, eight percent of the receipts is included in the numerator of\nthe apportionment fraction.\n (c) Receipts from credit card and similar activities. Receipts\nrelating to the bank, credit, travel and entertainment card activities\ndescribed in this paragraph shall be deemed to be generated within the\nstate as described in subparagraphs one through four of this paragraph.\nReceipts from such activities generated within the state shall be\nincluded in the numerator of the apportionment fraction. Receipts from\nsuch activities generated within and without the state shall be included\nin the denominator of the apportionment fraction.\n (1) Receipts constituting interest, and fees and penalties in the\nnature of interest, from bank, credit, travel and entertainment card\nreceivables shall be deemed to be generated within the state if the\nmailing address of the card holder in the records of the taxpayer is in\nthe state;\n (2) Receipts from service charges and fees from such cards shall be\ndeemed to be generated within the state if the mailing address of the\ncard holder in the records of the taxpayer is in the state; and\n (3) Receipts from merchant discounts shall be deemed to be generated\nwithin the state if the merchant is located within the state. In the\ncase of a merchant with locations both within and without New York\nstate, only receipts from merchant discounts attributable to sales made\nfrom locations within New York state are allocated to New York state. It\nshall be presumed that the location of the merchant is the address of\nthe merchant shown on the invoice submitted by the merchant to the\ntaxpayer.\n (4) Receipts from credit card authorization processing, and clearing\nand settlement processing received by credit card processors shall be\ndeemed to be generated within the state if the location where the credit\ncard processor's customer accesses the credit card processor's network\nis located within the state. The amount of all other receipts received\nby credit card processors not specifically addressed in subdivisions one\nthrough nine of this section deemed to be generated within the state\nshall be determined by multiplying the total amount of such other\nreceipts by the average of (i) eight percent and (ii) the percent of its\nNew York access points. The percent of New York access points is the\nnumber of locations in New York from which the credit card processor's\ncustomers access the credit card processor's network divided by the\ntotal number of locations in the United States where the credit card\nprocessor's customers access the credit card processor's network.\n (d) Receipts from certain services to investment companies. Receipts\nreceived from an investment company arising from the sale of management,\nadministration or distribution services to such investment company are\nincluded in the denominator of the apportionment fraction. The portion\nof such receipts included in the numerator of the apportionment fraction\n(such portion referred to herein as the New York portion) shall be\ndetermined as provided in this paragraph.\n (1) The New York portion shall be the product of the total of such\nreceipts from the sale of such services and a fraction. The numerator of\nthat fraction is the sum of the monthly percentages (as defined\nhereinafter) determined for each month of the investment company's\ntaxable year for federal income tax purposes which taxable year ends\nwithin the taxable year of the taxpayer (but excluding any month during\nwhich the investment company had no outstanding shares). The monthly\npercentage for each such month is determined by dividing the number of\nshares in the investment company that are owned on the last day of the\nmonth by shareholders that are located in the state by the total number\nof shares in the investment company outstanding on that date. The\ndenominator of the fraction is the number of such monthly percentages.\n (2)(A) For purposes of this paragraph, an individual, estate or trust\nis deemed to be located in the state if his, her or its mailing address\non the records of the investment company is in the state. A business\nentity is deemed to be located in the state if its commercial domicile\nis located in the state.\n (B) For purposes of this paragraph, the term "investment company"\nmeans a regulated investment company, as defined in section 851 of the\ninternal revenue code, and a partnership to which section 7704(a) of the\ninternal revenue code applies (by virtue of section 7704(c)(3) of such\ncode) and that meets the requirements of section 851(b) of such code.\nThe preceding sentence shall be applied to the taxable year for federal\nincome tax purposes of the business entity that is asserted to\nconstitute an investment company that ends within the taxable year of\nthe taxpayer.\n (C) For purposes of this paragraph the term "receipts from an\ninvestment company" includes amounts received directly from an\ninvestment company as well as amounts received from the shareholders in\nsuch investment company, in their capacity as such.\n (D) For purposes of this paragraph, the term "management services"\nmeans the rendering of investment advice to an investment company,\nmaking determinations as to when sales and purchases of securities are\nto be made on behalf of an investment company, or the selling or\npurchasing of securities constituting assets of an investment company,\nand related activities, but only where such activity or activities are\nperformed pursuant to a contract with the investment company entered\ninto pursuant to section 15(a) of the federal investment company act of\nnineteen hundred forty, as amended.\n (E) For purposes of this paragraph, the term "distribution services"\nmeans the services of advertising, servicing investor accounts\n(including redemptions), marketing shares or selling shares of an\ninvestment company, but, in the case of advertising, servicing investor\naccounts (including redemptions) or marketing shares, only where such\nservice is performed by a person who is (or was, in the case of a closed\nend company) also engaged in the service of selling such shares. In the\ncase of an open end company, such service of selling shares must be\nperformed pursuant to a contract entered into pursuant to section 15(b)\nof the federal investment company act of nineteen hundred forty, as\namended.\n (F) For purposes of this paragraph, the term "administration services"\nincludes clerical, accounting, bookkeeping, data processing, internal\nauditing, legal and tax services performed for an investment company but\nonly if the provider of such service or services during the taxable year\nin which such service or services are sold also sells management or\ndistribution services, as defined hereinabove, to such investment\ncompany.\n (e) For purposes of this subdivision, a taxpayer shall use the\nfollowing hierarchy to determine the commercial domicile of a business\nentity, based on the information known to the taxpayer or information\nthat would be known upon reasonable inquiry: (i) the seat of management\nand control of the business entity; and (ii) the billing address of the\nbusiness entity in the taxpayer's records. The taxpayer must exercise\ndue diligence before rejecting the first method in this hierarchy and\nproceeding to the next method.\n (f) For purposes of this subdivision, the term "registered securities\nbroker or dealer" means a broker or dealer registered as such by the\nsecurities and exchange commission or a broker or dealer registered as\nsuch by the commodities futures trading commission, and shall include an\nOTC derivatives dealer as defined under regulations of the securities\nand exchange commission at title 17, part 240, section 3b-12 of the code\nof federal regulations (17 CFR 240.3b-12).\n 5-a. Global intangible low-taxed income. (a) Notwithstanding any other\nprovision of this section, global intangible low-taxed income shall be\nincluded in the apportionment fraction as provided in this subdivision.\n (b) For New York C corporations, global intangible low-taxed income\nshall not be included in the numerator of the apportionment fraction.\nFive percent of global intangible low-taxed income shall be included in\nthe denominator of the apportionment fraction.\n (c) For New York S corporations, global intangible low-taxed income\nshall not be included in the numerator of the apportionment fraction.\nGlobal intangible low-taxed income shall be included in the denominator\nof the apportionment fraction.\n (d) For purposes of this subdivision, the term "global intangible\nlow-taxed income" means the amount required to be included in the\ntaxpayer's federal gross income pursuant to subsection (a) of section\n951A of the internal revenue code.\n 6. Receipts from railroad and trucking business. Receipts from the\nconduct of a railroad business (including surface railroad, whether or\nnot operated by steam, subway railroad, elevated railroad, palace car or\nsleeping car business) or a trucking business are included in the\nnumerator of the apportionment fraction as follows. The amount of\nreceipts from the conduct of a railroad business or a trucking business\nincluded in the numerator of the apportionment fraction is determined by\nmultiplying the amount of receipts from such business by a fraction, the\nnumerator of which is the miles in such business within the state during\nthe period covered by the taxpayer's report and the denominator of which\nis the miles in such business within and without the state during such\nperiod. Receipts from the conduct of the railroad business or a trucking\nbusiness are included in the denominator of the apportionment fraction.\n 6-a. Receipts from the operation of vessels. Receipts from the\noperation of vessels are included in the numerator of the apportionment\nfraction as follows. The amount of receipts from the operation of\nvessels included in the numerator of the apportionment fraction is\ndetermined by multiplying the amount of such receipts by a fraction, the\nnumerator of which is the aggregate number of working days of the\nvessels owned or leased by the taxpayer in territorial waters of the\nstate during the period covered by the taxpayer's report and the\ndenominator of which is the aggregate number of working days of all\nvessels owned or leased by the taxpayer during such period. Receipts\nfrom the operation of vessels are included in the denominator of the\napportionment fraction.\n 7. Receipts from aviation services. (a) Air freight forwarding.\nReceipts of a taxpayer from the activity of air freight forwarding\nacting as principal and like indirect air carrier receipts arising from\nsuch activity shall be included in the numerator of the apportionment\nfraction as follows: one hundred percent of such receipts if both the\npickup and delivery associated with such receipts are made in the state\nand fifty percent of such receipts if either the pickup or delivery\nassociated with such receipts is made in this state. Such receipts,\nwhether the pickup or delivery associated with the receipts is within or\nwithout the state, shall be included in the denominator of the\napportionment fraction.\n (b) Other aviation services. (1)(A) The portion of receipts of a\ntaxpayer from aviation services (other than services described in\nparagraph (a) of this subdivision, but including the receipts of a\nqualified air freight forwarder) to be included in the numerator of the\napportionment fraction shall be determined by multiplying its receipts\nfrom such aviation services by a percentage which is equal to the\narithmetic average of the following three percentages:\n (i) the percentage determined by dividing sixty percent of the\naircraft arrivals and departures within this state by the taxpayer\nduring the period covered by its report by the total aircraft arrivals\nand departures within and without this state during such period;\nprovided, however, arrivals and departures solely for maintenance or\nrepair, refueling (where no debarkation or embarkation of traffic\noccurs), arrivals and departures of ferry and personnel training flights\nor arrivals and departures in the event of emergency situations shall\nnot be included in computing such arrival and departure percentage;\nprovided, further, the commissioner may also exempt from such percentage\naircraft arrivals and departures of all non-revenue flights including\nflights involving the transportation of officers or employees receiving\nair transportation to perform maintenance or repair services or where\nsuch officers or employees are transported in conjunction with an\nemergency situation or the investigation of an air disaster (other than\non a scheduled flight); provided, however, that arrivals and departures\nof flights transporting officers and employees receiving air\ntransportation for purposes other than specified above (without regard\nto remuneration) shall be included in computing such arrival and\ndeparture percentage;\n (ii) the percentage determined by dividing sixty percent of the\nrevenue tons handled by the taxpayer at airports within this state\nduring such period by the total revenue tons handled by it at airports\nwithin and without this state during such period; and\n (iii) the percentage determined by dividing sixty percent of the\ntaxpayer's originating revenue within this state for such period by its\ntotal originating revenue within and without this state for such period.\n (B) As used herein the term "aircraft arrivals and departures" means\nthe number of landings and takeoffs of the aircraft of the taxpayer and\nthe number of air pickups and deliveries by the aircraft of such\ntaxpayer; the term "originating revenue" means revenue to the taxpayer\nfrom the transportation or revenue passengers and revenue property first\nreceived by the taxpayer either as originating or connecting traffic at\nairports; and the term "revenue tons handled" by the taxpayer at\nairports means the weight in tons of revenue passengers (at two hundred\npounds per passenger) and revenue cargo first received either as\noriginating or connecting traffic or finally discharged by the taxpayer\nat airports;\n (2) All such receipts of a taxpayer from aviation services described\nin this paragraph are included in the denominator of the apportionment\nfraction.\n (3) A corporation is a qualified air freight forwarder with respect to\nanother corporation:\n (A) if it owns or controls either directly or indirectly all of the\ncapital stock of such other corporation, or if all of its capital stock\nis owned or controlled either directly or indirectly by such other\ncorporation, or if all of the capital stock of both corporations is\nowned or controlled either directly or indirectly by the same interests,\n (B) if it is principally engaged in the business of air freight\nforwarding, and\n (C) if its air freight forwarding business is carried on principally\nwith the airline or airlines operated by such other corporation.\n 8. Receipts from sales of advertising. (a) The amount of receipts from\nsales of advertising in newspapers or periodicals included in the\nnumerator of the apportionment fraction is determined by multiplying the\ntotal of such receipts by a fraction, the numerator of which is the\nnumber of newspapers and periodicals delivered to points within the\nstate and the denominator of which is the number of newspapers and\nperiodicals delivered to points within and without the state. The total\nof such receipts from sales of advertising in newspapers or periodicals\nis included in the denominator of the apportionment fraction.\n (b) The amount of receipts from sales of advertising on television or\nradio included in the numerator of the apportionment fraction is\ndetermined by multiplying the total of such receipts by a fraction, the\nnumerator of which is the number of viewers or listeners within the\nstate and the denominator of which is the number of viewers or listeners\nwithin and without the state. The total of such receipts from sales of\nadvertising on television and radio is included in the denominator of\nthe apportionment fraction.\n (c) The amount of receipts from sales of advertising not described in\nparagraph (a) or (b) of this subdivision that is furnished, provided or\ndelivered to, or accessed by the viewer or listener through the use of\nwire, cable, fiber-optic, laser, microwave, radio wave, satellite or\nsimilar successor media or any combination thereof, included in the\nnumerator of the apportionment fraction is determined by multiplying the\ntotal of such receipts by a fraction, the numerator of which is the\nnumber of viewers or listeners within the state and the denominator of\nwhich is the number of viewers or listeners within and without the\nstate. The total of such receipts from sales of advertising described in\nthis paragraph is included in the denominator of the apportionment\nfraction.\n 9. Receipts from transportation or transmission of gas through pipes.\nReceipts from the transportation or transmission of gas through pipes\nare included in the numerator of the apportionment fraction as follows.\nThe amount of receipts from the transportation or transmission of gas\nthrough pipes included in the numerator of the apportionment fraction is\ndetermined by multiplying the total amount of such receipts by a\nfraction, the numerator of which is the taxpayer's transportation units\nwithin the state and the denominator of which is the taxpayer's\ntransportation units within and without the state. A transportation unit\nis the transportation of one cubic foot of gas over a distance of one\nmile. The total amount of receipts from the transportation or\ntransmission of gas through pipes is included in the denominator of the\napportionment fraction.\n 10. (a) Receipts from other services and other business receipts.\nReceipts from services not addressed in subdivisions one through nine of\nthis section and other business receipts not addressed in such\nsubdivisions shall be included in the numerator of the apportionment\nfraction if the location of the customer is within the state. Such\nreceipts from customers within and without the state are included in the\ndenominator of the apportionment fraction. Whether the receipts are\nincluded in the numerator of the apportionment fraction is determined\naccording to the hierarchy of method set forth in paragraph (b) of this\nsubdivision. The taxpayer must exercise due diligence under each method\ndescribed in such paragraph (b) before rejecting it and proceeding to\nthe next method in the hierarchy, and must base its determination on\ninformation known to the taxpayer or information that would be known to\nthe taxpayer upon reasonable inquiry.\n (b) Hierarchy of methods. (1) The benefit is received in this state;\n (2) Delivery destination;\n (3) The apportionment fraction for such receipts within the state\ndetermined pursuant to this subdivision for the preceding taxable year;\nor\n (4) The apportionment fraction in the current taxable year determined\npursuant to this subdivision for those receipts that can be sourced\nusing the hierarchy of sourcing methods in subparagraphs one and two of\nthis paragraph.\n 11. If it shall appear that the apportionment fraction determined\npursuant to this section does not result in a proper reflection of the\ntaxpayer's business income or capital within the state, the commissioner\nis authorized in his or her discretion to adjust it, or the taxpayer may\nrequest that the commissioner adjust it, by (a) excluding one or more\nitems in such determination, (b) including one or more other items in\nsuch determination, or (c) any other similar or different method\ncalculated to effect a fair and proper apportionment of the business\nincome and capital reasonably attributed to the state. The party seeking\nthe adjustment shall bear the burden of proof to demonstrate that the\napportionment fraction determined pursuant to this section does not\nresult in a proper reflection of the taxpayer's business income or\ncapital within the state and that the proposed adjustment is\nappropriate.\n