S. 5898 2
(A) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND NINE, THE BUSINESS
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(I) THE PRODUCT OF THIRTY PERCENT AND THE PERCENTAGE DETERMINED UNDER
SUBPARAGRAPH ONE OF THIS PARAGRAPH,
(II) THE PRODUCT OF FORTY PERCENT AND THE PERCENTAGE DETERMINED UNDER
SUBPARAGRAPH TWO OF THIS PARAGRAPH, AND
(III) THE PRODUCT OF THIRTY PERCENT AND THE PERCENTAGE DETERMINED
UNDER SUBPARAGRAPH THREE OF THIS PARAGRAPH.
(B) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND TEN, THE BUSINESS
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(I) THE PRODUCT OF TWENTY-SEVEN PERCENT AND THE PERCENTAGE DETERMINED
UNDER SUBPARAGRAPH ONE OF THIS PARAGRAPH,
(II) THE PRODUCT OF FORTY-SIX PERCENT AND THE PERCENTAGE DETERMINED
UNDER SUBPARAGRAPH TWO OF THIS PARAGRAPH, AND
(III) THE PRODUCT OF TWENTY-SEVEN PERCENT AND THE PERCENTAGE DETER-
MINED UNDER SUBPARAGRAPH THREE OF THIS PARAGRAPH.
(C) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND ELEVEN, THE BUSINESS
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(I) THE PRODUCT OF TWENTY-THREE AND ONE-HALF PERCENT AND THE PERCENT-
AGE DETERMINED UNDER SUBPARAGRAPH ONE OF THIS PARAGRAPH,
(II) THE PRODUCT OF FIFTY-THREE PERCENT AND THE PERCENTAGE DETERMINED
UNDER SUBPARAGRAPH TWO OF THIS PARAGRAPH, AND
(III) THE PRODUCT OF TWENTY-THREE AND ONE-HALF PERCENT AND THE
PERCENTAGE DETERMINED UNDER SUBPARAGRAPH THREE OF THIS PARAGRAPH.
(D) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND TWELVE, THE BUSINESS
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(I) THE PRODUCT OF TWENTY PERCENT AND THE PERCENTAGE DETERMINED UNDER
SUBPARAGRAPH ONE OF THIS PARAGRAPH,
(II) THE PRODUCT OF SIXTY PERCENT AND THE PERCENTAGE DETERMINED UNDER
SUBPARAGRAPH TWO OF THIS PARAGRAPH, AND
(III) THE PRODUCT OF TWENTY PERCENT AND THE PERCENTAGE DETERMINED
UNDER SUBPARAGRAPH THREE OF THIS PARAGRAPH.
(E) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND THIRTEEN, THE BUSINESS
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(I) THE PRODUCT OF SIXTEEN AND ONE-HALF PERCENT AND THE PERCENTAGE
DETERMINED UNDER SUBPARAGRAPH ONE OF THIS PARAGRAPH,
(II) THE PRODUCT OF SIXTY-SEVEN PERCENT AND THE PERCENTAGE DETERMINED
UNDER SUBPARAGRAPH TWO OF THIS PARAGRAPH, AND
(III) THE PRODUCT OF SIXTEEN AND ONE-HALF PERCENT AND THE PERCENTAGE
DETERMINED UNDER SUBPARAGRAPH THREE OF THIS PARAGRAPH.
(F) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FOURTEEN, THE BUSINESS
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(I) THE PRODUCT OF THIRTEEN AND ONE-HALF PERCENT AND THE PERCENTAGE
DETERMINED UNDER SUBPARAGRAPH ONE OF THIS PARAGRAPH,
(II) THE PRODUCT OF SEVENTY-THREE PERCENT AND THE PERCENTAGE DETER-
MINED UNDER SUBPARAGRAPH TWO OF THIS PARAGRAPH, AND
(III) THE PRODUCT OF THIRTEEN AND ONE-HALF PERCENT AND THE PERCENTAGE
DETERMINED UNDER SUBPARAGRAPH THREE OF THIS PARAGRAPH.
S. 5898 3
(G) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FIFTEEN, THE BUSINESS
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(I) THE PRODUCT OF TEN PERCENT AND THE PERCENTAGE DETERMINED UNDER
SUBPARAGRAPH ONE OF THIS PARAGRAPH,
(II) THE PRODUCT OF EIGHTY PERCENT AND THE PERCENTAGE DETERMINED UNDER
SUBPARAGRAPH TWO OF THIS PARAGRAPH, AND
(III) THE PRODUCT OF TEN PERCENT AND THE PERCENTAGE DETERMINED UNDER
SUBPARAGRAPH THREE OF THIS PARAGRAPH.
(H) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SIXTEEN, THE BUSINESS
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(I) THE PRODUCT OF SIX AND ONE-HALF PERCENT AND THE PERCENTAGE DETER-
MINED UNDER SUBPARAGRAPH ONE OF THIS PARAGRAPH,
(II) THE PRODUCT OF EIGHTY-SEVEN PERCENT AND THE PERCENTAGE DETERMINED
UNDER SUBPARAGRAPH TWO OF THIS PARAGRAPH, AND
(III) THE PRODUCT OF SIX AND ONE-HALF PERCENT AND THE PERCENTAGE
DETERMINED UNDER SUBPARAGRAPH THREE OF THIS PARAGRAPH.
(I) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SEVENTEEN, THE BUSI-
NESS ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE
FOLLOWING PERCENTAGES:
(I) THE PRODUCT OF THREE AND ONE-HALF PERCENT AND THE PERCENTAGE
DETERMINED UNDER SUBPARAGRAPH ONE OF THIS PARAGRAPH,
(II) THE PRODUCT OF NINETY-THREE PERCENT AND THE PERCENTAGE DETERMINED
UNDER SUBPARAGRAPH TWO OF THIS PARAGRAPH, AND
(III) THE PRODUCT OF THREE AND ONE-HALF PERCENT AND THE PERCENTAGE
DETERMINED UNDER SUBPARAGRAPH THREE OF THIS PARAGRAPH.
(J) FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND SEVENTEEN, THE
BUSINESS ALLOCATION PERCENTAGE SHALL BE THE PERCENTAGE DETERMINED UNDER
SUBPARAGRAPH TWO OF THIS PARAGRAPH.
(K) THE COMMISSIONER SHALL PROMULGATE RULES NECESSARY TO IMPLEMENT THE
PROVISIONS OF THIS SUBPARAGRAPH UNDER SUCH CIRCUMSTANCES WHERE ANY OF
THE PERCENTAGES TO BE DETERMINED UNDER SUBPARAGRAPH ONE, TWO OR THREE OF
THIS PARAGRAPH CANNOT BE DETERMINED BECAUSE THE TAXPAYER HAS NO PROPER-
TY, RECEIPTS OR WAGES WITHIN OR WITHOUT THE CITY.
S 3. Paragraph 1 of subdivision (g) of section 11-508 of the adminis-
trative code of the city of New York, as added by chapter 625 of the
laws of 1996, is amended to read as follows:
(1) For taxable years beginning on or after July first, nineteen
hundred ninety-six AND BEFORE JANUARY FIRST, TWO THOUSAND ELEVEN, a
manufacturing business may elect to determine its business allocation
percentage by adding together the percentages determined under para-
graphs one, two and three of subdivision (c) of this section and an
additional percentage equal to the percentage determined under paragraph
three of subdivision (c) of this section, and dividing the result by the
number of percentages so added together.
S 4. Section 11-508 of the administrative code of the city of New York
is amended by adding a new subdivision (i) to read as follows:
(I) NOTWITHSTANDING SUBDIVISION (C) OF THIS SECTION, BUT SUBJECT TO
SUBDIVISION (G) OF THIS SECTION, THE BUSINESS ALLOCATION PERCENTAGE
SHALL BE COMPUTED IN THE MANNER SET FORTH IN THIS SUBDIVISION.
(1) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND NINE, THE BUSINESS
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(A) THE PRODUCT OF THIRTY PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH ONE OF SUBDIVISION (C) OF THIS SECTION,
S. 5898 4
(B) THE PRODUCT OF THIRTY PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH TWO OF SUBDIVISION (C) OF THIS SECTION, AND
(C) THE PRODUCT OF FORTY PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH THREE OF SUBDIVISION (C) OF THIS SECTION.
(2) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND TEN, THE BUSINESS
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(A) THE PRODUCT OF TWENTY-SEVEN PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH ONE OF SUBDIVISION (C) OF THIS SECTION,
(B) THE PRODUCT OF TWENTY-SEVEN PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH TWO OF SUBDIVISION (C) OF THIS SECTION, AND
(C) THE PRODUCT OF FORTY-SIX PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH THREE OF SUBDIVISION (C) OF THIS SECTION.
(3) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND ELEVEN, THE BUSINESS
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(A) THE PRODUCT OF TWENTY-THREE AND ONE-HALF PERCENT AND THE PERCENT-
AGE DETERMINED UNDER PARAGRAPH ONE OF SUBDIVISION (C) OF THIS SECTION,
(B) THE PRODUCT OF TWENTY-THREE AND ONE-HALF PERCENT AND THE PERCENT-
AGE DETERMINED UNDER PARAGRAPH TWO OF SUBDIVISION (C) OF THIS SECTION,
AND
(C) THE PRODUCT OF FIFTY-THREE PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH THREE OF SUBDIVISION (C) OF THIS SECTION.
(4) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND TWELVE, THE BUSINESS
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(A) THE PRODUCT OF TWENTY PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH ONE OF SUBDIVISION (C) OF THIS SECTION,
(B) THE PRODUCT OF TWENTY PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH TWO OF SUBDIVISION (C) OF THIS SECTION, AND
(C) THE PRODUCT OF SIXTY PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH THREE OF SUBDIVISION (C) OF THIS SECTION.
(5) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND THIRTEEN, THE BUSINESS
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(A) THE PRODUCT OF SIXTEEN AND ONE-HALF PERCENT AND THE PERCENTAGE
DETERMINED UNDER PARAGRAPH ONE OF SUBDIVISION (C) OF THIS SECTION,
(B) THE PRODUCT OF SIXTEEN AND ONE-HALF PERCENT AND THE PERCENTAGE
DETERMINED UNDER PARAGRAPH TWO OF SUBDIVISION (C) OF THIS SECTION, AND
(C) THE PRODUCT OF SIXTY-SEVEN PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH THREE OF SUBDIVISION (C) OF THIS SECTION.
(6) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FOURTEEN, THE BUSINESS
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(A) THE PRODUCT OF THIRTEEN AND ONE-HALF PERCENT AND THE PERCENTAGE
DETERMINED UNDER PARAGRAPH ONE OF SUBDIVISION (C) OF THIS SECTION,
(B) THE PRODUCT OF THIRTEEN AND ONE-HALF PERCENT AND THE PERCENTAGE
DETERMINED UNDER PARAGRAPH TWO OF SUBDIVISION (C) OF THIS SECTION, AND
(C) THE PRODUCT OF SEVENTY-THREE PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH THREE OF SUBDIVISION (C) OF THIS SECTION.
(7) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FIFTEEN, THE BUSINESS
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(A) THE PRODUCT OF TEN PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH ONE OF SUBDIVISION (C) OF THIS SECTION,
S. 5898 5
(B) THE PRODUCT OF TEN PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH TWO OF SUBDIVISION (C) OF THIS SECTION, AND
(C) THE PRODUCT OF EIGHTY PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH THREE OF SUBDIVISION (C) OF THIS SECTION.
(8) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SIXTEEN, THE BUSINESS
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(A) THE PRODUCT OF SIX AND ONE-HALF PERCENT AND THE PERCENTAGE DETER-
MINED UNDER PARAGRAPH ONE OF SUBDIVISION (C) OF THIS SECTION,
(B) THE PRODUCT OF SIX AND ONE-HALF PERCENT AND THE PERCENTAGE DETER-
MINED UNDER PARAGRAPH TWO OF SUBDIVISION (C) OF THIS SECTION, AND
(C) THE PRODUCT OF EIGHTY-SEVEN PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH THREE OF SUBDIVISION (C) OF THIS SECTION.
(9) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SEVENTEEN, THE BUSI-
NESS ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE
FOLLOWING PERCENTAGES:
(A) THE PRODUCT OF THREE AND ONE-HALF PERCENT AND THE PERCENTAGE
DETERMINED UNDER PARAGRAPH ONE OF SUBDIVISION (C) OF THIS SECTION,
(B) THE PRODUCT OF THREE AND ONE-HALF PERCENT AND THE PERCENTAGE
DETERMINED UNDER PARAGRAPH TWO OF SUBDIVISION (C) OF THIS SECTION, AND
(C) THE PRODUCT OF NINETY-THREE PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH THREE OF SUBDIVISION (C) OF THIS SECTION.
(10) FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND SEVENTEEN, THE
BUSINESS ALLOCATION PERCENTAGE SHALL BE THE PERCENTAGE DETERMINED UNDER
PARAGRAPH THREE OF SUBDIVISION (C) OF THIS SECTION.
(11) THE COMMISSIONER SHALL PROMULGATE RULES NECESSARY TO IMPLEMENT
THE PROVISIONS OF THIS SUBDIVISION UNDER SUCH CIRCUMSTANCES WHERE ANY OF
THE PERCENTAGES TO BE DETERMINED UNDER PARAGRAPH ONE, TWO OR THREE OF
SUBDIVISION (C) OF THIS SECTION CANNOT BE DETERMINED BECAUSE THE TAXPAY-
ER HAS NO PROPERTY, PAYROLL OR GROSS RECEIPTS FROM SALES OR SERVICES
WITHIN OR WITHOUT THE CITY.
S 5. Subdivision (b) of section 11-642 of the administrative code of
the city of New York is amended by adding a new paragraph 1-a to read as
follows:
(1-A) NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH ONE OF THIS SUBDIVI-
SION, EACH BANKING CORPORATION DESCRIBED IN PARAGRAPH NINE OF SUBDIVI-
SION (A) OF SECTION 11-640 OF THIS PART SUBJECT TO THE TAX IMPOSED BY
THIS PART THAT SUBSTANTIALLY PROVIDES MANAGEMENT, ADMINISTRATIVE OR
DISTRIBUTION SERVICES TO AN INVESTMENT COMPANY, AS SUCH TERMS ARE
DEFINED IN SUBPARAGRAPH (G) OF PARAGRAPH TWO OF SUBDIVISION (A) OF THIS
SECTION, SHALL DETERMINE THE PORTION OF ITS ENTIRE NET INCOME DERIVED
FROM BUSINESS CARRIED ON WITHIN THE CITY BY MULTIPLYING SUCH INCOME BY
AN INCOME ALLOCATION PERCENTAGE OBTAINED AS FOLLOWS:
(A) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND NINE, THE INCOME ALLO-
CATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOWING
PERCENTAGES:
(I) THE PRODUCT OF EIGHTEEN PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH ONE OF SUBDIVISION (A) OF THIS SECTION,
(II) THE PRODUCT OF FORTY-SIX PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH TWO OF SUBDIVISION (A) OF THIS SECTION, AND
(III) THE PRODUCT OF THIRTY-SIX PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH THREE OF SUBDIVISION (A) OF THIS SECTION.
(B) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND TEN, THE INCOME ALLO-
CATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOWING
PERCENTAGES:
S. 5898 6
(I) THE PRODUCT OF SIXTEEN PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH ONE OF SUBDIVISION (A) OF THIS SECTION,
(II) THE PRODUCT OF FIFTY-TWO PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH TWO OF SUBDIVISION (A) OF THIS SECTION, AND
(III) THE PRODUCT OF THIRTY-TWO PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH THREE OF SUBDIVISION (A) OF THIS SECTION.
(C) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND ELEVEN, THE INCOME
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(I) THE PRODUCT OF FOURTEEN PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH ONE OF SUBDIVISION (A) OF THIS SECTION,
(II) THE PRODUCT OF FIFTY-EIGHT PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH TWO OF SUBDIVISION (A) OF THIS SECTION, AND
(III) THE PRODUCT OF TWENTY-EIGHT PERCENT AND THE PERCENTAGE DETER-
MINED UNDER PARAGRAPH THREE OF SUBDIVISION (A) OF THIS SECTION.
(D) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND TWELVE, THE INCOME
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(I) THE PRODUCT OF TWELVE PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH ONE OF SUBDIVISION (A) OF THIS SECTION,
(II) THE PRODUCT OF SIXTY-FOUR PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH TWO OF SUBDIVISION (A) OF THIS SECTION, AND
(III) THE PRODUCT OF TWENTY-FOUR PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH THREE OF SUBDIVISION (A) OF THIS SECTION.
(E) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND THIRTEEN, THE INCOME
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(I) THE PRODUCT OF TEN PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH ONE OF SUBDIVISION (A) OF THIS SECTION,
(II) THE PRODUCT OF SEVENTY PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH TWO OF SUBDIVISION (A) OF THIS SECTION, AND
(III) THE PRODUCT OF TWENTY PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH THREE OF SUBDIVISION (A) OF THIS SECTION.
(F) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FOURTEEN, THE INCOME
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(I) THE PRODUCT OF EIGHT PERCENT AND THE PERCENTAGE DETERMINED UNDER
SUBPARAGRAPH ONE OF SUBDIVISION (A) OF THIS SECTION,
(II) THE PRODUCT OF SEVENTY-SIX PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH TWO OF SUBDIVISION (A) OF THIS SECTION, AND
(III) THE PRODUCT OF SIXTEEN PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH THREE OF SUBDIVISION (A) OF THIS SECTION.
(G) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FIFTEEN, THE INCOME
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(I) THE PRODUCT OF SIX PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH ONE OF SUBDIVISION (A) OF THIS SECTION,
(II) THE PRODUCT OF EIGHTY-TWO PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH TWO OF SUBDIVISION (A) OF THIS SECTION, AND
(III) THE PRODUCT OF TWELVE PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH THREE OF SUBDIVISION (A) OF THIS SECTION.
(H) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SIXTEEN, THE INCOME
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(I) THE PRODUCT OF FOUR PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH ONE OF SUBDIVISION (A) OF THIS SECTION,
S. 5898 7
(II) THE PRODUCT OF EIGHTY-EIGHT PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH TWO OF SUBDIVISION (A) OF THIS SECTION, AND
(III) THE PRODUCT OF EIGHT PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH THREE OF SUBDIVISION (A) OF THIS SECTION.
(I) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SEVENTEEN, THE INCOME
ALLOCATION PERCENTAGE SHALL BE DETERMINED BY ADDING TOGETHER THE FOLLOW-
ING PERCENTAGES:
(I) THE PRODUCT OF TWO PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH ONE OF SUBDIVISION (A) OF THIS SECTION,
(II) THE PRODUCT OF NINETY-FOUR PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH TWO OF SUBDIVISION (A) OF THIS SECTION, AND
(III) THE PRODUCT OF FOUR PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH THREE OF SUBDIVISION (A) OF THIS SECTION.
(J) FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND SEVENTEEN, THE
INCOME ALLOCATION PERCENTAGE SHALL BE THE PERCENTAGE DETERMINED UNDER
PARAGRAPH TWO OF SUBDIVISION (A) OF THIS SECTION.
(K) THE COMMISSIONER SHALL PROMULGATE RULES NECESSARY TO IMPLEMENT THE
PROVISIONS OF THIS PARAGRAPH UNDER SUCH CIRCUMSTANCES WHERE ANY OF THE
PERCENTAGES TO BE DETERMINED UNDER PARAGRAPH ONE, TWO OR THREE OF SUBDI-
VISION (A) OF THIS SECTION CANNOT BE DETERMINED BECAUSE THE TAXPAYER HAS
NO COMPENSATION, RECEIPTS OR DEPOSITS WITHIN OR WITHOUT THE CITY.
S 6. Subdivision 9 of section 11-601 of the administrative code of the
city of New York, as renumbered by chapter 808 of the laws of 1992, is
renumbered subdivision 14 and four new subdivisions 10, 11, 12 and 13
are added to read as follows:
10. "REIT" MEANS A REAL ESTATE INVESTMENT TRUST AS DEFINED IN SECTION
EIGHT HUNDRED FIFTY-SIX OF THE INTERNAL REVENUE CODE.
11. "RIC" MEANS A REGULATED INVESTMENT COMPANY AS DEFINED IN SECTION
EIGHT HUNDRED FIFTY-ONE OF THE INTERNAL REVENUE CODE.
12. "CAPTIVE REIT" MEANS A REIT (A) THAT IS NOT REGULARLY TRADED ON AN
ESTABLISHED SECURITIES MARKET, AND (B) MORE THAN FIFTY PERCENT OF THE
VOTING STOCK OF WHICH IS OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY
A SINGLE CORPORATION THAT IS NOT EXEMPT FROM FEDERAL INCOME TAX AND IS
NOT A REIT. ANY VOTING STOCK IN A REIT THAT IS HELD IN A SEGREGATED
ASSET ACCOUNT OF A LIFE INSURANCE CORPORATION (AS DESCRIBED IN SECTION
EIGHT HUNDRED SEVENTEEN OF THE INTERNAL REVENUE CODE) SHALL NOT BE TAKEN
INTO ACCOUNT FOR PURPOSES OF DETERMINING WHETHER A REIT IS A CAPTIVE
REIT.
13. "CAPTIVE RIC" MEANS A RIC (A) THAT IS NOT REGULARLY TRADED ON AN
ESTABLISHED SECURITIES MARKET, AND (B) MORE THAN FIFTY PERCENT OF THE
VOTING STOCK OF WHICH IS OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY
A SINGLE CORPORATION THAT IS NOT EXEMPT FROM FEDERAL INCOME TAX AND IS
NOT A RIC. ANY VOTING STOCK IN A RIC THAT IS HELD IN A SEGREGATED ASSET
ACCOUNT OF A LIFE INSURANCE CORPORATION (AS DESCRIBED IN SECTION EIGHT
HUNDRED SEVENTEEN OF THE INTERNAL REVENUE CODE) SHALL NOT BE TAKEN INTO
ACCOUNT FOR PURPOSES OF DETERMINING WHETHER A RIC IS A CAPTIVE RIC.
S 7. Paragraph (a) of subdivision 4 of section 11-603 of the adminis-
trative code of the city of New York, as amended by section 3 of part C
of chapter 93 of the laws of 2002, is amended to read as follows:
(a) Corporations subject to tax under subchapter three of this chapter
or under chapter eleven of this title, any trust company organized under
a law of this state all of the stock of which is owned by not less than
twenty savings banks organized under a law of this state, bank holding
companies filing a combined return in accordance with subdivision (f) of
section 11-646 of this chapter, A CAPTIVE REIT OR A CAPTIVE RIC FILING A
COMBINED RETURN UNDER SUBDIVISION (F) OF SECTION 11-646 OF THIS CHAPTER,
S. 5898 8
housing companies organized and operating pursuant to the provisions of
article two of the private housing finance law, housing development fund
companies organized pursuant to the provisions of article eleven of the
private housing finance law, corporations described in section three of
the tax law, a corporation principally engaged in the operation of
marine vessels whose activities in the city are limited exclusively to
the use of property in interstate or foreign commerce, provided, howev-
er, such a corporation will not be subject to tax under this subchapter
solely because it maintains an office in the city, or employs capital in
the city, in connection with such use of property, a corporation princi-
pally engaged in the conduct of a ferry business and operating between
any of the boroughs of the city under a lease granted by the city and a
corporation principally engaged in the conduct of an aviation, steam-
boat, ferry or navigation business, or two or more of such businesses,
all of the capital stock of which is owned by a municipal corporation of
this state, shall not be subject to tax under this subchapter; provided,
however, that any corporation, other than (1) a utility corporation
subject to the supervision of the state department of public service,
and (2) for taxable years beginning on or after August first, two thou-
sand two, a utility as defined in subdivision six of section 11-1101 of
this title, which is subject to tax under chapter eleven of this title
as a vendor of utility services shall be subject to tax under this
subchapter, but in computing the tax imposed by this section pursuant to
the provisions of clause one of subparagraph (a) of paragraph A of
subdivision one of section 11-604, business income allocated to the city
pursuant to paragraph (a) of subdivision three of such section shall be
reduced by the percentage which such corporation's gross operating
income subject to tax under chapter eleven of this title is of its gross
operating income.
S 8. Subdivisions 7 and 8 of section 11-603 of the administrative code
of the city of New York, as amended by chapter 525 of the laws of 1988,
are amended to read as follows:
7. For any taxable year of a real estate investment trust as defined
in section eight hundred fifty-six of the internal revenue code in which
such trust is subject to federal income taxation under section eight
hundred fifty-seven of such code, such trust shall be subject to a tax
computed under either clause one of SUBPARAGRAPH (A) OF paragraph [(a)]
A of subdivision one of section 11-604 of this subchapter with respect
to its entire net income, or clause four, whichever is greater, and
shall not be subject to any tax under subchapter three of this chapter,
EXCEPT FOR A CAPTIVE REIT REQUIRED TO FILE A COMBINED RETURN UNDER
SUBDIVISION (F) OF SECTION 11-646 OF THIS CHAPTER. In the case of such
a [trust] REAL ESTATE INVESTMENT TRUST, INCLUDING A CAPTIVE REIT AS
DEFINED IN SECTION 11-601 OF THIS CHAPTER, the term "entire net income"
means "real estate investment trust taxable income" as defined in para-
graph two of subdivision (b) of section eight hundred fifty-seven (as
modified by section eight hundred fifty-eight) of the internal revenue
code plus the amount taxable under paragraph three of subdivision (b) of
section eight hundred fifty-seven of such code, subject to the modifica-
tion required by subdivision eight of section 11-602 of this subchapter
(other than the modification required by clause two of paragraph (a) and
by paragraph (f) thereof) including the modifications required by para-
graphs (d) and (e) of subdivision three of section 11-604 of this
subchapter.
8. For any taxable year beginning on or after January first, nineteen
hundred eighty-one of a regulated investment company, as defined in
S. 5898 9
section eight hundred fifty-one of the internal revenue code, in which
such company is subject to federal income taxation under section eight
hundred fifty-two of such code, such company shall be subject to a tax
computed under clause one or four of subparagraph (a) of paragraph E of
subdivision one of section 11-604 of this subchapter, whichever is
greater, and such company shall not be subject to any tax under subchap-
ter three of this chapter, EXCEPT FOR A CAPTIVE RIC REQUIRED TO FILE A
COMBINED RETURN UNDER SUBDIVISION (F) OF SECTION 11-646 OF THIS CHAPTER.
[The] IN THE CASE OF SUCH A REGULATED INVESTMENT COMPANY, INCLUDING A
CAPTIVE RIC AS DEFINED IN SECTION 11-601 OF THIS CHAPTER, THE term
"entire net income" used in subdivision one of this section means
"investment company taxable income" as defined in paragraph two of
subdivision (b) of section eight hundred fifty-two, as modified by
section eight hundred fifty-five, of the internal revenue code plus the
amount taxable under paragraph three of subdivision (b) of section eight
hundred fifty-two of such code subject to the modifications required by
subdivision eight of section 11-602 of this subchapter, other than the
modification required by clause two of paragraph (a) and by paragraph
(f) thereof, including the modification required by paragraphs (d) and
(e) of subdivision three of section 11-604 of this subchapter.
S 9. Subdivision 4 of section 11-605 of the administrative code of the
city of New York, as amended by chapter 170 of the laws of 1994, is
amended to read as follows:
4. [In the discretion of the commissioner of finance, any] (A) ANY
taxpayer which owns or controls either directly or indirectly substan-
tially all the capital stock of one or more other corporations, or
substantially all the capital stock of which is owned or controlled
either directly or indirectly by one or more other corporations or by
interests which own or control either directly or indirectly substan-
tially all the capital stock of one or more other corporations, [may be
required or permitted to make a report on a combined basis covering any
such other corporations and setting] (HEREINAFTER REFERRED TO IN THIS
PARAGRAPH AS "RELATED CORPORATIONS"), SHALL MAKE A COMBINED REPORT
COVERING ANY RELATED CORPORATIONS IF THERE ARE SUBSTANTIAL INTERCORPO-
RATE TRANSACTIONS AMONG THE RELATED CORPORATIONS, REGARDLESS OF THE
TRANSFER PRICE FOR SUCH INTERCORPORATE TRANSACTIONS. IT IS NOT NECESSARY
THAT THERE BE SUBSTANTIAL INTERCORPORATE TRANSACTIONS BETWEEN ANY ONE
CORPORATION AND EVERY OTHER RELATED CORPORATION. IT IS NECESSARY, HOWEV-
ER, THAT THERE BE SUBSTANTIAL INTERCORPORATE TRANSACTIONS BETWEEN THE
TAXPAYER AND A RELATED CORPORATION OR, COLLECTIVELY, A GROUP OF SUCH
RELATED CORPORATIONS. THE REPORT SHALL SET forth such information as
the commissioner of finance may require[; provided, however, that no].
IN DETERMINING WHETHER THERE ARE SUBSTANTIAL INTERCORPORATE TRANS-
ACTIONS, THE COMMISSIONER SHALL CONSIDER AND EVALUATE ALL ACTIVITIES AND
TRANSACTIONS OF THE TAXPAYER AND ITS RELATED CORPORATIONS. ACTIVITIES
AND TRANSACTIONS THAT WILL BE CONSIDERED INCLUDE, BUT ARE NOT LIMITED
TO: MANUFACTURING, ACQUIRING GOODS OR PROPERTY, OR PERFORMING SERVICES,
FOR RELATED CORPORATIONS; SELLING GOODS ACQUIRED FROM RELATED CORPO-
RATIONS; FINANCING SALES OF RELATED CORPORATIONS; PERFORMING RELATED
CUSTOMER SERVICES USING COMMON FACILITIES AND EMPLOYEES FOR RELATED
CORPORATIONS; INCURRING EXPENSES THAT BENEFIT, DIRECTLY OR INDIRECTLY,
ONE OR MORE RELATED CORPORATIONS; AND TRANSFERRING ASSETS, INCLUDING
SUCH ASSETS AS ACCOUNTS RECEIVABLE, PATENTS OR TRADEMARKS FROM ONE OR
MORE RELATED CORPORATIONS.
(1) NO taxpayer may be permitted to make a report on a combined basis
covering any such other corporations where [(a)] such taxpayer or any
S. 5898 10
such other corporation allocates in accordance with clause (A) of
subparagraph six of paragraph (a) of subdivision three of section 11-604
of this subchapter and such taxpayer or any such other corporation does
not so allocate[, or (b)].
(2) NO TAXPAYER MAY BE PERMITTED TO MAKE A REPORT ON A COMBINED BASIS
COVERING ANY SUCH OTHER CORPORATIONS WHERE such taxpayer or any such
other corporation allocates in accordance with subparagraph seven of
paragraph (a) of subdivision three of section 11-604 of this subchapter
and such taxpayer or any such other corporation does not so allocate[;
provided, further that].
(3) EXCEPT AS PROVIDED IN THE FIRST UNDESIGNATED PARAGRAPH OF THIS
SUBDIVISION, no combined report covering any corporation not a taxpayer
shall be required unless the commissioner of finance deems such a report
necessary, because of inter-company transactions or some agreement,
understanding, arrangement or transaction referred to in subdivision
five of this section, in order properly to reflect the tax liability
under this subchapter [and provided, further, that a].
(4) A corporation [which elects the application of section nine
hundred thirty-six of the internal revenue code with respect to a
particular federal taxable year] ORGANIZED UNDER THE LAWS OF A COUNTRY
OTHER THAN THE UNITED STATES shall not[, in the case of a taxpayer,] be
required or permitted to make a report on a combined basis [with respect
to a taxable year under this subchapter which is the same as such feder-
al taxable year (or a portion thereof), and, in the case of a corpo-
ration which is not a taxpayer, no combined report covering such corpo-
ration with respect to such taxable year under this subchapter shall be
required or permitted].
(5)(I) FOR PURPOSES OF THIS SUBPARAGRAPH, THE TERM "CLOSEST CONTROL-
LING STOCKHOLDER" MEANS THE CORPORATION THAT INDIRECTLY OWNS OR CONTROLS
OVER FIFTY PERCENT OF THE VOTING STOCK OF A CAPTIVE REIT OR CAPTIVE RIC,
IS SUBJECT TO TAX UNDER THIS SUBCHAPTER OR OTHERWISE REQUIRED TO BE
INCLUDED IN A COMBINED REPORT UNDER THIS SUBCHAPTER, AND IS THE FEWEST
TIERS OF CORPORATIONS AWAY IN THE OWNERSHIP STRUCTURE FROM THE CAPTIVE
REIT OR CAPTIVE RIC. THE COMMISSIONER IS AUTHORIZED TO PRESCRIBE BY
REGULATION OR PUBLISHED GUIDANCE THE CRITERIA FOR DETERMINING THE CLOS-
EST CONTROLLING STOCKHOLDER.
(II) A CAPTIVE REIT OR A CAPTIVE RIC MUST BE INCLUDED IN A COMBINED
REPORT WITH THE CORPORATION THAT DIRECTLY OWNS OR CONTROLS OVER FIFTY
PERCENT OF THE VOTING STOCK OF THE CAPTIVE REIT OR CAPTIVE RIC IF THAT
CORPORATION IS SUBJECT TO TAX OR REQUIRED TO BE INCLUDED IN A COMBINED
REPORT UNDER THIS SUBCHAPTER.
(III) IF OVER FIFTY PERCENT OF THE VOTING STOCK OF A CAPTIVE REIT OR
CAPTIVE RIC IS NOT DIRECTLY OWNED OR CONTROLLED BY A CORPORATION THAT IS
SUBJECT TO TAX OR REQUIRED TO BE INCLUDED IN A COMBINED REPORT UNDER
THIS SUBCHAPTER, THEN THE CAPTIVE REIT OR CAPTIVE RIC MUST BE INCLUDED
IN A COMBINED REPORT WITH THE CORPORATION THAT IS THE CLOSEST CONTROL-
LING STOCKHOLDER OF THE CAPTIVE REIT OR CAPTIVE RIC. IF THE CLOSEST
CONTROLLING STOCKHOLDER OF THE CAPTIVE REIT OR CAPTIVE RIC IS SUBJECT TO
TAX OR OTHERWISE REQUIRED TO BE INCLUDED IN A COMBINED REPORT UNDER THIS
SUBCHAPTER, THEN THE CAPTIVE REIT OR CAPTIVE RIC MUST BE INCLUDED IN A
COMBINED REPORT UNDER THIS SUBCHAPTER.
(IV) IF THE CORPORATION THAT DIRECTLY OWNS OR CONTROLS THE VOTING
STOCK OF THE CAPTIVE REIT OR CAPTIVE RIC IS DESCRIBED IN SUBPARAGRAPH
ONE, TWO OR FOUR OF THIS PARAGRAPH AS A CORPORATION NOT PERMITTED TO
MAKE A COMBINED REPORT, THEN THE PROVISIONS IN CLAUSE (III) OF THIS
SUBPARAGRAPH MUST BE APPLIED TO DETERMINE THE CORPORATION IN WHOSE
S. 5898 11
COMBINED REPORT THE CAPTIVE REIT OR CAPTIVE RIC SHOULD BE INCLUDED. IF,
UNDER CLAUSE (III) OF THIS SUBPARAGRAPH, THE CORPORATION THAT IS THE
CLOSEST CONTROLLING STOCKHOLDER OF THE CAPTIVE REIT OR CAPTIVE RIC IS
DESCRIBED IN SUBPARAGRAPH ONE, TWO OR FOUR OF THIS PARAGRAPH AS A CORPO-
RATION NOT PERMITTED TO MAKE A COMBINED REPORT, THEN THAT CORPORATION IS
DEEMED TO NOT BE IN THE OWNERSHIP STRUCTURE OF THE CAPTIVE REIT OR
CAPTIVE RIC, AND THE CLOSEST CONTROLLING STOCKHOLDER WILL BE DETERMINED
WITHOUT REGARD TO THAT CORPORATION.
(V) IF A CAPTIVE REIT OWNS THE STOCK OF A QUALIFIED REIT SUBSIDIARY
(AS DEFINED IN PARAGRAPH TWO OF SUBSECTION (I) OF SECTION EIGHT HUNDRED
FIFTY-SIX OF THE INTERNAL REVENUE CODE), THEN THE QUALIFIED REIT SUBSID-
IARY MUST BE INCLUDED IN A COMBINED REPORT WITH THE CAPTIVE REIT.
(VI) IF A CAPTIVE REIT OR A CAPTIVE RIC IS REQUIRED UNDER THIS SUBPAR-
AGRAPH TO BE INCLUDED IN A COMBINED REPORT WITH ANOTHER CORPORATION, AND
THAT OTHER CORPORATION IS ALSO REQUIRED TO BE INCLUDED IN A COMBINED
REPORT WITH ANOTHER RELATED CORPORATION OR CORPORATIONS UNDER THIS PARA-
GRAPH, THEN THE CAPTIVE REIT OR THE CAPTIVE RIC MUST BE INCLUDED IN THAT
COMBINED REPORT WITH THOSE CORPORATIONS.
(VII) IF A CAPTIVE REIT OR A CAPTIVE RIC IS NOT REQUIRED TO BE
INCLUDED IN A COMBINED REPORT WITH ANOTHER CORPORATION UNDER CLAUSE (II)
OR (III) OF THIS SUBPARAGRAPH, OR IN A COMBINED RETURN UNDER THE
PROVISIONS OF SUBPARAGRAPH (V) OF PARAGRAPH TWO OF SUBDIVISION (F) OF
SECTION 11-646 OF THIS CHAPTER, THEN THE CAPTIVE REIT OR CAPTIVE RIC IS
SUBJECT TO THE OPENING PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS
OF SUBPARAGRAPH THREE OF THIS PARAGRAPH. THE CAPTIVE REIT OR CAPTIVE RIC
MUST BE INCLUDED IN A COMBINED REPORT UNDER THIS SUBCHAPTER WITH ANOTHER
CORPORATION IF EITHER THE SUBSTANTIAL INTERCORPORATE TRANSACTIONS
REQUIREMENT IN THE OPENING PROVISIONS OF THIS PARAGRAPH OR THE
INTER-COMPANY TRANSACTIONS OR AGREEMENT, UNDERSTANDING, ARRANGEMENT OR
TRANSACTION REQUIREMENT OF SUBPARAGRAPH THREE OF THIS PARAGRAPH IS
SATISFIED AND MORE THAN FIFTY PERCENT OF THE VOTING STOCK OF THE CAPTIVE
REIT OR THE CAPTIVE RIC AND SUBSTANTIALLY ALL OF THE CAPITAL STOCK OF
THAT OTHER CORPORATION ARE OWNED AND CONTROLLED, DIRECTLY OR INDIRECTLY,
BY THE SAME CORPORATION.
(B)(1)(I) In the case of a combined report the tax shall be measured
by the combined entire net income or combined capital[,] of all the
corporations included in the report, INCLUDING ANY CAPTIVE REIT OR
CAPTIVE RIC; provided, however, in no event shall the tax measured by
combined capital exceed the limitation provided for in paragraph F of
subdivision one of section 11-604 of this subchapter.
(II) IN THE CASE OF A CAPTIVE REIT OR CAPTIVE RIC REQUIRED UNDER THIS
SUBDIVISION TO BE INCLUDED IN A COMBINED REPORT, ENTIRE NET INCOME MUST
BE COMPUTED AS REQUIRED UNDER SUBDIVISION SEVEN (IN THE CASE OF A
CAPTIVE REIT) OR SUBDIVISION EIGHT (IN THE CASE OF A CAPTIVE RIC) OF
SECTION 11-603 OF THIS CHAPTER. HOWEVER, THE DEDUCTION UNDER THE INTER-
NAL REVENUE CODE FOR DIVIDENDS PAID BY THE CAPTIVE REIT OR CAPTIVE RIC
TO ANY MEMBER OF THE AFFILIATED GROUP THAT INCLUDES THE CORPORATION THAT
DIRECTLY OR INDIRECTLY OWNS OVER FIFTY PERCENT OF THE VOTING STOCK OF
THE CAPTIVE REIT OR CAPTIVE RIC SHALL NOT BE ALLOWED FOR TAXABLE YEARS
BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND NINE. THE TERM "AFFIL-
IATED GROUP" MEANS "AFFILIATED GROUP" AS DEFINED IN SECTION FIFTEEN
HUNDRED FOUR OF THE INTERNAL REVENUE CODE, BUT WITHOUT REGARD TO THE
EXCEPTIONS PROVIDED FOR IN SUBSECTION (B) OF THAT SECTION.
(2) In computing combined entire net income intercorporate dividends
shall be eliminated, in computing combined business and investment capi-
tal intercorporate stock holdings and intercorporate bills, notes and
S. 5898 12
accounts receivable and payable and other intercorporate indebtedness
shall be eliminated and in computing combined subsidiary capital inter-
corporate stockholdings shall be eliminated.
S 10. Subdivision (d) of section 11-640 of the administrative code of
the city of New York, as amended by chapter 298 of the laws of 1985, is
amended to read as follows:
(d) Corporations taxable under subchapter two. Notwithstanding the
provisions of this part, all corporations of classes now or heretofore
taxable under subchapter two of this chapter shall continue to be taxa-
ble under subchapter two, except: (1) corporations organized under arti-
cle five-a of the banking law; (2) corporations subject to article
three-A of the banking law, or registered under the federal bank holding
company act of nineteen hundred fifty-six, as amended, or registered as
a savings and loan holding company (but excluding a diversified savings
and loan holding company) under the federal national housing act, as
amended, which make a combined return under the provisions of subdivi-
sion (f) of section 11-646; [and] (3) banking corporations described in
paragraph nine of subdivision (a) of section 11-640; AND (4) ANY CAPTIVE
REIT OR CAPTIVE RIC THAT IS REQUIRED TO BE INCLUDED IN A COMBINED RETURN
UNDER THE PROVISIONS OF SECTION 11-646 OF THIS SUBCHAPTER. Provided,
however, that a corporation described in paragraph three of this subdi-
vision which was subject to the tax imposed by subchapter two of this
chapter for its taxable year ending during nineteen hundred eighty-four
may, on or before the due date for filing its return (determined with
regard to extensions) for its taxable year ending during nineteen
hundred eighty-five, make a one time election to continue to be taxable
under such subchapter two. Such election shall continue to be in effect
until revoked by the taxpayer. In no event shall such election or revo-
cation be for a part of a taxable year.
S 11. Subdivision (g) of section 11-640 of the administrative code of
the city of New York is amended by adding a new paragraph 4 to read as
follows:
(4) THE PROVISIONS OF THIS SUBDIVISION SHALL NOT APPLY TO A CAPTIVE
REIT OR A CAPTIVE RIC.
S 12. Subparagraph (ii) of paragraph 11 of subdivision (e) of section
11-641 of the administrative code of the city of New York, as amended by
chapter 170 of the laws of 1994, is amended to read as follows:
(ii) sixty percent of dividend income from subsidiary capital, EXCEPT
AS PROVIDED IN PARAGRAPH 16 OF THIS SUBDIVISION, and
S 13. Subdivision (e) of section 11-641 of the administrative code of
the city of New York is amended by adding a new paragraph 16 to read as
follows:
(16) ONE HUNDRED PERCENT OF DIVIDEND INCOME FROM SUBSIDIARY CAPITAL
RECEIVED DURING THE TAXABLE YEAR IF THAT DIVIDEND INCOME IS DIRECTLY
ATTRIBUTABLE TO A DIVIDEND FROM A CAPTIVE REIT OR CAPTIVE RIC FOR WHICH
THE CAPTIVE REIT OR CAPTIVE RIC CLAIMED A FEDERAL DIVIDENDS PAID
DEDUCTION AND THAT CAPTIVE REIT OR CAPTIVE RIC IS INCLUDED IN A COMBINED
REPORT OR RETURN UNDER SUBCHAPTER TWO OR PART FOUR OF SUBCHAPTER THREE
OF THIS CHAPTER.
S 14. Paragraph 2 of subdivision (f) of section 11-646 of the adminis-
trative code of the city of New York is amended by adding a new subpara-
graph (iv) to read as follows:
(IV)(A) FOR PURPOSES OF THIS SUBPARAGRAPH, THE TERM "CLOSEST CONTROL-
LING STOCKHOLDER" MEANS THE CORPORATION THAT INDIRECTLY OWNS OR CONTROLS
OVER FIFTY PERCENT OF THE VOTING STOCK OF A CAPTIVE REIT OR CAPTIVE RIC,
IS SUBJECT TO TAX UNDER THIS SUBCHAPTER OR OTHERWISE REQUIRED TO BE
S. 5898 13
INCLUDED IN A COMBINED RETURN UNDER THIS CHAPTER AND IS THE FEWEST TIERS
OF CORPORATIONS AWAY IN THE OWNERSHIP STRUCTURE FROM THE CAPTIVE REIT OR
CAPTIVE RIC. THE COMMISSIONER IS AUTHORIZED TO PRESCRIBE BY REGULATION
OR PUBLISHED GUIDANCE THE CRITERIA FOR DETERMINING THE CLOSEST CONTROL-
LING STOCKHOLDER.
(B) A CAPTIVE REIT OR A CAPTIVE RIC MUST BE INCLUDED IN A COMBINED
RETURN WITH THE BANKING CORPORATION OR BANK HOLDING COMPANY THAT DIRECT-
LY OWNS OR CONTROLS OVER FIFTY PERCENT OF THE VOTING STOCK OF THE
CAPTIVE REIT OR CAPTIVE RIC IF THAT BANKING CORPORATION OR BANK HOLDING
COMPANY IS SUBJECT TO TAX OR REQUIRED TO BE INCLUDED IN A COMBINED
RETURN UNDER THIS SUBCHAPTER.
(C) IF OVER FIFTY PERCENT OF THE VOTING STOCK OF A CAPTIVE REIT OR
CAPTIVE RIC IS NOT DIRECTLY OWNED OR CONTROLLED BY A BANKING CORPORATION
OR BANK HOLDING COMPANY THAT IS SUBJECT TO TAX OR REQUIRED TO BE
INCLUDED IN A COMBINED RETURN UNDER THIS SUBCHAPTER, THEN THE CAPTIVE
REIT OR CAPTIVE RIC MUST BE INCLUDED IN A COMBINED RETURN WITH THE
CORPORATION THAT IS THE CLOSEST CONTROLLING STOCKHOLDER OF THE CAPTIVE
REIT OR CAPTIVE RIC. IF THE CLOSEST CONTROLLING STOCKHOLDER OF THE
CAPTIVE REIT OR CAPTIVE RIC IS A BANKING CORPORATION OR BANK HOLDING
COMPANY THAT IS SUBJECT TO TAX OR OTHERWISE REQUIRED TO BE INCLUDED IN A
COMBINED RETURN UNDER THIS SUBCHAPTER, THEN THE CAPTIVE REIT OR CAPTIVE
RIC MUST BE INCLUDED IN A COMBINED RETURN UNDER THIS SUBCHAPTER.
(D) IF THE CORPORATION WHICH DIRECTLY OWNS OR CONTROLS THE VOTING
STOCK OF THE CAPTIVE REIT OR CAPTIVE RIC IS DESCRIBED IN SUBPARAGRAPH
(II) OF PARAGRAPH FOUR OF THIS SUBDIVISION AS A CORPORATION NOT PERMIT-
TED TO MAKE A COMBINED RETURN, THEN THE PROVISIONS IN CLAUSE (C) OF THIS
SUBPARAGRAPH MUST BE APPLIED TO DETERMINE THE CORPORATION IN WHOSE
COMBINED RETURN THE CAPTIVE REIT OR CAPTIVE RIC SHOULD BE INCLUDED. IF,
UNDER CLAUSE (C) OF THIS SUBPARAGRAPH, THE CORPORATION THAT IS THE CLOS-
EST CONTROLLING STOCKHOLDER OF THE CAPTIVE REIT OR CAPTIVE RIC IS
DESCRIBED IN SUBPARAGRAPH (II) OR (IV) OF PARAGRAPH FOUR OF THIS SUBDI-
VISION AS A CORPORATION NOT PERMITTED TO MAKE A COMBINED RETURN, THEN
THAT CORPORATION IS DEEMED TO NOT BE IN THE OWNERSHIP STRUCTURE OF THE
CAPTIVE REIT OR CAPTIVE RIC, AND THE CLOSEST CONTROLLING STOCKHOLDER
WILL BE DETERMINED WITHOUT REGARD TO THAT CORPORATION.
(E) IF A CAPTIVE REIT OWNS THE STOCK OF A QUALIFIED REIT SUBSIDIARY
(AS DEFINED IN PARAGRAPH TWO OF SUBSECTION (I) OF SECTION EIGHT HUNDRED
FIFTY-SIX OF THE INTERNAL REVENUE CODE), THEN THE QUALIFIED REIT SUBSID-
IARY MUST BE INCLUDED IN ANY COMBINED RETURN REQUIRED TO BE MADE BY THE
CAPTIVE REIT THAT OWNS ITS STOCK.
(F) IF A CAPTIVE REIT OR A CAPTIVE RIC IS REQUIRED UNDER THIS SUBPARA-
GRAPH TO BE INCLUDED IN A COMBINED RETURN WITH ANOTHER CORPORATION, AND
THAT OTHER CORPORATION IS REQUIRED TO BE INCLUDED IN A COMBINED RETURN
WITH ANOTHER CORPORATION UNDER OTHER PROVISIONS OF THIS SUBDIVISION, THE
CAPTIVE REIT OR CAPTIVE RIC MUST BE INCLUDED IN THAT COMBINED RETURN
WITH THOSE CORPORATIONS.
(G) IF THE BANKING CORPORATION OR BANK HOLDING COMPANY THAT DIRECTLY
OR INDIRECTLY OWNS OR CONTROLS OVER FIFTY PERCENT OF THE VOTING STOCK OF
THE CAPTIVE REIT OR CAPTIVE RIC AND IS THE CLOSEST CONTROLLING STOCK-
HOLDER OF THE CAPTIVE REIT OR CAPTIVE RIC IS A MEMBER OF AN AFFILIATED
GROUP (1) THAT DOES NOT INCLUDE ANY CORPORATION THAT IS ENGAGED IN A
BUSINESS THAT A SUBSIDIARY OF A BANK HOLDING COMPANY WOULD NOT BE
PERMITTED TO ENGAGE IN, UNLESS SUCH BUSINESS IS DE MINIMIS, AND (2)
WHOSE MEMBERS OWN ASSETS THE COMBINED AVERAGE VALUE OF WHICH DOES NOT
EXCEED EIGHT BILLION DOLLARS, THEN THE CAPTIVE REIT OR CAPTIVE RIC MUST
NOT BE INCLUDED IN A COMBINED RETURN UNDER THIS SUBCHAPTER. IN THAT
S. 5898 14
INSTANCE, THE CAPTIVE REIT OR CAPTIVE RIC IS SUBJECT TO THE PROVISIONS
OF SUBDIVISION SEVEN OR EIGHT OF SECTION 11-603 OF THIS CHAPTER. THE
TERM "AFFILIATED GROUP" MEANS "AFFILIATED GROUP" AS DEFINED IN SECTION
FIFTEEN HUNDRED FOUR OF THE INTERNAL REVENUE CODE, BUT WITHOUT REGARD TO
THE EXCEPTIONS PROVIDED FOR IN SUBSECTION (B) OF THAT SECTION.
S 15. Paragraph 3 of subdivision (f) of section 11-646 of the adminis-
trative code of the city of New York, as added by chapter 298 of the
laws of 1985, is amended to read as follows:
(3) (I) In the case of a combined return, the tax shall be measured by
the combined entire net income, combined alternative entire net income
or combined assets of all the corporations included in the return,
INCLUDING ANY CAPTIVE REIT OR CAPTIVE RIC. The allocation percentage
shall be computed based on the combined factors with respect to all the
corporations included in the combined return. In computing combined
entire net income and alternative entire net income, intercorporate
dividends and all other intercorporate transactions shall be eliminated,
and in computing combined assets, intercorporate stockholdings and
intercorporate bills, notes and accounts receivable and payable and
other intercorporate indebtedness shall be eliminated.
(II) IN THE CASE OF A CAPTIVE REIT REQUIRED UNDER THIS SUBDIVISION TO
BE INCLUDED IN A COMBINED RETURN, "ENTIRE NET INCOME" MEANS "REAL ESTATE
INVESTMENT TRUST TAXABLE INCOME" AS DEFINED IN PARAGRAPH TWO OF SUBDIVI-
SION (B) OF SECTION EIGHT HUNDRED FIFTY-SEVEN (AS MODIFIED BY SECTION
EIGHT HUNDRED FIFTY-EIGHT) OF THE INTERNAL REVENUE CODE, PLUS THE AMOUNT
TAXABLE UNDER PARAGRAPH THREE OF SUBDIVISION (B) OF SECTION EIGHT
HUNDRED FIFTY-SEVEN OF THAT CODE, SUBJECT TO THE MODIFICATIONS REQUIRED
BY SECTION 11-641 OF THIS CHAPTER. IN THE CASE OF A CAPTIVE RIC REQUIRED
UNDER THIS SUBDIVISION TO BE INCLUDED IN A COMBINED RETURN, "ENTIRE NET
INCOME" MEANS "INVESTMENT COMPANY TAXABLE INCOME" AS DEFINED IN PARA-
GRAPH TWO OF SUBDIVISION (B) OF SECTION EIGHT HUNDRED FIFTY-TWO (AS
MODIFIED BY SECTION EIGHT HUNDRED FIFTY-FIVE) OF THE INTERNAL REVENUE
CODE, PLUS THE AMOUNT TAXABLE UNDER PARAGRAPH THREE OF SUBDIVISION (B)
OF SECTION EIGHT HUNDRED FIFTY-TWO OF THAT CODE, SUBJECT TO THE MODIFI-
CATIONS REQUIRED BY SECTION 11-641 OF THIS CHAPTER. HOWEVER, THE
DEDUCTION UNDER THE INTERNAL REVENUE CODE FOR DIVIDENDS PAID BY THE
CAPTIVE REIT OR CAPTIVE RIC TO ANY MEMBER OF THE AFFILIATED GROUP THAT
INCLUDES THE CORPORATION THAT DIRECTLY OR INDIRECTLY OWNS OVER FIFTY
PERCENT OF THE VOTING STOCK OF THE CAPTIVE REIT OR CAPTIVE RIC SHALL BE
LIMITED TO TWENTY-FIVE PERCENT FOR TAXABLE YEARS BEGINNING ON OR AFTER
JANUARY FIRST, TWO THOUSAND NINE AND BEFORE JANUARY FIRST, TWO THOUSAND
ELEVEN AND SHALL NOT BE ALLOWED FOR TAXABLE YEARS BEGINNING ON OR AFTER
JANUARY FIRST, TWO THOUSAND ELEVEN. THE TERM "AFFILIATED GROUP" MEANS
"AFFILIATED GROUP" AS DEFINED IN SECTION FIFTEEN HUNDRED FOUR OF THE
INTERNAL REVENUE CODE, BUT WITHOUT REGARD TO THE EXCEPTIONS PROVIDED FOR
IN SUBSECTION (B) OF THAT SECTION.
S 16. Paragraph F of subdivision 1 of section 11-604 of the adminis-
trative code of the city of New York, as added by chapter 525 of the
laws of 1988, is amended to read as follows:
S 16. Paragraph F of subdivision 1 of section 11-604 of the adminis-
trative code of the city of New York, as added by chapter 525 of the
laws of 1988, is amended to read as follows:
F. Notwithstanding any other provision of this subdivision to the
contrary, for taxable years beginning after nineteen hundred eighty-sev-
en AND BEFORE TWO THOUSAND NINE the amount of tax computed on the basis
of the taxpayer's total business and investment capital, or the portion
thereof allocated within the city, shall in no event exceed three
S. 5898 15
hundred fifty thousand dollars AND FOR TAXABLE YEARS BEGINNING AFTER TWO
THOUSAND EIGHT THE AMOUNT OF TAX COMPUTED ON THE BASIS OF THE TAXPAYER'S
TOTAL BUSINESS AND INVESTMENT CAPITAL, OR THE PORTION THEREOF ALLOCATED
WITHIN THE CITY, SHALL IN NO EVENT EXCEED ONE MILLION DOLLARS.
S 17. Clause 4 of subparagraph (a) of paragraph E of subdivision 1 of
section 11-604 of the administrative code of the city of New York, as
amended by chapter 525 of the laws of 2008, is amended to read as
follows:
(4) for taxable years ending on or before June thirtieth, nineteen
hundred eighty-nine, one hundred twenty-five dollars [and], for taxable
years ending after June thirtieth, nineteen hundred eighty-nine AND
BEGINNING BEFORE TWO THOUSAND NINE, three hundred dollars, AND FOR TAXA-
BLE YEARS BEGINNING AFTER TWO THOUSAND EIGHT:
IF NEW YORK CITY FIXED DOLLAR
RECEIPTS ARE: MINIMUM TAX IS:
NOT MORE THAN $100,000 $25
MORE THAN $100,000 BUT NOT OVER $250,000 $75
MORE THAN $250,000 BUT NOT OVER $500,000 $175
MORE THAN $500,000 BUT NOT OVER $1,000,000 $500
MORE THAN $1,000,000 BUT NOT OVER $5,000,000 $1,500
MORE THAN $5,000,000 BUT NOT OVER $25,000,000 $3,500
OVER $25,000,000 $5,000
FOR PURPOSES OF THIS CLAUSE, NEW YORK CITY RECEIPTS ARE THE RECEIPTS
COMPUTED IN ACCORDANCE WITH SUBPARAGRAPH TWO OF PARAGRAPH (A) OF SUBDI-
VISION THREE OF THIS SECTION FOR THE TAXABLE YEAR. FOR TAXABLE YEARS
BEGINNING AFTER TWO THOUSAND EIGHT, IF THE TAXABLE YEAR IS LESS THAN
TWELVE MONTHS, THE AMOUNT PRESCRIBED BY THIS CLAUSE SHALL BE REDUCED BY
TWENTY-FIVE PERCENT IF THE PERIOD FOR WHICH THE TAXPAYER IS SUBJECT TO
TAX IS MORE THAN SIX MONTHS BUT NOT MORE THAN NINE MONTHS AND BY FIFTY
PERCENT IF THE PERIOD FOR WHICH THE TAXPAYER IS SUBJECT TO TAX IS NOT
MORE THAN SIX MONTHS. IF THE TAXABLE YEAR IS LESS THAN TWELVE MONTHS,
THE AMOUNT OF NEW YORK CITY RECEIPTS FOR PURPOSES OF THIS CLAUSE IS
DETERMINED BY DIVIDING THE AMOUNT OF THE RECEIPTS FOR THE TAXABLE YEAR
BY THE NUMBER OF MONTHS IN THE TAXABLE YEAR AND MULTIPLYING THE RESULT
BY TWELVE, plus;
S 18. Subdivision (b) of section 11-643.5 of the administrative code
of the city of New York, as added by local law number 37 of the city of
New York for the year 1986, subparagraph (ii) of paragraph 1 and para-
graph 2 as amended by chapter 525 of the laws of 1988, is amended to
read as follows:
(b) Alternative minimum tax. If the tax under subdivision (a) of this
section is less than any of the following amounts, the tax shall be the
larger of the following amounts:
(1) [(i) Except] FOR TAXABLE YEARS BEGINNING BEFORE TWO THOUSAND ELEV-
EN, EXCEPT in the case of a corporation organized under the laws of a
country other than the United States, one-tenth of a mill upon each
dollar of taxable assets, or the portion thereof allocated to the city.
FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND TEN, EXCEPT IN THE CASE
OF A TAXPAYER DESCRIBED IN CLAUSE (I), (II), OR (III) BELOW, ONE-TENTH
OF A MILL UPON EACH DOLLAR OF TAXABLE ASSETS, OR THE PORTION THEREOF
ALLOCATED TO THE CITY.
(I) IN THE CASE OF A TAXPAYER WHOSE NET WORTH RATIO IS LESS THAN FIVE
PERCENT BUT GREATER THAN OR EQUAL TO FOUR PERCENT AND WHOSE TOTAL ASSETS
ARE COMPRISED OF THIRTY-THREE PERCENT OR MORE OF MORTGAGES, ONE-TWENTY-
FIFTH OF A MILL UPON EACH DOLLAR OF TAXABLE ASSETS, OR THE PORTION THER-
EOF ALLOCATED TO THE CITY.
S. 5898 16
(II) IN THE CASE OF A TAXPAYER WHOSE NET WORTH RATIO IS LESS THAN FOUR
PERCENT AND WHOSE TOTAL ASSETS ARE COMPRISED OF THIRTY-THREE PERCENT OR
MORE OF MORTGAGES, ONE-FIFTIETH OF A MILL UPON EACH DOLLAR OF TAXABLE
ASSETS, OR THE PORTION THEREOF ALLOCATED TO THE CITY.
(III) A TAXPAYER (WHETHER OR NOT A QUALIFIED INSTITUTION AS DEFINED IN
SUBPARAGRAPH (B) OF PARAGRAPH FIVE OF SUBSECTION (F) OF SECTION FOUR
HUNDRED SIX OF THE FEDERAL NATIONAL HOUSING ACT, AS AMENDED, OR AS
DEFINED IN PARAGRAPH TWO OF SUBSECTION (I) OF SECTION THIRTEEN OF THE
FEDERAL DEPOSIT INSURANCE ACT, AS AMENDED) SHALL NOT BE SUBJECT TO THE
PROVISIONS OF THIS PARAGRAPH FOR THAT PORTION OF THE TAXABLE YEAR IN
WHICH IT HAD OUTSTANDING NET WORTH CERTIFICATES ISSUED IN ACCORDANCE
WITH PARAGRAPH FIVE OF SUBSECTION (F) OF SECTION FOUR HUNDRED SIX OF THE
FEDERAL NATIONAL HOUSING ACT, AS AMENDED, OR ISSUED IN ACCORDANCE WITH
SUBSECTION (I) OF SECTION THIRTEEN OF THE FEDERAL DEPOSIT INSURANCE ACT,
AS AMENDED.
[(ii)] (IV) For the purposes of this part[,]: (A) the term "taxable
assets" shall mean the average value of total assets reduced by any
amount of money or other property received from or attributable to
amounts received from the federal deposit insurance corporation pursuant
to subsection (c) of section thirteen of the federal deposit insurance
act, as amended, or the federal savings and loan insurance corporation
pursuant to paragraph one, two, three or four of subsection (f) of
section four hundred six of the federal national housing act, as
amended. Total assets are those assets which are properly reflected on a
balance sheet the income or expenses of which are properly reflected (or
would have been properly reflected if not fully depreciated or expensed
or depreciated or expensed to a nominal amount) in the computation of
alternative entire net income for the taxable year or in the computation
of the eligible net income of the taxpayer's international banking
facility for the taxable year.
[(iii) A taxpayer shall not be subject to the provisions of this para-
graph for that portion of the taxable year (A) in which it was a "quali-
fied institution" as defined in subparagraph (B) of paragraph five of
subsection (f) of section four hundred six of the federal national hous-
ing act, as amended, or as defined in paragraph two of subsection (i) of
section thirteen of the federal deposit insurance act, as amended, and
(B) in which it had outstanding net worth certificates issued in accord-
ance with such paragraph five or issued in accordance with such
subsection (i) provided it would have been exempt from any tax deter-
mined on the basis of the deposits held by it or the interest paid on
such deposits pursuant to subparagraph (I) of such paragraph five or
paragraph nine of such subsection (i).]
(B) THE TERM "NET WORTH RATIO" SHALL MEAN THE PERCENTAGE OF NET WORTH
TO ASSETS ON THE LAST DAY OF THE TAXABLE YEAR. THE TERM "NET WORTH"
MEANS THE SUM OF PREFERRED STOCK, COMMON STOCK, SURPLUS, CAPITAL
RESERVES, UNDIVIDED PROFITS, MUTUAL CAPITAL CERTIFICATES, RESERVE FOR
CONTINGENCIES, RESERVE FOR LOAN LOSSES AND RESERVE FOR SECURITY LOSSES
MINUS ASSETS CLASSIFIED LOSS. THE TERM "ASSETS" MEANS THE SUM OF MORT-
GAGE LOANS, NONMORTGAGE LOANS, REPOSSESSED ASSETS, REAL ESTATE HELD FOR
DEVELOPMENT OR INVESTMENT OR RESALE, CASH, DEPOSITS, INVESTMENT SECURI-
TIES, FIXED ASSETS AND OTHER ASSETS (SUCH AS FINANCIAL FUTURES, GOODWILL
AND OTHER INTANGIBLE ASSETS) MINUS ASSETS CLASSIFIED LOSS. IN NO EVENT
SHALL ASSETS BE REDUCED BY RESERVES FOR LOSSES.
(C) THE TERM "MORTGAGES" SHALL MEAN LOANS SECURED BY REAL PROPERTY
WITHIN OR WITHOUT THE STATE, PARTICIPATIONS IN AND SECURITIES COLLATER-
ALIZED BY POOLS OF RESIDENTIAL MORTGAGES, WHETHER OR NOT ISSUED OR GUAR-
S. 5898 17
ANTEED BY A UNITED STATES GOVERNMENT AGENCY, AND LOANS SECURED BY STOCK
IN A COOPERATIVE HOUSING CORPORATION. THE PERCENTAGE OF TOTAL ASSETS
COMPRISED OF MORTGAGES SHALL BE AN AMOUNT EQUAL TO THE RATIO OF THE
AVERAGE OF THE FOUR QUARTERLY BALANCES OF SUCH MORTGAGES ENDING WITHIN
THE TAXABLE YEAR, TO THE AVERAGE OF THE FOUR QUARTERLY BALANCES OF ALL
ASSETS ENDING WITHIN THE TAXABLE YEAR. SUCH QUARTERLY BALANCES SHALL BE
COMPUTED IN THE SAME MANNER AS THE REPORT OF CONDITION REQUIRED FOR
FEDERAL DEPOSIT INSURANCE CORPORATION OR FEDERAL SAVINGS AND LOAN INSUR-
ANCE CORPORATION PURPOSES, WHETHER OR NOT SUCH REPORT IS REQUIRED. FOR
TAXABLE PERIODS OF LESS THAN ONE YEAR, THE TAXPAYER SHALL COMPUTE SUCH
RATIO USING THE NUMBER OF SUCH QUARTERLY BALANCES ENDING WITHIN SUCH
TAXABLE PERIOD.
(2) FOR TAXABLE YEARS BEGINNING BEFORE TWO THOUSAND ELEVEN, [In] IN
the case of a corporation organized under the laws of a country other
than the United States, (i) two and six-tenths mills upon each dollar of
such part of the taxpayer's issued capital stock on the last day of the
taxable year, at its face value, but if such taxpayer has stock without
par value, such stock shall be taken at its actual or market value, and
not less than five dollars per share, as may be determined by the
commissioner of finance, or (ii) if the taxpayer does not have issued
capital stock, two and six-tenths mills upon each dollar of such part of
the amount by which its average total assets exceeds its average total
liabilities, as the gross income of such taxpayer derived from business
carried on within the city during such taxable year bears to its gross
income derived from all business, both within and without the city
during said year; except that if the period covered by the return is
other than twelve months, the tax shall be prorated on the basis of the
number of months or major portions thereof included in the return. For
purposes of this paragraph, the term "gross income" shall have the same
meaning as it has in the laws of the United States relating to federal
income taxes.
(3) Three percent of the taxpayer's alternative entire net income, or
portion thereof allocated to the city, for the taxable year, or part
thereof.
(4) One hundred twenty-five dollars.
S 19. Paragraph 3 of subdivision (b) of section 11-641 of the adminis-
trative code of the city of New York is REPEALED.
S 20. Section 11-641 of the administrative code of the city of New
York is amended by adding a new subdivision (k-1) to read as follows:
(K-1) A NET OPERATING LOSS DEDUCTION SHALL BE ALLOWED WHICH SHALL BE
PRESUMABLY THE SAME AS THE NET OPERATING LOSS DEDUCTION ALLOWED UNDER
SECTION ONE HUNDRED SEVENTY-TWO OF THE INTERNAL REVENUE CODE, EXCEPT
THAT IN EVERY INSTANCE WHERE SUCH DEDUCTION IS ALLOWED UNDER THIS
SUBCHAPTER:
(1) ANY NET OPERATING LOSS INCLUDED IN DETERMINING SUCH DEDUCTION
SHALL BE ADJUSTED TO REFLECT THE INCLUSIONS AND EXCLUSIONS FROM ENTIRE
NET INCOME REQUIRED BY THE OTHER PROVISIONS OF THIS SECTION;
(2) SUCH DEDUCTION SHALL NOT INCLUDE ANY NET OPERATING LOSS SUSTAINED
DURING ANY TAXABLE YEAR BEGINNING PRIOR TO JANUARY FIRST, TWO THOUSAND
NINE, OR DURING ANY TAXABLE YEAR IN WHICH THE TAXPAYER WAS NOT SUBJECT
TO THE TAX IMPOSED BY THIS SUBCHAPTER;
(3) SUCH DEDUCTION SHALL NOT EXCEED THE DEDUCTION FOR THE TAXABLE YEAR
ALLOWED UNDER SECTION ONE HUNDRED SEVENTY-TWO OF THE INTERNAL REVENUE
CODE AUGMENTED BY THE EXCESS OF THE AMOUNT ALLOWED AS A DEDUCTION PURSU-
ANT TO SUBDIVISION (H) OR (I) OF THIS SECTION, WHICHEVER IS APPLICABLE,
OVER THE AMOUNT ALLOWED AS A DEDUCTION PURSUANT TO SECTION ONE HUNDRED
S. 5898 18
SIXTY-SIX OR FIVE HUNDRED EIGHTY-FIVE OF THE INTERNAL REVENUE CODE, FOR
EACH TAXABLE YEAR IN WHICH THE TAXPAYER HAD A NET OPERATING LOSS WHICH
IS CARRIED TO THE TAXABLE YEAR OF THE DEDUCTION UNDER THIS PROVISION, IN
THE AGGREGATE, (EXCEPT TO THE EXTENT SUCH EXCESS WAS PREVIOUSLY DEDUCTED
IN COMPUTING ENTIRE NET INCOME); AND
(4) THE NET OPERATING LOSS DEDUCTION ALLOWED UNDER SECTION ONE HUNDRED
SEVENTY-TWO OF THE INTERNAL REVENUE CODE SHALL FOR PURPOSES OF THIS
SUBDIVISION BE DETERMINED AS IF THE TAXPAYER HAD ELECTED UNDER SUCH
SECTION TO RELINQUISH THE ENTIRE CARRYBACK PERIOD WITH RESPECT TO NET
OPERATING LOSSES.
S 21. Section 11-639 of the administrative code of the city of New
York is amended by adding a new subdivision (c) to read as follows:
(C) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND ELEVEN, (1) A BANKING CORPORATION IS DOING BUSINESS IN THE CITY IN
A CORPORATE OR ORGANIZED CAPACITY IF (I) IT HAS ISSUED CREDIT CARDS TO
ONE THOUSAND OR MORE CUSTOMERS WHO HAVE A MAILING ADDRESS WITHIN THE
CITY AS OF THE LAST DAY OF ITS TAXABLE YEAR, OR (II) IT HAS MERCHANT
CUSTOMER CONTRACTS WITH MERCHANTS AND THE TOTAL NUMBER OF LOCATIONS
COVERED BY THOSE CONTRACTS EQUALS ONE THOUSAND OR MORE LOCATIONS IN THE
CITY TO WHOM THE BANKING CORPORATION REMITTED PAYMENTS FOR CREDIT CARD
TRANSACTIONS DURING THE TAXABLE YEAR, OR (III) IT HAS RECEIPTS OF ONE
MILLION DOLLARS OR MORE IN THE TAXABLE YEAR FROM ITS CUSTOMERS WHO HAVE
BEEN ISSUED CREDIT CARDS BY THE BANKING CORPORATION AND HAVE A MAILING
ADDRESS WITHIN THE CITY, OR (IV) IT HAS RECEIPTS OF ONE MILLION DOLLARS
OR MORE ARISING FROM MERCHANT CUSTOMER CONTRACTS WITH MERCHANTS RELATING
TO LOCATIONS IN THE CITY, OR (V) THE SUM OF THE NUMBER OF CUSTOMERS
DESCRIBED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH PLUS THE NUMBER OF
LOCATIONS COVERED BY ITS CONTRACTS DESCRIBED IN SUBPARAGRAPH (II) OF
THIS PARAGRAPH EQUALS ONE THOUSAND OR MORE, OR THE AMOUNT OF ITS
RECEIPTS DESCRIBED IN SUBPARAGRAPHS (III) AND (IV) OF THIS PARAGRAPH
EQUALS ONE MILLION DOLLARS OR MORE. FOR PURPOSES OF THIS PARAGRAPH,
RECEIPTS FROM PROCESSING CREDIT CARD TRANSACTIONS FOR MERCHANTS INCLUDE
MERCHANT DISCOUNT FEES RECEIVED BY THE BANKING CORPORATION.
(2) AS USED IN THIS SUBDIVISION, THE TERM "CREDIT CARD" INCLUDES BANK,
CREDIT, TRAVEL AND ENTERTAINMENT CARDS.
S 22. Subparagraph (D) of paragraph 2 of subdivision (a) of section
11-642 of the administrative code of the city of New York, as added by
chapter 298 of the laws of 1985, is amended to read as follows:
(D) (i) Interest, and fees and penalties in the nature of interest,
from bank, CREDIT, travel and entertainment card receivables are earned
within the city if the MAILING ADDRESS OF THE card [holder's domicile]
HOLDER IN THE RECORDS OF THE TAXPAYER is in the city[,]; and
(ii) Service charges and fees from such cards are earned within the
city if the card is serviced in the city; and
(iii) Receipts from merchant discounts are earned within the city if
the merchant is located within the city.
S 23. Paragraph 2 of subdivision (f) of section 11-646 of the adminis-
trative code of the city of New York is amended by adding a new subpara-
graph (v) to read as follows:
(V) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST TWO THOUSAND
ELEVEN, A BANKING CORPORATION DOING BUSINESS IN THE CITY SOLELY BECAUSE
IT MEETS ONE OR MORE OF THE TESTS IN SUBPARAGRAPHS (I) THROUGH (V) OF
PARAGRAPH ONE OF SUBDIVISION (C) OF SECTION 11-639 OF THIS CHAPTER
(REFERRED TO IN THIS SUBPARAGRAPH AS THE "CREDIT CARD BANK") WILL NOT BE
INCLUDED IN A COMBINED RETURN PURSUANT TO SUBPARAGRAPH (I) OF THIS PARA-
GRAPH WITH ANOTHER BANKING CORPORATION OR BANK HOLDING COMPANY WHICH IS
S. 5898 19
DOING BUSINESS IN THE CITY UNLESS THE CREDIT CARD BANK OR THE COMMIS-
SIONER SHOWS THAT THE INCLUSION OF THE CREDIT CARD BANK IN THE COMBINED
RETURN IS NECESSARY TO PROPERLY REFLECT THE TAX LIABILITY OF THE CREDIT
CARD BANK, THE BANKING CORPORATION OR BANK HOLDING COMPANY UNDER THIS
SUBCHAPTER. HOWEVER, ANY BANKING CORPORATION THAT MEETS ONE OR MORE OF
THE TESTS IN SUBPARAGRAPHS (I) THROUGH (V) OF PARAGRAPH ONE OF
SUBSECTION (C) OF SECTION 11-639 OF THIS CHAPTER AND WAS INCLUDED IN A
COMBINED RETURN FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY
FIRST, TWO THOUSAND ELEVEN MAY CONTINUE TO BE INCLUDED IN A COMBINED
RETURN FOR FUTURE TAXABLE YEARS, PROVIDED THAT ONCE THAT BANKING CORPO-
RATION HAS BEEN INCLUDED IN A COMBINED RETURN FOR ANY TAXABLE YEAR
BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND ELEVEN, IT MUST
CONTINUE TO BE INCLUDED IN A COMBINED RETURN UNTIL IT OBTAINS THE
CONSENT OF THE COMMISSIONER TO CEASE BEING INCLUDED IN A COMBINED RETURN
BECAUSE THE COMBINED RETURN NO LONGER PROPERLY REFLECTS THE TAX LIABIL-
ITY UNDER THIS SUBCHAPTER OF ANY OF THE CORPORATIONS INCLUDED IN THE
COMBINED RETURN. FURTHER, THE CREDIT CARD BANK WILL BE INCLUDED IN A
COMBINED RETURN WITH (A) ANY BANKING CORPORATION NOT SUBJECT TO TAX
UNDER THIS SUBCHAPTER SIXTY-FIVE PERCENT OR MORE OF WHOSE VOTING STOCK
IS OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE CREDIT CARD BANK,
OR (B) ANY BANKING CORPORATION OR BANK HOLDING COMPANY NOT SUBJECT TO
TAX UNDER THIS SUBCHAPTER WHICH OWNS OR CONTROLS, DIRECTLY OR INDIRECT-
LY, SIXTY-FIVE PERCENT OR MORE OF THE VOTING STOCK OF THE CREDIT CARD
BANK, OR (C) ANY BANKING CORPORATION NOT SUBJECT TO TAX UNDER THIS
SUBCHAPTER SIXTY-FIVE PERCENT OR MORE OF THE VOTING STOCK OF WHICH IS
OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE SAME CORPORATION OR
CORPORATIONS THAT OWN OR CONTROL, DIRECTLY OR INDIRECTLY, SIXTY-FIVE
PERCENT OR MORE OF THE VOTING STOCK OF THE CREDIT CARD BANK, IF THE
CORPORATION OR CORPORATIONS DESCRIBED IN CLAUSES (A), (B) AND (C) OF
THIS SUBPARAGRAPH PROVIDE SERVICES FOR OR SUPPORT TO THE CREDIT CARD
BANK'S OPERATIONS, UNLESS THE CREDIT CARD BANK OR THE COMMISSIONER SHOWS
THAT THE INCLUSION OF ANY OF THOSE CORPORATIONS IN THE COMBINED RETURN
FAILS TO PROPERLY REFLECT THE TAX LIABILITY OF THE CREDIT CARD BANK. FOR
PURPOSES OF THIS SUBPARAGRAPH, SERVICES FOR OR SUPPORT TO THE CREDIT
CARD BANK'S OPERATIONS INCLUDE SUCH ACTIVITIES AS BILLING, CREDIT INVES-
TIGATION AND REPORTING, MARKETING, RESEARCH, ADVERTISING, MAILING,
CUSTOMER SERVICE, INFORMATION TECHNOLOGY, LENDING AND FINANCING
SERVICES, AND COMMUNICATIONS SERVICES, BUT WILL NOT INCLUDE ACCOUNTING,
LEGAL OR PERSONNEL SERVICES.
S 24. Paragraph 9 of subdivision (a) of section 11-640 of the adminis-
trative code of the city of New York, as amended by chapter 298 of the
laws of 1985, is amended to read as follows:
(9) any corporation sixty-five percent or more of whose voting stock
is owned or controlled, directly or indirectly, by a corporation or
corporations subject to article three-a of the banking law, or regis-
tered under the federal bank holding company act of nineteen hundred
fifty-six, as amended, or registered as a savings and loan holding
company (but excluding a diversified savings and loan holding company)
under the federal national housing act, as amended, or by a corporation
or corporations described in any of the foregoing paragraphs of this
subdivision, provided the corporation whose voting stock is so owned or
controlled is principally engaged in a business, regardless of where
conducted, which (i) might be lawfully conducted by a corporation
subject to article three of the banking law or by a national banking
association or (ii) is so closely related to banking or managing or
controlling banks as to be a proper incident thereto, as set forth in
S. 5898 20
paragraph eight of subsection (c) OR SUBPARAGRAPH (F) OF PARAGRAPH FOUR
OF SUBSECTION (K) of section four of the federal bank holding company
act of nineteen hundred fifty-six, as amended, OR (III) HOLDS AND
MANAGES INVESTMENT ASSETS, INCLUDING BUT NOT LIMITED TO BONDS, NOTES,
DEBENTURES AND OTHER OBLIGATIONS FOR THE PAYMENT OF MONEY, STOCKS, PART-
NERSHIP INTERESTS OR OTHER EQUITY INTERESTS, AND OTHER INVESTMENT SECU-
RITIES, AND WHICH IS NOT A BUSINESS DESCRIBED IN SUBPARAGRAPH (I) OR
(II) OF THIS PARAGRAPH.
S 25. Paragraph 1 of subdivision (g) of section 11-640 of the adminis-
trative code of the city of New York, as amended by section 7 of part P
of chapter 383 of the laws of 2001, is amended to read as follows:
(1) Notwithstanding anything to the contrary contained in this section
OTHER THAN SUBDIVISION (M) OF THIS SECTION, a corporation that was in
existence before January first, two thousand and was subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand, shall continue to be taxable under
subchapter two for all taxable years beginning on or after January
first, two thousand and before January first, two thousand one. The
preceding sentence shall not apply to any taxable year during which such
corporation is a banking corporation described in paragraphs one through
eight of subdivision (a) of this section. Notwithstanding anything to
the contrary contained in this section OTHER THAN SUBDIVISION (M) OF
THIS SECTION, a banking corporation that was in existence before January
first, two thousand and was subject to tax under this subchapter for its
last taxable year beginning before January first, two thousand, shall
continue to be taxable under this subchapter for all taxable years
beginning on or after January first, two thousand and before January
first, two thousand one. Provided, however, that nothing in this subdi-
vision shall prohibit a corporation that elected pursuant to subdivision
(d) of this section to be taxable under subchapter two of this chapter
from revoking that election in accordance with such subdivision (d).
For purposes of this paragraph, a corporation shall be considered to
be subject to tax under subchapter two of this chapter for a taxable
year if such corporation was not a taxpayer but was properly included in
a combined report filed pursuant to subdivision four of section 11-605
of this chapter for such taxable year and a corporation shall be consid-
ered to be subject to tax under this subchapter for a taxable year if
such corporation was not a taxpayer but was properly included in a
combined report filed pursuant to subdivision (f) or (g) of section
11-646 of this chapter for such taxable year. A corporation that was in
existence before January first, two thousand but first becomes a taxpay-
er in a taxable year beginning on or after January first, two thousand
and before January first, two thousand one, shall be considered for
purposes of this paragraph to have been subject to tax under subchapter
two of this chapter for its last taxable year beginning before January
first, two thousand if such corporation would have been subject to tax
under such subchapter for such taxable year if it had been a taxpayer
during such taxable year. A corporation that was in existence before
January first, two thousand but first becomes a taxpayer in a taxable
year beginning on or after January first, two thousand and before Janu-
ary first, two thousand one, shall be considered for purposes of this
paragraph to have been subject to tax under this subchapter for its last
taxable year beginning before January first, two thousand if such corpo-
ration would have been subject to tax under this subchapter for such
taxable year if it had been a taxpayer during such taxable year.
S. 5898 21
S 26. Paragraph 2 of subdivision (g) of section 11-640 of the adminis-
trative code of the city of New York, as added by section 5 of part HH
of chapter 63 of the laws of 2000, is amended to read as follows:
(2) Notwithstanding anything to the contrary contained in this section
OTHER THAN SUBDIVISION (M) OF THIS SECTION, a corporation formed on or
after January first, two thousand and before January first, two thousand
one may elect to be subject to tax under this subchapter or under
subchapter two of this chapter for its first taxable year beginning on
or after January first, two thousand and before January first, two thou-
sand one in which either (i) sixty-five percent or more of its voting
stock is owned or controlled, directly or indirectly by a financial
holding company, provided the corporation whose voting stock is so owned
or controlled is principally engaged in activities that are described in
section 4(k)(4) or 4(k)(5) of the federal bank holding company act of
nineteen hundred fifty-six, as amended and the regulations promulgated
pursuant to the authority of such section or (ii) it is a financial
subsidiary. An election under this paragraph may not be made by a corpo-
ration described in paragraphs one through eight of subdivision (a) of
this section or in subdivision (e) of this section. In addition, an
election under this paragraph may not be made by a corporation that is a
party to a reorganization, as defined in subsection (a) of section 368
of the internal revenue code of 1986, as amended, of a corporation
described in paragraph one of this subdivision if both corporations were
sixty-five percent or more owned or controlled, directly or indirectly
by the same interests at the time of the reorganization.
An election under this paragraph must be made by the taxpayer on or
before the due date for filing its return (determined with regard to
extensions of time for filing) for the applicable taxable year. The
election to be taxed under subchapter two of this chapter shall be made
by the taxpayer by filing the return required pursuant to subdivision
one of section 11-605 of this chapter and the election to be taxed under
this subchapter shall be made by the taxpayer by filing the return
required pursuant to subdivision (a) of section 11-646 of this chapter.
Any election made pursuant to this paragraph two shall be irrevocable
and shall apply to each subsequent taxable year beginning on or after
January first, two thousand and before January first, two thousand one,
provided that the stock ownership requirements described in subparagraph
(i) of this paragraph are met or such corporation described in subpara-
graph (ii) of this paragraph continues as a financial subsidiary.
S 27. Paragraphs 1 and 2 of subdivision (h) of section 11-640 of the
administrative code of the city of New York, as added by section 8 of
part P of chapter 383 of the laws of 2001, are amended to read as
follows:
(1) Notwithstanding anything to the contrary contained in this section
OTHER THAN SUBDIVISION (M) OF THIS SECTION, a corporation that was in
existence before January first, two thousand one and was subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand one, shall continue to be taxable
under subchapter two for all taxable years beginning on or after January
first, two thousand one and before January first, two thousand three.
The preceding sentence shall not apply to any taxable year during which
such corporation is a banking corporation described in paragraphs one
through eight of subdivision (a) of this section. Notwithstanding
anything to the contrary contained in this section OTHER THAN SUBDIVI-
SION (M) OF THIS SECTION, a banking corporation that was in existence
before January first, two thousand one and was subject to tax under this
S. 5898 22
subchapter for its last taxable year beginning before January first, two
thousand one, shall continue to be taxable under this subchapter for all
taxable years beginning on or after January first, two thousand one and
before January first, two thousand three. Provided, however, that noth-
ing in this subdivision shall prohibit a corporation that elected pursu-
ant to subdivision (d) of this section to be taxable under subchapter
two of this chapter from revoking that election in accordance with
subdivision (d) of this section.
For purposes of this paragraph, a corporation shall be considered to
be subject to tax under subchapter two of this chapter for a taxable
year if such corporation was not a taxpayer but was properly included in
a combined report filed pursuant to subdivision four of section 11-605
of this chapter for such taxable year and a corporation shall be consid-
ered to be subject to tax under this subchapter for a taxable year if
such corporation was not a taxpayer but was properly included in a
combined report filed pursuant to subdivision (f) or (g) of section
11-646 of this chapter for such taxable year. A corporation that was in
existence before January first, two thousand one but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand one and before January first, two thousand three, shall be
considered for purposes of this paragraph to have been subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand one if such corporation would have
been subject to tax under such subchapter for such taxable year if it
had been a taxpayer during such taxable year. A corporation that was in
existence before January first, two thousand one but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand one and before January first, two thousand three, shall be
considered for purposes of this paragraph to have been subject to tax
under this subchapter for its last taxable year beginning before January
first, two thousand one if such corporation would have been subject to
tax under this subchapter for such taxable year if it had been a taxpay-
er during such taxable year.
(2) Notwithstanding anything to the contrary contained in this section
OTHER THAN SUBDIVISION (M) OF THIS SECTION, a corporation formed on or
after January first, two thousand one and before January first, two
thousand three may elect to be subject to tax under this subchapter or
under subchapter two of this chapter for its first taxable year begin-
ning on or after January first, two thousand one and before January
first, two thousand three in which either (i) sixty-five percent or more
of its voting stock is owned or controlled, directly or indirectly by a
financial holding company, provided the corporation whose voting stock
is so owned or controlled is principally engaged in activities that are
described in section 4(k)(4) or 4(k)(5) of the federal bank holding
company act of nineteen hundred fifty-six, as amended and the regu-
lations promulgated pursuant to the authority of such section or (ii) it
is a financial subsidiary. An election under this paragraph may not be
made by a corporation described in paragraphs one through eight of
subdivision (a) of this section or in subdivision (e) of this section.
In addition, an election under this paragraph may not be made by a
corporation that is a party to a reorganization, as defined in
subsection (a) of section 368 of the internal revenue code of 1986, as
amended, of a corporation described in paragraph one of this subdivision
if both corporations were sixty-five percent or more owned or
controlled, directly or indirectly by the same interests at the time of
the reorganization.
S. 5898 23
An election under this paragraph must be made by the taxpayer on or
before the due date for filing its return (determined with regard to
extensions of time for filing) for the applicable taxable year. The
election to be taxed under subchapter two of this chapter shall be made
by the taxpayer by filing the return required pursuant to subdivision
one of section 11-605 of this chapter and the election to be taxed under
this subchapter shall be made by the taxpayer by filing the return
required pursuant to subdivision (a) of section 11-646 of this chapter.
Any election made pursuant to this paragraph shall be irrevocable and
shall apply to each subsequent taxable year beginning on or after Janu-
ary first, two thousand one and before January first, two thousand
three, provided that the stock ownership requirements described in
subparagraph (i) of this paragraph are met or such corporation described
in subparagraph (ii) of this paragraph continues as a financial subsid-
iary.
S 28. Paragraphs 1 and 2 of subdivision (i) of section 11-640 of the
administrative code of the city of New York, as added by section 6 of
part G3 of chapter 62 of the laws of 2003, are amended to read as
follows:
(1) Notwithstanding anything to the contrary contained in this section
OTHER THAN SUBDIVISION (M) OF THIS SECTION, a corporation that was in
existence before January first, two thousand three and was subject to
tax under subchapter two of this chapter for its last taxable year
beginning before January first, two thousand three, shall continue to be
taxable under subchapter two for all taxable years beginning on or after
January first, two thousand three and before January first, two thousand
four. The preceding sentence shall not apply to any taxable year during
which such corporation is a banking corporation described in paragraphs
one through eight of subdivision (a) of this section. Notwithstanding
anything to the contrary contained in this section OTHER THAN SUBDIVI-
SION (M) OF THIS SECTION, a banking corporation that was in existence
before January first, two thousand three and was subject to tax under
this subchapter for its last taxable year beginning before January
first, two thousand three, shall continue to be taxable under this
subchapter for all taxable years beginning on or after January first,
two thousand three and before January first, two thousand four.
Provided, however, that nothing in this subdivision shall prohibit a
corporation that elected pursuant to subdivision (d) of this section to
be taxable under subchapter two of this chapter from revoking that
election in accordance with subdivision (d) of this section.
For purposes of this paragraph, a corporation shall be considered to
be subject to tax under subchapter two of this chapter for a taxable
year if such corporation was not a taxpayer but was properly included in
a combined report filed pursuant to subdivision four of section 11-605
of this chapter for such taxable year and a corporation shall be consid-
ered to be subject to tax under this subchapter for a taxable year if
such corporation was not a taxpayer but was properly included in a
combined report filed pursuant to subdivision (f) or (g) of section
11-646 of this chapter for such taxable year. A corporation that was in
existence before January first, two thousand three but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand three and before January first, two thousand four, shall be
considered for purposes of this paragraph to have been subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand three if such corporation would have
been subject to tax under such subchapter for such taxable year if it
S. 5898 24
had been a taxpayer during such taxable year. A corporation that was in
existence before January first, two thousand three but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand three and before January first, two thousand four, shall be
considered for purposes of this paragraph to have been subject to tax
under this subchapter for its last taxable year beginning before January
first, two thousand three if such corporation would have been subject to
tax under this subchapter for such taxable year if it had been a taxpay-
er during such taxable year.
(2) Notwithstanding anything to the contrary contained in this section
OTHER THAN SUBDIVISION (M) OF THIS SECTION, a corporation formed on or
after January first, two thousand three and before January first, two
thousand four may elect to be subject to tax under this subchapter or
under subchapter two of this chapter for its first taxable year begin-
ning on or after January first, two thousand three and before January
first, two thousand four in which either (i) sixty-five percent or more
of its voting stock is owned or controlled, directly or indirectly by a
financial holding company, provided the corporation whose voting stock
is so owned or controlled is principally engaged in activities that are
described in section 4(k)(4) or 4(k)(5) of the federal bank holding
company act of nineteen hundred fifty-six, as amended and the regu-
lations promulgated pursuant to the authority of such section or (ii) it
is a financial subsidiary. An election under this paragraph may not be
made by a corporation described in paragraphs one through eight of
subdivision (a) of this section or in subdivision (e) of this section.
In addition, an election under this paragraph may not be made by a
corporation that is a party to a reorganization, as defined in
subsection (a) of section 368 of the internal revenue code of 1986, as
amended, of a corporation described in paragraph one of this subdivision
if both corporations were sixty-five percent or more owned or
controlled, directly or indirectly by the same interests at the time of
the reorganization.
An election under this paragraph must be made by the taxpayer on or
before the due date for filing its return (determined with regard to
extensions of time for filing) for the applicable taxable year. The
election to be taxed under subchapter two of this chapter shall be made
by the taxpayer by filing the return required pursuant to subdivision
one of section 11-605 of this chapter and the election to be taxed under
this subchapter shall be made by the taxpayer by filing the return
required pursuant to subdivision (a) of section 11-646 of this chapter.
Any election made pursuant to this paragraph shall be irrevocable and
shall apply to each subsequent taxable year beginning on or after Janu-
ary first, two thousand three and before January first, two thousand
four, provided that the stock ownership requirements described in
subparagraph (i) of this paragraph are met or such corporation described
in subparagraph (ii) of this paragraph continues as a financial subsid-
iary.
S 29. Paragraphs 1 and 2 of subdivision (j) of section 11-640 of the
administrative code of the city of New York, as added by section 6 of
part G of chapter 60 of the laws of 2004, are amended to read as
follows:
(1) Notwithstanding anything to the contrary contained in this section
OTHER THAN SUBDIVISION (M) OF THIS SECTION, a corporation that was in
existence before January first, two thousand four and was subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand four, shall continue to be taxable
S. 5898 25
under subchapter two for all taxable years beginning on or after January
first, two thousand four and before January first, two thousand six. The
preceding sentence shall not apply to any taxable year during which such
corporation is a banking corporation described in paragraphs one through
eight of subdivision (a) of this section. Notwithstanding anything to
the contrary contained in this section OTHER THAN SUBDIVISION (M) OF
THIS SECTION, a banking corporation that was in existence before January
first, two thousand four and was subject to tax under this subchapter
for its last taxable year beginning before January first, two thousand
four, shall continue to be taxable under this subchapter for all taxable
years beginning on or after January first, two thousand four and before
January first, two thousand six. Provided, however, that nothing in
this subdivision shall prohibit a corporation that elected pursuant to
subdivision (d) of this section to be taxable under subchapter two of
this chapter from revoking that election in accordance with subdivision
(d) of this section.
For purposes of this paragraph, a corporation shall be considered to
be subject to tax under subchapter two of this chapter for a taxable
year if such corporation was not a taxpayer but was properly included in
a combined report filed pursuant to subdivision four of section 11-605
of this chapter for such taxable year and a corporation shall be consid-
ered to be subject to tax under this subchapter for a taxable year if
such corporation was not a taxpayer but was properly included in a
combined report filed pursuant to subdivision (f) or (g) of section
11-646 of this chapter for such taxable year. A corporation that was in
existence before January first, two thousand four but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand four and before January first, two thousand six, shall be
considered for purposes of this paragraph to have been subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand four if such corporation would have
been subject to tax under such subchapter for such taxable year if it
had been a taxpayer during such taxable year. A corporation that was in
existence before January first, two thousand four but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand four and before January first, two thousand six, shall be
considered for purposes of this paragraph to have been subject to tax
under this subchapter for its last taxable year beginning before January
first, two thousand four if such corporation would have been subject to
tax under this subchapter for such taxable year if it had been a taxpay-
er during such taxable year.
(2) Notwithstanding anything to the contrary contained in this section
OTHER THAN SUBDIVISION (M) OF THIS SECTION, a corporation formed on or
after January first, two thousand four and before January first, two
thousand six may elect to be subject to tax under this subchapter or
under subchapter two of this chapter for its first taxable year begin-
ning on or after January first, two thousand four and before January
first, two thousand six in which either (i) sixty-five percent or more
of its voting stock is owned or controlled, directly or indirectly by a
financial holding company, provided the corporation whose voting stock
is so owned or controlled is principally engaged in activities that are
described in section 4(k)(4) or 4(k)(5) of the federal bank holding
company act of nineteen hundred fifty-six, as amended and the regu-
lations promulgated pursuant to the authority of such section or (ii) it
is a financial subsidiary. An election under this paragraph may not be
made by a corporation described in paragraphs one through eight of
S. 5898 26
subdivision (a) of this section or in subdivision (e) of this section.
In addition, an election under this paragraph may not be made by a
corporation that is a party to a reorganization, as defined in
subsection (a) of section three hundred sixty-eight of the internal
revenue code of nineteen hundred eighty-six, as amended, of a corpo-
ration described in paragraph one of this subdivision if both corpo-
rations were sixty-five percent or more owned or controlled, directly or
indirectly by the same interests at the time of the reorganization.
An election under this paragraph must be made by the taxpayer on or
before the due date for filing its return (determined with regard to
extensions of time for filing) for the applicable taxable year. The
election to be taxed under subchapter two of this chapter shall be made
by the taxpayer by filing the return required pursuant to subdivision
one of section 11-605 of this chapter and the election to be taxed under
this subchapter shall be made by the taxpayer by filing the return
required pursuant to subdivision (a) of section 11-646 of this chapter.
Any election made pursuant to this paragraph shall be irrevocable and
shall apply to each subsequent taxable year beginning on or after Janu-
ary first, two thousand four and before January first, two thousand six,
provided that the stock ownership requirements described in subparagraph
(i) of this paragraph are met or such corporation described in subpara-
graph (ii) of this paragraph continues as a financial subsidiary.
S 30. Paragraphs 1 and 2 of subdivision (k) of section 11-640 of the
administrative code of the city of New York, as added by section 6 of
part I of chapter 62 of the laws of 2006, are amended to read as
follows:
(1) Notwithstanding anything to the contrary contained in this section
OTHER THAN SUBDIVISION (M) OF THIS SECTION, a corporation that was in
existence before January first, two thousand six and was subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand six, shall continue to be taxable
under subchapter two of this chapter for all taxable years beginning on
or after January first, two thousand six and before January first, two
thousand eight. The preceding sentence shall not apply to any taxable
year during which such corporation is a banking corporation described in
paragraphs one through eight of subdivision (a) of this section.
Notwithstanding anything to the contrary contained in this section OTHER
THAN SUBDIVISION (M) OF THIS SECTION, a banking corporation that was in
existence before January first, two thousand six and was subject to tax
under this subchapter for its last taxable year beginning before January
first, two thousand six, shall continue to be taxable under this
subchapter for all taxable years beginning on or after January first,
two thousand six and before January first, two thousand eight. Provided,
however, that nothing in this subdivision shall prohibit a corporation
that elected pursuant to subdivision (d) of this section to be taxable
under subchapter two of this chapter from revoking that election in
accordance with subdivision (d) of this section.
For purposes of this paragraph, a corporation shall be considered to
be subject to tax under subchapter two of this chapter for a taxable
year if such corporation was not a taxpayer but was properly included in
a combined report filed pursuant to subdivision four of section 11-605
of this chapter for such taxable year and a corporation shall be consid-
ered to be subject to tax under this subchapter for a taxable year if
such corporation was not a taxpayer but was properly included in a
combined report filed pursuant to subdivision (f) or (g) of section
11-646 of this part for such taxable year. A corporation that was in
S. 5898 27
existence before January first, two thousand six but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand six and before January first, two thousand eight, shall be
considered for purposes of this paragraph to have been subject to tax
under subchapter two of this chapter for its last taxable year beginning
before January first, two thousand six if such corporation would have
been subject to tax under such subchapter for such taxable year if it
had been a taxpayer during such taxable year. A corporation that was in
existence before January first, two thousand six but first becomes a
taxpayer in a taxable year beginning on or after January first, two
thousand six and before January first, two thousand eight, shall be
considered for purposes of this paragraph to have been subject to tax
under this subchapter for its last taxable year beginning before January
first, two thousand six if such corporation would have been subject to
tax under this subchapter for such taxable year if it had been a taxpay-
er during such taxable year.
(2) Notwithstanding anything to the contrary contained in this section
OTHER THAN SUBDIVISION (M) OF THIS SECTION, a corporation formed on or
after January first, two thousand six and before January first, two
thousand eight may elect to be subject to tax under this subchapter or
under subchapter two of this chapter for its first taxable year begin-
ning on or after January first, two thousand six and before January
first, two thousand eight in which either (i) sixty-five percent or more
of its voting stock is owned or controlled, directly or indirectly by a
financial holding company, provided the corporation whose voting stock
is so owned or controlled is principally engaged in activities that are
described in section 4(k)(4) or 4(k)(5) of the federal bank holding
company act of nineteen hundred fifty-six, as amended and the regu-
lations promulgated pursuant to the authority of such section or (ii) it
is a financial subsidiary. An election under this paragraph may not be
made by a corporation described in paragraphs one through eight of
subdivision (a) of this section or in subdivision (e) of this section.
In addition, an election under this paragraph may not be made by a
corporation that is a party to a reorganization, as defined in
subsection (a) of section 368 of the internal revenue code of 1986, as
amended, of a corporation described in paragraph one of this subdivision
if both corporations were sixty-five percent or more owned or
controlled, directly or indirectly by the same interests at the time of
the reorganization.
An election under this paragraph must be made by the taxpayer on or
before the due date for filing its return (determined with regard to
extensions of time for filing) for the applicable taxable year. The
election to be taxed under subchapter two of this chapter shall be made
by the taxpayer by filing the return required pursuant to subdivision
one of section 11-605 of this chapter and the election to be taxed under
this subchapter shall be made by the taxpayer by filing the return
required pursuant to subdivision (a) of section 11-646 of this part. Any
election made pursuant to this paragraph shall be irrevocable and shall
apply to each subsequent taxable year beginning on or after January
first, two thousand six and before January first, two thousand eight,
provided that the stock ownership requirements described in subparagraph
(i) of this paragraph are met or such corporation described in subpara-
graph (ii) of this paragraph continues as a financial subsidiary.
S 31. Paragraphs 1 and 2 of subdivision (l) of section 11-640 of the
administrative code of the city of New York, paragraph 1 as amended by
S. 5898 28
chapter 636 of the laws of 2008 and paragraph 2 as amended by chapter 96
of the laws of 2007, are amended to read as follows:
(1) Notwithstanding anything to the contrary contained in this section
OTHER THAN SUBDIVISION (M) OF THIS SECTION, a corporation that was in
existence before January first, two thousand eight and was subject to
tax under subchapter two of this chapter for its last taxable year
beginning before January first, two thousand eight, shall continue to be
taxable under such subchapter for all taxable years beginning on or
after January first, two thousand eight and before January first, two
thousand ten. The preceding sentence shall not apply to any taxable year
during which such corporation is a banking corporation described in
paragraphs one through eight of subdivision (a) of this section.
Notwithstanding anything to the contrary contained in this section OTHER
THAN SUBDIVISION (M) OF THIS SECTION, a banking corporation or corpo-
ration that was in existence before January first, two thousand eight
and was subject to tax under this subchapter for its last taxable year
beginning before January first, two thousand eight, shall continue to be
taxable under this subchapter for all taxable years beginning on or
after January first, two thousand eight and before January first, two
thousand ten or in which the corporation satisfies the requirements for
a corporation to elect to be taxable under this subchapter. Provided
further, that nothing in this subdivision shall prohibit a corporation
that elected pursuant to subdivision (d) of this section to be taxable
under subchapter two of this chapter from revoking that election in
accordance with subdivision (d) of this section. For purposes of this
paragraph, a corporation shall be considered to be subject to tax under
subchapter two of this chapter for a taxable year if such corporation
was not a taxpayer but was properly included in a combined report filed
pursuant to subdivision four of section 11-605 of this chapter for such
taxable year and a corporation shall be considered to be subject to tax
under this subchapter for a taxable year if such corporation was not a
taxpayer but was properly included in a combined report filed pursuant
to subdivision (f) or (g) of section 11-646 of this part for such taxa-
ble year. A corporation that was in existence before January first, two
thousand eight but first becomes a taxpayer in a taxable year beginning
on or after January first, two thousand eight and before January first,
two thousand ten, shall be considered for purposes of this paragraph to
have been subject to tax under subchapter two of this chapter for its
last taxable year beginning before January first, two thousand eight if
such corporation would have been subject to tax under such subchapter
for such taxable year if it had been a taxpayer during such taxable
year. A corporation that was in existence before January first, two
thousand eight but first becomes a taxpayer in a taxable year beginning
on or after January first, two thousand eight and before January first,
two thousand ten, shall be considered for purposes of this paragraph to
have been subject to tax under this subchapter for its last taxable year
beginning before January first, two thousand eight if such corporation
would have been subject to tax under this subchapter for such taxable
year if it had been a taxpayer during such taxable year.
(2) Notwithstanding anything to the contrary contained in this section
OTHER THAN SUBDIVISION (M) OF THIS SECTION, a corporation formed on or
after January first, two thousand eight and before January first, two
thousand ten may elect to be subject to tax under this subchapter or
under subchapter two of this chapter for its first taxable year begin-
ning on or after January first, two thousand eight and before January
first, two thousand ten in which either (i) sixty-five percent or more
S. 5898 29
of its voting stock is owned or controlled, directly or indirectly by a
financial holding company, provided the corporation whose voting stock
is so owned or controlled is principally engaged in activities that are
described in section 4(k)(4) or 4(k)(5) of the federal bank holding
company act of nineteen hundred fifty-six, as amended and the regu-
lations promulgated pursuant to the authority of such section or (ii) it
is a financial subsidiary. An election under this paragraph may not be
made by a corporation described in paragraphs one through eight of
subdivision (a) of this section or in subdivision (e) of this section.
In addition, an election under this paragraph may not be made by a
corporation that is a party to a reorganization, as defined in
subsection (a) of section 368 of the internal revenue code of 1986, as
amended, of a corporation described in paragraph one of this subdivision
if both corporations were sixty-five percent or more owned or
controlled, directly or indirectly by the same interests at the time of
the reorganization.
An election under this paragraph must be made by the taxpayer on or
before the due date for filing its return (determined with regard to
extensions of time for filing) for the applicable taxable year. The
election to be taxed under subchapter two of this chapter shall be made
by the taxpayer by filing the return required pursuant to subdivision
one of section 11-605 of this chapter and the election to be taxed under
this subchapter shall be made by the taxpayer by filing the return
required pursuant to subdivision (a) of section 11-646 of this part. Any
election made pursuant to this paragraph shall be irrevocable and shall
apply to each subsequent taxable year beginning on or after January
first, two thousand eight and before January first, two thousand ten,
provided that the stock ownership and activities requirements described
in subparagraph (i) of this paragraph are met or such corporation
described in subparagraph (ii) of this paragraph continues as a finan-
cial subsidiary.
S 32. Section 11-640 of the administrative code of the city of New
York is amended by adding a new subdivision (m) to read as follows:
(M) (1) NOTWITHSTANDING ANYTHING IN THIS PART TO THE CONTRARY, IF ANY
OF THE CONDITIONS DESCRIBED IN PARAGRAPH THREE OF THIS SUBDIVISION APPLY
TO A CORPORATION THAT HAS MADE EITHER THE ELECTION TO BE TAXABLE UNDER
SUBCHAPTER TWO OF CHAPTER SIX OF THIS TITLE PURSUANT TO THE
GRAMM-LEACH-BLILEY TRANSITIONAL PROVISIONS IN THIS SECTION, OR THE
ELECTION PURSUANT TO SUBDIVISION (D) OF THIS SECTION TO CONTINUE TO BE
TAXABLE UNDER SUBCHAPTER TWO OF CHAPTER SIX OF THIS TITLE (HEREINAFTER
THE "ELECTING CORPORATION"), THEN SUCH CORPORATION SHALL BE DEEMED TO
HAVE REVOKED THE ELECTION AS OF THE FIRST DAY OF THE TAXABLE YEAR IN
WHICH SUCH CONDITION APPLIED.
(2) NOTWITHSTANDING ANYTHING IN THIS PART TO THE CONTRARY, IF ANY OF
THE CONDITIONS DESCRIBED IN PARAGRAPH THREE OF THIS SUBDIVISION APPLY TO
A CORPORATION REQUIRED TO BE TAXABLE UNDER SUBCHAPTER TWO OF CHAPTER SIX
OF THIS TITLE PURSUANT TO THE GRAMM-LEACH-BLILEY TRANSITIONAL PROVISIONS
IN THIS SECTION (HEREINAFTER THE "GRANDFATHERED CORPORATION"), SUCH
CORPORATION, IF IT IS OTHERWISE DESCRIBED IN SUBDIVISION (A) OF THIS
SECTION, SHALL BE TAXABLE UNDER THIS PART AS OF THE FIRST DAY OF THE
TAXABLE YEAR IN WHICH SUCH CONDITION APPLIED.
(3) THE PROVISIONS OF PARAGRAPH ONE AND PARAGRAPH TWO OF THIS SUBDIVI-
SION SHALL APPLY IF ANY OF THE FOLLOWING CONDITIONS EXIST OR OCCUR WITH
RESPECT TO THE ELECTING CORPORATION OR THE GRANDFATHERED CORPORATION IN
A TAXABLE YEAR (INCLUDING ANY SHORT TAXABLE YEAR) BEGINNING ON OR AFTER
JANUARY FIRST, TWO THOUSAND NINE:
S. 5898 30
(A) THE CORPORATION CEASES TO BE A TAXPAYER UNDER SUBCHAPTER TWO OF
CHAPTER SIX OF THIS TITLE;
(B) THE CORPORATION BECOMES SUBJECT TO THE FIXED DOLLAR MINIMUM TAX
UNDER CLAUSE FOUR OF SUBPARAGRAPH A OF PARAGRAPH (E) OF SUBDIVISION ONE
OF SECTION 11-604 OF THIS CHAPTER;
(C) THE CORPORATION HAS NO WAGES OR RECEIPTS ALLOCABLE TO NEW YORK
CITY PURSUANT TO SUBDIVISION THREE OF SECTION 11-604 OF THIS CHAPTER, OR
IS OTHERWISE INACTIVE; PROVIDED THAT THIS SUBPARAGRAPH SHALL NOT APPLY
TO A CORPORATION WHICH IS ENGAGED IN THE ACTIVE CONDUCT OF A TRADE OR
BUSINESS, OR SUBSTANTIALLY ALL OF THE ASSETS OF WHICH ARE STOCK AND
SECURITIES OF CORPORATIONS WHICH ARE DIRECTLY OR INDIRECTLY CONTROLLED
BY IT AND ARE ENGAGED IN THE ACTIVE CONDUCT OF A TRADE OR BUSINESS;
(D) SIXTY-FIVE PERCENT OR MORE OF THE VOTING STOCK OF THE CORPORATION
BECOMES OWNED OR CONTROLLED DIRECTLY BY A CORPORATION THAT ACQUIRED THE
STOCK IN A TRANSACTION (OR SERIES OF RELATED TRANSACTIONS) THAT QUALI-
FIES AS A PURCHASE WITHIN THE MEANING OF PARAGRAPH THREE OF SUBSECTION
(H) OF SECTION THREE HUNDRED THIRTY-EIGHT OF THE INTERNAL REVENUE CODE
UNLESS THE CORPORATION WHOSE STOCK WAS ACQUIRED AND THE CORPORATION
ACQUIRING THE STOCK WERE, IMMEDIATELY PRIOR TO SUCH PURCHASE, MEMBERS OF
THE SAME AFFILIATED GROUP (AS SUCH TERM IS DEFINED IN SECTION FIFTEEN
HUNDRED FOUR OF THE INTERNAL REVENUE CODE WITHOUT REGARD TO THE EXCLU-
SIONS PROVIDED FOR IN SUBSECTION (B) OF SUCH SECTION); OR
(E) THE CORPORATION, IN A TRANSACTION OR SERIES OF RELATED TRANS-
ACTIONS, ACQUIRES ASSETS, WHETHER BY CONTRIBUTION, PURCHASE, OR OTHER-
WISE, HAVING AN AVERAGE VALUE (DETERMINED IN ACCORDANCE WITH SUBDIVISION
TWO OF SECTION 11-604 OF THIS CHAPTER, OR, IF GREATER, A TOTAL TAX
BASIS, IN EXCESS OF FORTY PERCENT OF THE AVERAGE VALUE, OR, IF GREATER,
THE TOTAL TAX BASIS, OF ALL THE ASSETS OF THE CORPORATION IMMEDIATELY
PRIOR TO SUCH ACQUISITION AND AS A RESULT OF SUCH ACQUISITION THE CORPO-
RATION IS PRINCIPALLY ENGAGED IN A BUSINESS THAT IS DIFFERENT FROM THE
BUSINESS IMMEDIATELY PRIOR TO SUCH ACQUISITION, PROVIDED THAT SUCH
DIFFERENT BUSINESS IS DESCRIBED IN SUBPARAGRAPH (I) OR (II) OF PARAGRAPH
NINE OF SUBDIVISION (A) OF THIS SECTION.
S 33. Clause (B) of subparagraph 2 of paragraph (a) of subdivision 3
of section 11-604 of the administrative code of the city of New York, as
amended by chapter 513 of the laws of 2002, is amended to read as
follows:
(B) services performed within the city, provided, however, that (i) in
the case of a taxpayer engaged in the business of publishing newspapers
or periodicals, receipts arising from sales of advertising contained in
such newspapers and periodicals shall be deemed to arise from services
performed within the city to the extent that such newspapers and period-
icals are delivered to points within the city, (ii) receipts received
from an investment company arising from the sale of management, adminis-
tration or distribution services to such investment company shall be
deemed to arise from services performed within the city to the extent
set forth in subparagraph five of this paragraph, (iii) in the case of
taxpayers principally engaged in the activity of air freight forwarding
acting as principal and like indirect air carriage, receipts arising
from such activity shall be deemed to arise from services performed
within the city as follows: one hundred percent of such receipts if both
the pickup and delivery associated with such receipts are made in the
city and fifty percent of such receipts if either the pickup or delivery
associated with such receipts is made in the city, [and] (iv) for taxa-
ble years beginning on or after January first, two thousand two, in the
case of a taxpayer engaged in the business of publishing newspapers or
S. 5898 31
periodicals, or broadcasting radio or television programs, whether
through the public airwaves or by cable, direct or indirect satellite
transmission, or any other means of transmission, receipts arising from
sales of subscriptions, advertising or broadcasting shall be deemed to
arise from services performed within the city to the extent provided in
subparagraph nine of this paragraph, AND (V) FOR TAXABLE YEARS BEGINNING
AFTER TWO THOUSAND EIGHT, IN THE CASE OF A TAXPAYER WHICH IS A REGIS-
TERED SECURITIES OR COMMODITIES BROKER OR DEALER, THE RECEIPTS SPECIFIED
IN SUBPARAGRAPH TEN OF THIS PARAGRAPH SHALL BE DEEMED TO ARISE FROM
SERVICES PERFORMED WITHIN THE CITY TO THE EXTENT SET FORTH IN SUCH
SUBPARAGRAPH TEN,
S 34. Paragraph (a) of subdivision 3 of section 11-604 of the adminis-
trative code of the city of New York is amended by adding a new subpara-
graph 10 to read as follows:
(10) (A) IN THE CASE OF A TAXPAYER WHICH IS A REGISTERED SECURITIES OR
COMMODITIES BROKER OR DEALER, THE RECEIPTS SPECIFIED IN ITEMS (I)
THROUGH (VII) OF THIS CLAUSE SHALL BE DEEMED TO ARISE FROM SERVICES
PERFORMED WITHIN THE CITY TO THE EXTENT SET FORTH IN EACH OF SUCH ITEMS.
(I) RECEIPTS CONSTITUTING BROKERAGE COMMISSIONS DERIVED FROM THE
EXECUTION OF SECURITIES OR COMMODITIES PURCHASE OR SALES ORDERS FOR THE
ACCOUNTS OF CUSTOMERS SHALL BE DEEMED TO ARISE FROM SERVICES PERFORMED
AT THE MAILING ADDRESS IN THE RECORDS OF THE TAXPAYER OF THE CUSTOMER
WHO IS RESPONSIBLE FOR PAYING SUCH COMMISSIONS.
(II) RECEIPTS CONSTITUTING MARGIN INTEREST EARNED ON BEHALF OF BROKER-
AGE ACCOUNTS SHALL BE DEEMED TO ARISE FROM SERVICES PERFORMED AT THE
MAILING ADDRESS IN THE RECORDS OF THE TAXPAYER OF THE CUSTOMER WHO IS
RESPONSIBLE FOR PAYING SUCH MARGIN INTEREST.
(III) GROSS INCOME, INCLUDING ANY ACCRUED INTEREST OR DIVIDENDS, FROM
PRINCIPAL TRANSACTIONS FOR THE PURCHASE OR SALE OF STOCKS, BONDS,
FOREIGN EXCHANGE AND OTHER SECURITIES OR COMMODITIES (INCLUDING FUTURES
AND FORWARD CONTRACTS, OPTIONS AND OTHER TYPES OF SECURITIES OR COMMOD-
ITIES DERIVATIVES CONTRACTS) SHALL BE DEEMED TO ARISE FROM SERVICES
PERFORMED WITHIN THE CITY EITHER (I) TO THE EXTENT THAT PRODUCTION CRED-
ITS ARE AWARDED TO BRANCHES, OFFICES OR EMPLOYEES OF THE TAXPAYER WITHIN
THE CITY AS A RESULT OF SUCH PRINCIPAL TRANSACTIONS OR (II) IF THE
TAXPAYER SO ELECTS, TO THE EXTENT THAT THE GROSS PROCEEDS FROM SUCH
PRINCIPAL TRANSACTIONS (DETERMINED WITHOUT DEDUCTION FOR ANY COST
INCURRED BY THE TAXPAYER TO ACQUIRE THE SECURITIES OR COMMODITIES) ARE
GENERATED FROM SALES OF SECURITIES OR COMMODITIES TO CUSTOMERS WITHIN
THE CITY BASED UPON THE MAILING ADDRESSES OF SUCH CUSTOMERS IN THE
RECORDS OF THE TAXPAYER. FOR PURPOSES OF SUBITEM (II) OF THE PRECEDING
SENTENCE, THE TAXPAYER SHALL SEPARATELY CALCULATE SUCH GROSS INCOME FROM
PRINCIPAL TRANSACTIONS BY TYPE OF SECURITY OR COMMODITY. FOR PURPOSES OF
THIS ITEM, GROSS INCOME FROM PRINCIPAL TRANSACTIONS SHALL BE DETERMINED
AFTER THE DEDUCTION OF ANY COST INCURRED BY THE TAXPAYER TO ACQUIRE THE
SECURITIES OR COMMODITIES. FOR PURPOSES OF THIS SUBPARAGRAPH, THE TERM
"PRODUCTION CREDITS" MEANS CREDITS GRANTED PURSUANT TO THE INTERNAL
ACCOUNTING SYSTEM USED BY THE TAXPAYER TO MEASURE THE AMOUNT OF REVENUE
THAT SHOULD BE AWARDED TO A PARTICULAR BRANCH OR OFFICE OR EMPLOYEE OF
THE TAXPAYER WHICH IS BASED, AT LEAST IN PART, ON THE BRANCH'S, THE
OFFICE'S OR THE EMPLOYEE'S PARTICULAR ACTIVITIES. UPON REQUEST, THE
TAXPAYER SHALL BE REQUIRED TO FURNISH A DETAILED EXPLANATION OF SUCH
INTERNAL ACCOUNTING SYSTEM TO THE DEPARTMENT.
(IV) (I) RECEIPTS CONSTITUTING FEES EARNED BY THE TAXPAYER FOR ADVI-
SORY SERVICES TO A CUSTOMER IN CONNECTION WITH THE UNDERWRITING OF SECU-
RITIES FOR SUCH CUSTOMER (SUCH CUSTOMER BEING THE ENTITY WHICH IS
S. 5898 32
CONTEMPLATING ISSUING OR IS ISSUING SECURITIES) OR FEES EARNED BY THE
TAXPAYER FOR MANAGING AN UNDERWRITING SHALL BE DEEMED TO ARISE FROM
SERVICES PERFORMED AT THE MAILING ADDRESS IN THE RECORDS OF THE TAXPAYER
OF SUCH CUSTOMER WHO IS RESPONSIBLE FOR PAYING SUCH FEES.
(II) RECEIPTS CONSTITUTING THE PRIMARY SPREAD OR SELLING CONCESSION
FROM UNDERWRITTEN SECURITIES SHALL BE DEEMED TO ARISE FROM SERVICES
PERFORMED WITHIN THE CITY TO THE EXTENT THAT PRODUCTION CREDITS ARE
AWARDED TO BRANCHES, OFFICES OR EMPLOYEES OF THE TAXPAYER WITHIN THE
CITY AS A RESULT OF THE SALE OF THE UNDERWRITTEN SECURITIES.
(III) THE TERM "PRIMARY SPREAD" MEANS THE DIFFERENCE BETWEEN THE PRICE
PAID BY THE TAXPAYER TO THE ISSUER OF THE SECURITIES BEING MARKETED AND
THE PRICE RECEIVED FROM THE SUBSEQUENT SALE OF THE UNDERWRITTEN SECURI-
TIES AT THE INITIAL PUBLIC OFFERING PRICE, LESS ANY SELLING CONCESSION
AND ANY FEES PAID TO THE TAXPAYER FOR ADVISORY SERVICES OR ANY MANAGER'S
FEES, IF SUCH FEES ARE NOT PAID BY THE CUSTOMER TO THE TAXPAYER SEPA-
RATELY. THE TERM "PUBLIC OFFERING PRICE" MEANS THE PRICE AGREED UPON BY
THE TAXPAYER AND THE ISSUER AT WHICH THE SECURITIES ARE TO BE OFFERED TO
THE PUBLIC. THE TERM "SELLING CONCESSION" MEANS THE AMOUNT PAID TO THE
TAXPAYER FOR PARTICIPATING IN THE UNDERWRITING OF A SECURITY WHERE THE
TAXPAYER IS NOT THE LEAD UNDERWRITER.
(V) RECEIPTS CONSTITUTING INTEREST EARNED BY THE TAXPAYER ON LOANS AND
ADVANCES MADE BY THE TAXPAYER TO A CORPORATION AFFILIATED WITH THE
TAXPAYER BUT WITH WHICH THE TAXPAYER IS NOT PERMITTED OR REQUIRED TO
FILE A COMBINED REPORT PURSUANT TO SUBDIVISION FOUR OF SECTION 11-605 OF
THIS SUBCHAPTER SHALL BE DEEMED TO ARISE FROM SERVICES PERFORMED AT THE
PRINCIPAL PLACE OF BUSINESS OF SUCH AFFILIATED CORPORATION.
(VI) RECEIPTS CONSTITUTING ACCOUNT MAINTENANCE FEES SHALL BE DEEMED TO
ARISE FROM SERVICES PERFORMED AT THE MAILING ADDRESS IN THE RECORDS OF
THE TAXPAYER OF THE CUSTOMER WHO IS RESPONSIBLE FOR PAYING SUCH ACCOUNT
MAINTENANCE FEES.
(VII) RECEIPTS CONSTITUTING FEES FOR MANAGEMENT OR ADVISORY SERVICES,
INCLUDING FEES FOR ADVISORY SERVICES IN RELATION TO MERGER OR ACQUISI-
TION ACTIVITIES BUT EXCLUDING FEES PAID FOR SERVICES DESCRIBED IN ITEM
(II) OF CLAUSE (B) OF SUBPARAGRAPH TWO OF THIS PARAGRAPH, SHALL BE
DEEMED TO ARISE FROM SERVICES PERFORMED AT THE MAILING ADDRESS IN THE
RECORDS OF THE TAXPAYER OF THE CUSTOMER WHO IS RESPONSIBLE FOR PAYING
SUCH FEES.
(B) FOR PURPOSES OF THIS SUBPARAGRAPH, THE TERM "SECURITIES" SHALL
HAVE THE SAME MEANING AS IN SECTION 475(C)(2) OF THE INTERNAL REVENUE
CODE AND THE TERM "COMMODITIES" SHALL HAVE THE SAME MEANING AS IN
SECTION 475(E)(2) OF THE INTERNAL REVENUE CODE. THE TERM "REGISTERED
SECURITIES OR COMMODITIES BROKER OR DEALER" MEANS A BROKER OR DEALER
REGISTERED AS SUCH BY THE SECURITIES AND EXCHANGE COMMISSION OR THE
COMMODITIES FUTURES TRADING COMMISSION, AND SHALL INCLUDE AN
OVER-THE-COUNTER DERIVATIVES DEALER AS DEFINED UNDER REGULATIONS OF THE
SECURITIES AND EXCHANGE COMMISSION AT TITLE 17, PART 240, SECTION 3B-12
OF THE CODE OF FEDERAL REGULATIONS (17 CFR 240.3B-12).
(C) IF THE TAXPAYER RECEIVES ANY OF THE RECEIPTS ENUMERATED IN CLAUSE
(A) OF THIS SUBPARAGRAPH AS A RESULT OF A SECURITIES CORRESPONDENT
RELATIONSHIP SUCH TAXPAYER HAS WITH ANOTHER REGISTERED SECURITIES OR
COMMODITIES BROKER OR DEALER WITH THE TAXPAYER ACTING IN THIS RELATION-
SHIP AS THE CLEARING FIRM, SUCH RECEIPTS SHALL BE DEEMED TO ARISE FROM
SERVICES PERFORMED WITHIN THE CITY TO THE EXTENT SET FORTH IN EACH OF
THE ITEMS OF CLAUSE (A) OF THIS SUBPARAGRAPH. THE AMOUNT OF SUCH
RECEIPTS SHALL EXCLUDE THE AMOUNT THE TAXPAYER IS REQUIRED TO PAY TO THE
CORRESPONDENT FIRM FOR SUCH CORRESPONDENT RELATIONSHIP. IF THE TAXPAYER
S. 5898 33
RECEIVES ANY OF THE RECEIPTS ENUMERATED IN CLAUSE (A) OF THIS SUBPARA-
GRAPH AS A RESULT OF A SECURITIES CORRESPONDENT RELATIONSHIP SUCH
TAXPAYER HAS WITH ANOTHER REGISTERED SECURITIES OR COMMODITIES BROKER OR
DEALER WITH THE TAXPAYER ACTING IN THIS RELATIONSHIP AS THE INTRODUCING
FIRM, SUCH RECEIPTS SHALL BE DEEMED TO ARISE FROM SERVICES PERFORMED
WITHIN THE CITY TO THE EXTENT SET FORTH IN EACH OF THE ITEMS OF CLAUSE
(A) OF THIS SUBPARAGRAPH.
(D) IF, FOR PURPOSES OF ITEM (I) OR (II), SUBITEM (I) OF ITEM (IV), OR
ITEM (VI), OR (VII) OF CLAUSE (A) OF THIS SUBPARAGRAPH, THE TAXPAYER IS
UNABLE FROM ITS RECORDS TO DETERMINE THE MAILING ADDRESS OF THE CUSTOM-
ER, THE RECEIPTS ENUMERATED IN ANY OF SUCH ITEMS SHALL BE DEEMED TO
ARISE FROM SERVICES PERFORMED AT THE BRANCH OR OFFICE OF THE TAXPAYER
THAT GENERATES THE TRANSACTION FOR THE CUSTOMER THAT GENERATED SUCH
RECEIPTS.
S 35. Subdivision (a) of section 11-1108 of the administrative code of
the city of New York, as amended by chapter 808 of the laws of 1992, is
amended to read as follows:
a. In the manner provided in this section the commissioner of finance
shall refund or credit, without interest, any tax, penalty or interest
erroneously, illegally or unconstitutionally collected or paid, if
application for such refund shall be made to the commissioner of finance
within [one year from the payment thereof] THREE YEARS FROM THE TIME THE
RETURN WAS FILED OR TWO YEARS FROM THE TIME THE TAX WAS PAID, WHICHEVER
OF SUCH PERIODS EXPIRES LATER, OR IF NO RETURN WAS FILED, WITHIN TWO
YEARS FROM THE TIME THE TAX WAS PAID. IF THE CLAIM IS FILED WITHIN THE
THREE-YEAR PERIOD, THE AMOUNT OF THE CREDIT OR REFUND SHALL NOT EXCEED
THE PORTION OF THE TAX PAID WITHIN THE THREE YEARS IMMEDIATELY PRECEDING
THE FILING OF THE CLAIM PLUS THE PERIOD OF ANY EXTENSION OF TIME FOR
FILING THE RETURN. IF THE CLAIM IS NOT FILED WITHIN THE THREE-YEAR PERI-
OD, BUT IS FILED WITHIN THE TWO-YEAR PERIOD, THE AMOUNT OF THE CREDIT OR
REFUND SHALL NOT EXCEED THE PORTION OF THE TAX PAID DURING THE TWO YEARS
IMMEDIATELY PRECEDING THE FILING OF THE CLAIM. Whenever a refund or
credit is made or denied by the commissioner of finance, he or she shall
state his or her reason therefor and give notice thereof to the taxpayer
in writing. The commissioner of finance may, in lieu of any refund
required to be made, allow credit therefor on payments due from the
applicant.
S 36. The administrative code of the city of New York is amended by
adding a new section 11-130 to read as follows:
S 11-130 FINANCIAL INSTITUTION DATA MATCH SYSTEM FOR TAX COLLECTION
PURPOSES. 1. DEFINITIONS. AS USED IN THIS SECTION:
(A) "DEBT" MEANS ALL LIABILITIES, INCLUDING UNPAID TAX, INTEREST, AND
PENALTY, THAT THE COMMISSIONER OF FINANCE IS REQUIRED BY LAW TO COLLECT
AND THAT HAVE BEEN REDUCED TO JUDGMENT BY THE DOCKETING OF A CITY TAX
WARRANT IN THE OFFICE OF THE COUNTY CLERK OF THE APPROPRIATE COUNTY.
(B) "TAX DEBTOR" MEANS A NATURAL PERSON OR ANY ENTITY OTHER THAN A
NATURAL PERSON NAMED ON A CITY TAX WARRANT AND IDENTIFIED THEREON AS A
JUDGMENT DEBTOR.
(C) "FINANCIAL INSTITUTION" MEANS ANY FINANCIAL INSTITUTION AUTHORIZED
OR REQUIRED TO PARTICIPATE IN A FINANCIAL INSTITUTION DATA MATCH SYSTEM
OR PROGRAM FOR CHILD SUPPORT ENFORCEMENT PURPOSES UNDER FEDERAL OR STATE
LAW.
2. FINANCIAL INSTITUTION DATA MATCH SYSTEM FOR TAX COLLECTION
PURPOSES. (A) TO ASSIST THE COMMISSIONER OF FINANCE IN THE COLLECTION OF
DEBTS, THE DEPARTMENT OF FINANCE SHALL DEVELOP AND OPERATE A FINANCIAL
INSTITUTION DATA MATCH SYSTEM FOR THE PURPOSE OF IDENTIFYING AND SEIZING
S. 5898 34
THE NON-EXEMPT ASSETS OF TAX DEBTORS AS IDENTIFIED BY THE COMMISSIONER
OF FINANCE. THE COMMISSIONER IS AUTHORIZED TO DESIGNATE A THIRD PARTY TO
DEVELOP AND OPERATE THIS SYSTEM. ANY THIRD PARTY DESIGNATED BY THE
COMMISSIONER TO DEVELOP AND OPERATE A FINANCIAL DATA MATCH SYSTEM SHALL
KEEP ALL INFORMATION IT OBTAINS FROM BOTH THE DEPARTMENT AND THE FINAN-
CIAL INSTITUTION CONFIDENTIAL, AND ANY EMPLOYEE, AGENT OR REPRESENTATIVE
OF THAT THIRD PARTY IS PROHIBITED FROM DISCLOSING THAT INFORMATION TO
ANYONE OTHER THAN THE DEPARTMENT OR THE FINANCIAL INSTITUTION.
(B) EACH FINANCIAL INSTITUTION DOING BUSINESS IN THE CITY SHALL, IN
CONJUNCTION WITH THE COMMISSIONER OR THE COMMISSIONER'S AUTHORIZED
DESIGNEE, DEVELOP AND OPERATE A DATA MATCH SYSTEM TO FACILITATE THE
IDENTIFICATION AND SEIZURE OF NON-EXEMPT FINANCIAL ASSETS OF TAX DEBTORS
IDENTIFIED BY THE COMMISSIONER OR THE COMMISSIONER'S AUTHORIZED DESIG-
NEE. IF A FINANCIAL INSTITUTION HAS A DATA MATCH SYSTEM DEVELOPED OR
USED TO ADMINISTER THE CHILD SUPPORT ENFORCEMENT PROGRAMS OF THIS STATE,
AND IF THAT SYSTEM IS APPROVED BY THE COMMISSIONER OR THE COMMISSIONER'S
AUTHORIZED DESIGNEE, THE FINANCIAL INSTITUTION MAY USE THAT SYSTEM TO
COMPLY WITH THE PROVISIONS OF THIS SECTION.
3. EACH FINANCIAL INSTITUTION SHALL PROVIDE IDENTIFYING INFORMATION
EACH CALENDAR QUARTER TO THE DEPARTMENT OF FINANCE FOR EACH TAX DEBTOR
IDENTIFIED BY THE DEPARTMENT WHO OR THAT MAINTAINS AN ACCOUNT AT THE
INSTITUTION.
THE IDENTIFYING INFORMATION SHALL INCLUDE THE TAX DEBTOR'S NAME,
ADDRESS, AND SOCIAL SECURITY NUMBER OR OTHER TAXPAYER IDENTIFICATION
NUMBER, AND ALL ACCOUNT NUMBERS AND BALANCES IN EACH ACCOUNT.
4. A FINANCIAL INSTITUTION THAT COMPLIES WITH THIS SECTION WILL NOT BE
LIABLE UNDER STATE OR CITY LAW TO ANY PERSON FOR THE DISCLOSURE OF
INFORMATION TO THE COMMISSIONER OR THE COMMISSIONER'S AUTHORIZED DESIG-
NEE, OR ANY OTHER ACTION TAKEN IN GOOD FAITH TO COMPLY WITH THIS
SECTION.
5. BOTH THE FINANCIAL INSTITUTION FURNISHING A REPORT TO THE COMMIS-
SIONER UNDER THIS SECTION AND THE COMMISSIONER'S AUTHORIZED DESIGNEE ARE
PROHIBITED FROM DISCLOSING TO THE TAX DEBTOR THAT THE NAME OF THE TAX
DEBTOR HAS BEEN RECEIVED FROM OR FURNISHED TO THE COMMISSIONER, UNLESS
AUTHORIZED IN WRITING BY THE COMMISSIONER TO DO SO. A VIOLATION OF THIS
SUBDIVISION WILL RESULT IN THE IMPOSITION OF A CIVIL PENALTY EQUAL TO
THE GREATER OF ONE THOUSAND DOLLARS OR THE AMOUNT IN THE ACCOUNT OF THE
PERSON TO WHOM THE DISCLOSURE WAS MADE FOR EACH INSTANCE OF UNAUTHORIZED
DISCLOSURE BY THE FINANCIAL INSTITUTION. THAT CIVIL PENALTY CAN BE
ASSESSED AND COLLECTED UNDER THIS CODE AS IF THAT PENALTY WERE TAX.
6. A FINANCIAL INSTITUTION MAY DISCLOSE TO ITS DEPOSITORS OR ACCOUNT
HOLDERS THAT THE DEPARTMENT OF FINANCE HAS THE AUTHORITY TO REQUEST
CERTAIN IDENTIFYING INFORMATION ON CERTAIN DEPOSITORS OR ACCOUNT HOLDERS
UNDER THE FINANCIAL INSTITUTION DATA MATCH SYSTEM FOR CITY TAX
COLLECTION PURPOSES.
S 37. The administrative code of the city of New York is amended by
adding a new section 11-131 to read as follows:
S 11-131 VOLUNTARY DISCLOSURE AND COMPLIANCE PROGRAM. A. NOTWITH-
STANDING THE PROVISIONS OF ANY OTHER LAW TO THE CONTRARY, THERE IS HERE-
BY ESTABLISHED A VOLUNTARY DISCLOSURE AND COMPLIANCE PROGRAM, AS
DESCRIBED IN THIS SECTION, TO BE ADMINISTERED BY THE COMMISSIONER, FOR
ALL ELIGIBLE TAXPAYERS AS DESCRIBED IN THIS SECTION, OWING ANY TAX
IMPOSED OR PREVIOUSLY IMPOSED UNDER THIS TITLE.
B. FOR PURPOSES OF THE VOLUNTARY DISCLOSURE AND COMPLIANCE PROGRAM
ESTABLISHED UNDER THIS SECTION, AN ELIGIBLE TAXPAYER IS AN INDIVIDUAL,
PARTNERSHIP, ESTATE, TRUST, CORPORATION, LIMITED LIABILITY COMPANY,
S. 5898 35
JOINT STOCK COMPANY, OR ANY OTHER COMPANY, TRUSTEE, RECEIVER, ASSIGNEE,
REFEREE, SOCIETY, ASSOCIATION, BUSINESS OR ANY OTHER PERSON SUBJECT TO A
TAX IMPOSED BY THIS TITLE AND WHO MEETS THE FOLLOWING CRITERIA: (1) THE
TAXPAYER IS NOT CURRENTLY UNDER AUDIT BY THE DEPARTMENT; (2) THE TAXPAY-
ER IS ONE WHO IS VOLUNTARILY DISCLOSING A NEW YORK CITY TAX LIABILITY
THAT THE DEPARTMENT HAS NOT DETERMINED, CALCULATED, RESEARCHED OR IDEN-
TIFIED AT THE TIME OF THE DISCLOSURE; (3) THE TAXPAYER IS NOT CURRENTLY
A PARTY TO ANY CRIMINAL INVESTIGATION BEING CONDUCTED BY AN AGENCY OF
THE STATE OR ANY POLITICAL SUBDIVISION THEREOF; AND (4) THE TAXPAYER IS
NOT SEEKING TO DISCLOSE PARTICIPATION IN A TAX AVOIDANCE TRANSACTION
THAT IS A FEDERAL OR NEW YORK STATE REPORTABLE OR LISTED TRANSACTION.
C. UNDER THE VOLUNTARY DISCLOSURE AND COMPLIANCE PROGRAM, UPON
EXECUTION OF A VOLUNTARY DISCLOSURE AND COMPLIANCE AGREEMENT BY THE
ELIGIBLE TAXPAYER AND THE COMMISSIONER, THE COMMISSIONER SHALL WAIVE ANY
APPLICABLE PENALTIES FOR THE FOLLOWING: (1) FAILURE TO PAY ANY SUCH TAX
LIABILITY; (2) FAILURE TO FILE A RETURN OR REPORT WITH RESPECT TO ANY
SUCH TAX LIABILITY; AND (3) FAILURE TO PAY ESTIMATED TAX. IN ADDITION,
NO CRIMINAL ACTION OR PROCEEDING SHALL BE BROUGHT AGAINST AN ELIGIBLE
TAXPAYER RELATING TO THE TAX LIABILITY COVERED BY THE AGREEMENT. THIS
AGREEMENT SHALL NOT PRECLUDE THE AUDITING OF THE RETURNS FILED TO DETER-
MINE IF THOSE RETURNS WERE COMPLETED IN ACCORDANCE WITH EXISTING LAW AND
REGULATION. INTENTIONAL FAILURE TO PAY ALL THE TAXES, PLUS RELATED
INTEREST, PURSUANT TO THE VOLUNTARY DISCLOSURE AND COMPLIANCE AGREEMENT
ENTERED INTO BETWEEN THE TAXPAYER AND THE COMMISSIONER, SHALL INVALIDATE
ANY WAIVER OF PENALTY, INVALIDATE THE FORBEARANCE OF ANY ADMINISTRATIVE
OR CRIMINAL ACTION OR PROCEEDING.
D. TO PARTICIPATE IN THE VOLUNTARY DISCLOSURE AND COMPLIANCE PROGRAM,
AN ELIGIBLE TAXPAYER MUST APPLY BY SUBMITTING A DISCLOSURE STATEMENT IN
THE FORM AND MANNER PRESCRIBED BY THE COMMISSIONER. THE DISCLOSURE
STATEMENT SHALL CONTAIN ALL THE INFORMATION THE COMMISSIONER REASONABLY
DEEMS NECESSARY TO EFFECTIVELY ADMINISTER THE PROGRAM. AS LONG AS ALL
THE REQUIREMENTS OF THE VOLUNTARY DISCLOSURE AND COMPLIANCE PROGRAM ARE
MET, NO APPLICATION SHALL BE DENIED SOLELY BECAUSE THE TAXPAYER HAS
ADMITTED THAT THE DELINQUENCY WAS THE RESULT OF WILLFUL OR FRAUDULENT
CONDUCT. EXCEPT IN INSTANCES WHERE THE TAXPAYER HAS FAILED TO COMPLY
WITH THE TERMS OF A VOLUNTARY DISCLOSURE AND COMPLIANCE AGREEMENT, THE
COMMISSIONER SHALL NOT USE THE TAXPAYER'S DISCLOSURE AS EVIDENCE IN ANY
PROCEEDING BROUGHT AGAINST THE TAXPAYER OR REVEAL THE CONTENTS OF THE
DISCLOSURE TO ANY LAW ENFORCEMENT OR OTHER AGENCY. HOWEVER, THE DISCLO-
SURE OF ANY RETURNS OR REPORTS FILED UNDER THIS PROGRAM WITH THE SECRE-
TARY OF THE TREASURY OF THE UNITED STATES, HIS OR HER DELEGATES, OR THE
PROPER TAX OFFICER OF ANY STATE OR CITY IS PERMITTED AS OTHERWISE
PROVIDED FOR IN THIS TITLE.
E. (1) IF THE TAXPAYER AND THE TAX LIABILITY ARE ELIGIBLE UNDER THE
VOLUNTARY DISCLOSURE AND COMPLIANCE PROGRAM, THE COMMISSIONER IS AUTHOR-
IZED TO ENTER INTO A VOLUNTARY DISCLOSURE AND COMPLIANCE AGREEMENT WITH
THE TAXPAYER. A VOLUNTARY DISCLOSURE AND COMPLIANCE AGREEMENT WILL BE IN
A FORM TO BE ESTABLISHED BY THE COMMISSIONER AND INCLUDE SUCH TERMS AS
THE COMMISSIONER MAY REASONABLY REQUIRE TO SATISFY THE TAXPAYER'S
DISCLOSED TAX OBLIGATIONS AND ENABLE AND REQUIRE THE TAXPAYER TO COMPLY
WITH THE APPLICABLE PROVISIONS OF THIS TITLE IN THE FUTURE. THE TAXPAYER
MUST PAY THE TAX AND THE RELATED INTEREST THAT ARE THE SUBJECT OF THE
VOLUNTARY DISCLOSURE AND COMPLIANCE AGREEMENT WHEN THE AGREEMENT IS
EXECUTED OR WITHIN THE TIME STATED ON A BILL ISSUED TO THE TAXPAYER BY
THE COMMISSIONER. IN THE EVENT THE COMMISSIONER IS SATISFIED THAT THE
TAXPAYER CANNOT MAKE IMMEDIATE FULL PAYMENT OF THE DISCLOSED TAX LIABIL-
S. 5898 36
ITY, THE COMMISSIONER MAY ENTER INTO AN INSTALLMENT PAYMENT PROGRAM WITH
THE TAXPAYER FOR THE PAYMENT OF THE TAX AND INTEREST DUE. THE COMMIS-
SIONER MAY REQUIRE A FINANCIAL DISCLOSURE STATEMENT SETTING FORTH INFOR-
MATION CONCERNING THE TAXPAYER'S CURRENT ASSETS, LIABILITIES, EARNINGS,
AND OTHER FINANCIAL INFORMATION BEFORE ENTERING INTO AN INSTALLMENT
PAYMENT PLAN WITH THE TAXPAYER. IN ADDITION TO ANY OTHER INFORMATION AND
TERMS THAT THE COMMISSIONER DETERMINES ARE APPROPRIATE, THE VOLUNTARY
DISCLOSURE AND COMPLIANCE AGREEMENT SHALL PROVIDE THAT, IF THE TAXPAYER
COMPLIES WITH THE TERMS OF THE COMPLIANCE AGREEMENT, THE TAXPAYER WILL
NOT BE SUBJECT TO ANY CRIMINAL TAX PROSECUTION IN NEW YORK CITY FOR THE
CONDUCT DISCLOSED BY THE TAXPAYER.
(2) IF THE TAXPAYER INTENTIONALLY PROVIDES FALSE MATERIAL INFORMATION
OR OMITS MATERIAL INFORMATION IN HIS OR HER SUBMISSIONS TO THE COMMIS-
SIONER, OR ATTEMPTS TO INTENTIONALLY DEFEAT OR EVADE A TAX DUE PURSUANT
TO THE AGREEMENT EXECUTED UNDER THIS SECTION, OR INTENTIONALLY FAILS TO
COMPLY WITH THE TERMS OF THE COMPLIANCE AGREEMENT, SUCH AGREEMENT SHALL
BE DEEMED RESCINDED.
F. UNLESS THE COMMISSIONER ON HIS OR HER OWN MOTION REDETERMINES THE
AMOUNT OF TAX DUE, INCLUDING APPLICABLE INTEREST, NO REFUND SHALL BE
GRANTED OR CREDIT ALLOWED WITH RESPECT TO ANY TAXES, INCLUDING APPLICA-
BLE INTEREST, PAID UNDER THIS PROGRAM. THE COMMISSIONER MAY PROMULGATE
REGULATIONS, ISSUE FORMS AND INSTRUCTIONS, AND TAKE ANY AND ALL OTHER
ACTIONS NECESSARY TO IMPLEMENT THE PROVISIONS OF THE PROGRAM ESTABLISHED
UNDER THIS SECTION.
G. THE COMMISSIONER SHALL PUBLICIZE THE PROGRAM PROVIDED FOR IN THIS
SECTION SO AS TO MAXIMIZE PUBLIC AWARENESS OF AND PARTICIPATION IN SUCH
PROGRAM.
H. FOR PURPOSES OF THIS SECTION, THE TERM "TAXPAYER" INCLUDES ANY
PERSON REQUIRED TO COLLECT ANY OF THE TAXES SPECIFIED IN SUBDIVISION A
OF THIS SECTION.
I. THE VOLUNTARY DISCLOSURE AND COMPLIANCE APPLICATION, THE DISCLOSURE
STATEMENT, THE VOLUNTARY DISCLOSURE AND COMPLIANCE AGREEMENT, AND OTHER
DOCUMENTS FILED BY AN ELIGIBLE TAXPAYER PURSUANT TO THE PROGRAM ESTAB-
LISHED BY THIS SECTION ARE DEEMED TO BE REPORTS AND RETURNS: (A) SUBJECT
TO THE SECRECY PROVISIONS OF THIS TITLE IN THE SAME MANNER AND TO THE
SAME EXTENT AS IF SUCH DOCUMENTS WERE REFERRED TO IN ANY OF THE SECRECY
PROVISIONS OF THIS TITLE; AND (B) FOR PURPOSES OF THE CRIMINAL
PROVISIONS OF CHAPTER FORTY OF THIS TITLE.
S 38. The administrative code of the city of New York is amended by
adding a new section 11-132 to read as follows:
S 11-132 MANDATORY ELECTRONIC FILING AND PAYMENT. A. FOR PURPOSES OF
THIS SECTION, THE FOLLOWING TERMS HAVE THE SPECIFIED MEANINGS:
(1) "AUTHORIZED TAX DOCUMENT" MEANS A TAX DOCUMENT WHICH THE COMMIS-
SIONER OF FINANCE HAS AUTHORIZED TO BE FILED ELECTRONICALLY.
(2) "ELECTRONIC" MEANS COMPUTER TECHNOLOGY.
(3) "ORIGINAL TAX DOCUMENT" MEANS A TAX DOCUMENT THAT IS FILED DURING
THE CALENDAR YEAR FOR WHICH THAT TAX DOCUMENT IS REQUIRED OR PERMITTED
TO BE FILED.
(4) "TAX" MEANS ANY TAX OR OTHER MATTER ADMINISTERED BY THE COMMIS-
SIONER OF FINANCE PURSUANT TO THE ADMINISTRATIVE CODE OR ANY OTHER
PROVISION OF LAW.
(5) "TAX DOCUMENT" MEANS A RETURN, REPORT OR ANY OTHER DOCUMENT RELAT-
ING TO A TAX OR OTHER MATTER ADMINISTERED BY THE COMMISSIONER OF
FINANCE.
(6) "TAX RETURN PREPARER" MEANS ANY PERSON WHO PREPARES FOR COMPEN-
SATION, OR WHO EMPLOYS OR ENGAGES ONE OR MORE PERSONS TO PREPARE FOR
S. 5898 37
COMPENSATION, ANY AUTHORIZED TAX DOCUMENT. FOR PURPOSES OF THIS SECTION,
THE TERM "TAX RETURN PREPARER" ALSO INCLUDES A PAYROLL SERVICE.
(7) "TAX SOFTWARE" MEANS ANY COMPUTER SOFTWARE PROGRAM INTENDED FOR
TAX RETURN PREPARATION PURPOSES. FOR PURPOSES OF THIS SECTION, THE TERM
"TAX SOFTWARE" INCLUDES, BUT IS NOT LIMITED TO, AN OFF-THE-SHELF SOFT-
WARE PROGRAM LOADED ONTO A TAX RETURN PREPARER'S OR TAXPAYER'S COMPUTER,
AN ONLINE TAX PREPARATION APPLICATION, OR A TAX PREPARATION APPLICATION
HOSTED BY THE DEPARTMENT.
B. THE COMMISSIONER MAY, BY RULE, REQUIRE THAT IF A TAX RETURN PREPAR-
ER PREPARED MORE THAN ONE HUNDRED ORIGINAL TAX DOCUMENTS DURING ANY
CALENDAR YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND NINE,
AND IF, IN ANY SUCCEEDING CALENDAR YEAR THAT TAX RETURN PREPARER
PREPARES ONE OR MORE AUTHORIZED TAX DOCUMENTS USING TAX SOFTWARE, THEN,
FOR THAT SUCCEEDING CALENDAR YEAR AND FOR EACH SUBSEQUENT CALENDAR YEAR
THEREAFTER, ALL AUTHORIZED TAX DOCUMENTS PREPARED BY THAT TAX RETURN
PREPARER MUST BE FILED ELECTRONICALLY, IN ACCORDANCE WITH INSTRUCTIONS
PRESCRIBED BY THE COMMISSIONER.
C. THE COMMISSIONER MAY, BY RULE, REQUIRE THAT IF A TAXPAYER DOES NOT
UTILIZE A TAX RETURN PREPARER TO PREPARE AN AUTHORIZED TAX DOCUMENT
DURING ANY CALENDAR YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TEN, BUT INSTEAD PREPARES THAT DOCUMENT ITSELF USING TAX SOFTWARE,
THEN, FOR THAT CALENDAR YEAR AND FOR EACH SUBSEQUENT CALENDAR YEAR THER-
EAFTER, ALL AUTHORIZED TAX DOCUMENTS PREPARED BY THE TAXPAYER USING TAX
SOFTWARE MUST BE FILED ELECTRONICALLY, IN ACCORDANCE WITH INSTRUCTIONS
PRESCRIBED BY THE COMMISSIONER.
D. THE COMMISSIONER MAY, BY RULE, REQUIRE THAT ANY TAX LIABILITY OR
OTHER AMOUNT DUE SHOWN ON, OR REQUIRED TO BE PAID WITH, AN AUTHORIZED
TAX DOCUMENT REQUIRED TO BE FILED ELECTRONICALLY PURSUANT TO SUBDIVISION
B OR C OF THIS SECTION MUST BE PAID BY THE TAXPAYER ELECTRONICALLY, IN
ACCORDANCE WITH INSTRUCTIONS PRESCRIBED BY THE COMMISSIONER.
E. FAILURE TO ELECTRONICALLY FILE OR ELECTRONICALLY PAY. THE COMMIS-
SIONER MAY, BY RULE, IMPOSE PENALTIES FOR FAILING TO ELECTRONICALLY FILE
OR ELECTRONICALLY PAY AS FOLLOWS: (1) IF A TAX RETURN PREPARER IS
REQUIRED TO FILE AUTHORIZED TAX DOCUMENTS ELECTRONICALLY PURSUANT TO
SUBDIVISION B OF THIS SECTION, AND THAT PREPARER FAILS TO FILE ONE OR
MORE OF THOSE DOCUMENTS ELECTRONICALLY, THEN THAT PREPARER WILL BE
SUBJECT TO A PENALTY OF FIFTY DOLLARS FOR EACH FAILURE TO ELECTRONICALLY
FILE AN AUTHORIZED TAX DOCUMENT, UNLESS IT IS SHOWN THAT THE FAILURE IS
DUE TO REASONABLE CAUSE AND NOT DUE TO WILLFUL NEGLECT. FOR PURPOSES OF
THIS PARAGRAPH, REASONABLE CAUSE SHALL INCLUDE, BUT NOT BE LIMITED TO, A
TAXPAYER'S ELECTION NOT TO ELECTRONICALLY FILE THE AUTHORIZED TAX DOCU-
MENT.
(2) IF A TAXPAYER IS REQUIRED TO ELECTRONICALLY PAY ANY TAX LIABILITY
OR OTHER AMOUNT DUE SHOWN ON, OR REQUIRED TO BE PAID WITH, AN AUTHORIZED
TAX DOCUMENT REQUIRED TO BE FILED ELECTRONICALLY PURSUANT TO SUBDIVISION
B OR C OF THIS SECTION, AND THAT TAXPAYER FAILS TO ELECTRONICALLY PAY
ONE OR MORE OF THOSE LIABILITIES OR OTHER AMOUNTS DUE, THEN THAT TAXPAY-
ER WILL BE SUBJECT TO A PENALTY OF FIFTY DOLLARS FOR EACH FAILURE TO
ELECTRONICALLY PAY.
(3) THE PENALTIES PROVIDED FOR BY THIS SUBDIVISION MUST BE PAID UPON
NOTICE AND DEMAND, AND WILL BE ASSESSED, COLLECTED AND PAID IN THE SAME
MANNER AS THE TAX TO WHICH THE ELECTRONIC TRANSACTION RELATES. HOWEVER,
IF THE ELECTRONIC TRANSACTION RELATES TO ANOTHER MATTER ADMINISTERED BY
THE COMMISSIONER OF FINANCE, THEN THE PENALTY WILL BE ASSESSED,
COLLECTED AND PAID IN THE SAME MANNER AS PRESCRIBED BY THE CHAPTER OF
THE CODE THAT RELATES TO COLLECTION OF THE GENERAL CORPORATION TAX.
S. 5898 38
F. ANY PROVISION OF THE NEW YORK CITY CHARTER OR THIS CODE REQUIRING
ELECTRONIC PAYMENT OR ELECTRONIC FILING OF A TAX RETURN IS NOT AFFECTED
BY THIS SECTION AND WILL REMAIN IN FULL FORCE AND EFFECT.
G. THE COMMISSIONER OF FINANCE IS AUTHORIZED TO PROMULGATE ANY RULES
NECESSARY TO IMPLEMENT THIS SECTION.
S 39. Subdivision (a) of section 11-524 of the administrative code of
the city of New York, as amended by chapter 241 of the laws of 1989, is
amended to read as follows:
(a) General. If any amount of tax is not paid on or before the last
date prescribed in this chapter for payment, interest on such amount at
the underpayment rate set by the commissioner of finance pursuant to
section 11-537 of this chapter, or, if no rate is set, at the rate of
[six] SEVEN AND ONE-HALF percent per annum shall be paid for the period
from such last date to the date paid, whether or not any extension of
time for payment was granted. Interest under this subdivision shall not
be paid if the amount thereof is less than one dollar.
S 40. Subdivision (j) of section 11-524 of the administrative code of
the city of New York, as amended by section 1 and as relettered by
section 26 of chapter 241 of the laws of 1989, is amended to read as
follows:
(j) Interest on erroneous refund. Any portion of tax or other amount
which has been erroneously refunded, and which is recoverable by the
commissioner of finance, shall bear interest at the underpayment rate
set by the commissioner of finance pursuant to section 11-537 of this
chapter, or, if no rate is set, at the rate of [six] SEVEN AND ONE-HALF
percent per annum from the date of the payment of the refund, but only
if it appears that any part of the refund was induced by fraud or a
misrepresentation of a material fact.
S 41. Subdivision (c) of section 11-525 of the administrative code of
the city of New York, as amended by chapter 241 of the laws of 1989, is
amended to read as follows:
(c) Failure to file declaration or underpayment of estimated tax. If
any taxpayer fails to file a declaration of estimated tax or fails to
pay all or any part of an installment of estimated tax, the taxpayer
shall be deemed to have made an underpayment of estimated tax. There
shall be added to the tax for the taxable year an amount at the under-
payment rate set by the commissioner of finance pursuant to section
11-537 of this chapter, or, if no rate is set, at the rate of [six]
SEVEN AND ONE-HALF percent per annum upon the amount of the underpayment
for the period of the underpayment but not beyond the fifteenth day of
the fourth month following the close of the taxable year. The amount of
the underpayment shall be the excess of the amount of the installment
which would be required to be paid if the estimated tax were equal to
ninety percent of the tax shown on the return for the taxable year (or
if no return was filed, ninety percent of the tax for such year) over
the amount, if any, of the installment paid on or before the last day
prescribed for such payment. No underpayment shall be deemed to exist
with respect to a declaration or installment otherwise due on or after
the taxpayer's death. In any case in which there would be no underpay-
ment if this subdivision were applied by substituting "eighty percent"
for "ninety percent" where it appears in the second preceding sentence,
the addition to tax under this subdivision shall be equal to seventy-
five percent of the amount otherwise determined under this subdivision.
S 42. Paragraphs 1 and 2 of subdivision (f) of section 11-537 of the
administrative code of the city of New York, paragraph 1 as amended by
section 1 of part U of chapter 60 of the laws of 2004 and paragraph 2 as
S. 5898 39
amended by chapter 241 of the laws of 1989 and subparagraph (B) of para-
graph 2 as amended by section 1 of part E of chapter 63 of the laws of
2003, are amended to read as follows:
(1) Authority to set interest rates. The commissioner of finance shall
set the overpayment and underpayment rates of interest to be paid pursu-
ant to sections 11-524, 11-525 and 11-528 of this chapter, but if no
such rate or rates of interest are set, such OVERPAYMENT rate [or rates]
shall be deemed to be set at six percent per annum AND SUCH UNDERPAYMENT
RATE SHALL BE DEEMED TO BE SET AT SEVEN AND ONE-HALF PERCENT PER ANNUM.
Such overpayment and underpayment rates shall be the rates prescribed in
paragraph two of this subdivision, but the underpayment rate shall not
be less than [six] SEVEN AND ONE-HALF percent per annum. Any such rates
set by the commissioner of finance shall apply to taxes, or any portion
thereof, which remain or become due or overpaid on or after the date on
which such rates become effective and shall apply only with respect to
interest computed or computable for periods or portions of periods
occurring in the period during which such rates are in effect.
(2) General rule. (A) Overpayment rate. The overpayment rate set under
this subdivision shall be the sum of (i) the federal short-term rate as
provided under paragraph three of this subdivision, plus (ii) two
percentage points.
(B) Underpayment rate. The underpayment rate set under this subdivi-
sion shall be the sum of (i) the federal short-term rate as provided
under paragraph three of this subdivision, plus (ii) [five] SEVEN
percentage points.
S 43. Subdivision 1 of section 11-606 of the administrative code of
the city of New York, as amended by chapter 241 of the laws of 1989, is
amended to read as follows:
1. To the extent the tax imposed by section 11-603 of this subchapter
shall not have been previously paid pursuant to section 11-608 of this
subchapter,
(a) such tax, or the balance thereof, shall be payable to the commis-
sioner of finance in full at the time the report is required to be
filed, and
(b) such tax, or the balance thereof, imposed on any taxpayer which
ceases to do business in the city or to be subject to the tax imposed by
this subchapter shall be payable to the commissioner of finance at the
time the report is required to be filed; all other taxes of any such
taxpayer, which pursuant to the foregoing provisions of this section
would otherwise be payable subsequent to the time such report is
required to be filed, shall nevertheless be payable at such time.
If the taxpayer, within the time prescribed by section 11-605 of this
subchapter, shall have applied for an automatic extension of time to
file its annual report and shall have paid to the commissioner of
finance on or before the date such application is filed an amount prop-
erly estimated as provided by said section, the only amount payable in
addition to the tax shall be interest at the underpayment rate set by
the commissioner of finance pursuant to section 11-687 of this chapter,
or, if no rate is set, at the rate of [six] SEVEN AND ONE-HALF percent
per annum upon the amount by which the tax, or the portion thereof paya-
ble on or before the date the report was required to be filed, exceeds
the amount so paid. For purposes of the preceding sentence:
(1) an amount so paid shall be deemed properly estimated if it is
either: (A) not less than ninety percent of the tax as finally deter-
mined (computed without regard to any credit allowable under subdivision
eleven of section 11-604 of this subchapter), or (B) not less than the
S. 5898 40
tax shown (computed without regard to any credit allowable under subdi-
vision eleven of section 11-604 of this subchapter) on the taxpayer's
report for the preceding taxable year, if such preceding year was a
taxable year of twelve months; and
(2) the time when a report is required to be filed shall be determined
without regard to any extension of time for filing such report.
S 44. Subdivision 9 of section 11-608 of the administrative code of
the city of New York, as amended by chapter 241 of the laws of 1989, is
amended to read as follows:
9. The commissioner of finance may grant a reasonable extension of
time, not to exceed six months, for payment of any installment of esti-
mated tax required pursuant to this section, on such terms and condi-
tions as the commissioner may require including the furnishing of a bond
or other security by the taxpayer in an amount not exceeding twice the
amount for which any extension of time for payment is granted, provided
however that interest at the underpayment rate set by the commissioner
of finance pursuant to section 11-687 of this chapter, or, if no rate is
set, at the rate of [six] SEVEN AND ONE-HALF percent per annum for the
period of the extension shall be charged and collected on the amount for
which any extension of time for payment is granted under this subdivi-
sion.
S 45. Subdivision (i) of section 11-645 of the administrative code of
the city of New York, as amended by chapter 241 of the laws of 1989, is
amended to read as follows:
(i) Extension of time. The commissioner of finance may grant a reason-
able extension of time, not to exceed six months, for payment of any
installment of estimated tax required pursuant to this section, on such
terms and conditions as the commissioner may require, including the
furnishing of a bond or other security by the taxpayer in an amount not
exceeding twice the amount for which any extension of time for payment
is granted, provided, however that interest at the underpayment rate set
by the commissioner of finance pursuant to section 11-687 of this chap-
ter, or, if no rate is set, at the rate of [six] SEVEN AND ONE-HALF
percent per annum for the period of the extension shall be charged and
collected on the amount for which any extension of time for payment is
granted under this subdivision.
S 46. The opening paragraph of subdivision (b) of section 11-647 of
the administrative code of the city of New York, as amended by chapter
241 of the laws of 1989, is amended to read as follows:
If the taxpayer, within the time prescribed by subdivision (c) of
section 11-646 of this part, shall have applied for an automatic exten-
sion of time to file its annual return and shall have paid to the
commissioner of finance on or before the date of such application is
filed an amount properly estimated as provided by said subdivision the
only amount payable in addition to the tax shall be interest at the
underpayment rate set by the commissioner of finance pursuant to section
11-687 of this chapter, or, if no rate is set, at the rate of [six]
SEVEN AND ONE-HALF percent per annum upon the amount by which the tax,
or portion thereof payable on or before the date the return was required
to be filed, exceeds the amount so paid. For the purposes of the preced-
ing sentence:
S 47. Subdivisions 1 and 10 of section 11-675 of the administrative
code of the city of New York, as amended by section 9 and subdivision 10
as renumbered by section 27 of chapter 241 of the laws of 1989, are
amended to read as follows:
S. 5898 41
1. General. If any amount of tax is not paid on or before the last
date prescribed in whichever of the named subchapters is applicable for
payment, interest on such amount at the underpayment rate set by the
commissioner of finance pursuant to section 11-687 of this subchapter,
or, if no rate is set, at the rate of [six] SEVEN AND ONE-HALF percent
per annum shall be paid for the period from such last date to the date
paid, whether or not any extension of time for payment was granted.
Interest under this subdivision shall not be paid if the amount thereof
is less than one dollar.
10. Interest on erroneous refund. Any portion of tax or other amount
which has been erroneously refunded, and which is recoverable by the
commissioner of finance, shall bear interest at the underpayment rate
set by the commissioner of finance pursuant to section 11-687 of this
subchapter, or, if no rate is set, at the rate of [six] SEVEN AND
ONE-HALF percent per annum from the date of the payment of the refund,
but only if it appears that any part of the refund was induced by fraud
or a misrepresentation of a material fact.
S 48. Subdivision 3 of section 11-676 of the administrative code of
the city of New York, as amended by chapter 241 of the laws of 1989, is
amended to read as follows:
3. Failure to file declaration or underpayment of estimated tax. If
any taxpayer fails to file a declaration of estimated tax under subchap-
ter two or three of this chapter, or fails to pay all or any part of an
amount which is applied as an installment against such estimated tax, it
shall be deemed to have made an underpayment of estimated tax. There
shall be added to the tax for the taxable year an amount at the under-
payment rate set by the commissioner of finance pursuant to section
11-687 of this subchapter, or, if no rate is set, at the rate of [six]
SEVEN AND ONE-HALF percent per annum upon the amount of the underpayment
for the period of the underpayment but not beyond the fifteenth day of
the third month following the close of the taxable year. The amount of
the underpayment shall be, with respect to any installment of estimated
tax computed on the basis of the preceding year's tax, the excess of the
amount required to be paid over the amount, if any, paid on or before
the last day prescribed for such payment or, with respect to any other
installment of estimated tax, the excess of the amount of the install-
ment which would be required to be paid if the estimated tax were equal
to ninety percent of the tax shown on the return for the taxable year
(or if no return was filed, ninety percent of the tax for such year)
over the amount, if any, of the installment paid on or before the last
day prescribed for such payment. In any case in which there would be no
underpayment if "eighty percent" were substituted for "ninety percent"
each place it appears in this subdivision, the addition to the tax shall
be equal to seventy-five percent of the amount otherwise determined. No
underpayment shall be deemed to exist with respect to a declaration or
installment otherwise due on or after the termination of existence of
the taxpayer.
S 49. Paragraphs (a) and (b) of subdivision 5 of section 11-687 of the
administrative code of the city of New York, paragraph (a) as amended by
local law number 39 of the city of New York for the year 2003, paragraph
(b) as amended by chapter 241 of the laws of 1989, subparagraph (B) of
paragraph (b) as amended by local law number 38 of the city of New York
for the year 2003, are amended to read as follows:
(a) Authority to set interest rates. The commissioner of finance shall
set the overpayment and underpayment rates of interest to be paid pursu-
ant to sections 11-606, 11-608, 11-645, 11-647, 11-675, 11-676, and
S. 5898 42
11-679 of this chapter, but if no such rate or rates of interest are
set, such OVERPAYMENT rate [or rates] shall be deemed to be set at six
percent per annum AND SUCH UNDERPAYMENT RATE SHALL BE DEEMED TO BE SET
AT SEVEN AND ONE-HALF PERCENT PER ANNUM. Such overpayment and underpay-
ment rates shall be the rates prescribed in paragraph (b) of this subdi-
vision but the underpayment rate shall not be less than [six] SEVEN AND
ONE-HALF percent per annum. Any such rates set by the commissioner of
finance shall apply to taxes, or any portion thereof, which remain or
become due or overpaid on or after the date on which such rates become
effective and shall apply only with respect to interest computed or
computable for periods or portions of periods occurring in the period
during which such rates are in effect.
(b) General rule. (A) Overpayment rate. The overpayment rate set under
this subdivision shall be the sum of (i) the federal short-term rate as
provided under paragraph (c) of this subdivision, plus (ii) two percent-
age points.
(B) Underpayment rate. The underpayment rate set under this subdivi-
sion shall be the sum of (i) the federal short-term rate as provided
under paragraph (c) of this subdivision, plus (ii) [five] SEVEN percent-
age points.
S 50. Subdivisions (a) and (b) of section 11-715 of the administrative
code of the city of New York, as amended by chapter 765 of the laws of
1985, are amended to read as follows:
(a) Interest on underpayment; quarterly return. If any amount of tax
required to be paid together with a return, other than the final return
for a tax year, is not paid on or before the last date prescribed for
payment (without regard to any extension of time granted for payment),
interest on such amount at the rate set by the commissioner of finance
pursuant to subdivision (h) of this section, or, if no rate is set, at
the rate of [six] SEVEN AND ONE-HALF percent per annum, shall be paid
for the period from such last date until twenty days after the end of
the tax year during which such payments were due or until such prior
time as the tax paid for the tax year equals seventy-five percent of the
full tax required to be paid for the tax year. Such interest shall be
paid with the final return for the tax year to which it relates. In
computing the amount of interest to be paid, such interest shall be
compounded daily. Interest under this subdivision shall not be paid if
the amount thereof is less than one dollar.
(b) Interest on underpayment; final return. If any amount of tax
required to be paid together with the final return for a tax year is not
paid on or before the last date prescribed for payment (without regard
to any extension of time granted for payment), interest on such amount
at the rate set by the commissioner of finance pursuant to subdivision
(h) of this section, or, if no rate is set, at the rate of [six] SEVEN
AND ONE-HALF percent per annum, shall be paid for the period from such
last date to the date of payment. In computing the amount of interest to
be paid, such interest shall be compounded daily. Interest under this
subdivision shall not be paid if the amount thereof is less than one
dollar.
S 51. Paragraphs 1 and 2 of subdivision (h) of section 11-715 of the
administrative code of the city of New York, paragraph 1 as amended by
chapter 241 of the laws of 1989 and paragraph 2 as amended by section 2
of part E of chapter 63 of the laws of 2003, are amended to read as
follows:
(1) Authority to set interest rates. The commissioner of finance shall
set the rate of interest to be paid pursuant to subdivisions (a) and (b)
S. 5898 43
of this section, but if no such rate of interest is set, such rate shall
be deemed to be set at [six] SEVEN AND ONE-HALF percent per annum. Such
rate shall be the same for each subdivision and shall be the rate
prescribed in paragraph two of this subdivision but shall not be less
than [six] SEVEN AND ONE-HALF percent per annum. Any such rate set by
the commissioner of finance shall apply to taxes, or any portion there-
of, which remain or become due on or after the date on which such rate
becomes effective and shall apply only with respect to interest computed
or computable for periods or portions of periods occurring in the period
in which such rate is in effect.
(2) General rule. The rate of interest set under this subdivision
shall be the sum of (i) the federal short-term rate as provided under
paragraph three of this subdivision, plus (ii) [five] SEVEN percentage
points.
S 52. Subdivision (a) of section 11-817 of the administrative code of
the city of New York, as amended by chapter 765 of the laws of 1985, is
amended to read as follows:
(a) Interest on underpayments. If any amount of tax is not paid on or
before the last date prescribed for payment (without regard to any
extension of time granted for payment), interest on such amount at the
rate set by the commissioner of finance pursuant to subdivision (g) of
this section, or, if no rate is set, at the rate of [six] SEVEN AND
ONE-HALF percent per annum, shall be paid for the period from such last
date to the date of payment. In computing the amount of interest to be
paid, such interest shall be compounded daily. Interest under this
subdivision shall not be paid if the amount thereof is less than one
dollar.
S 53. Paragraphs 1 and 2 of subdivision (g) section 11-817 of the
administrative code of the city of New York, paragraph 1 as amended by
chapter 241 of the laws of 1989 and paragraph 2 as amended by section 3
of part E of chapter 63 of the laws of 2003, are amended to read as
follows:
(1) Authority to set interest rates. The commissioner of finance shall
set the rate of interest to be paid pursuant to subdivision (a) of this
section, but if no such rate of interest is set, such rate shall be
deemed to be set at [six] SEVEN AND ONE-HALF percent per annum. Such
rate shall be the rate prescribed in paragraph two of this subdivision
but shall not be less than [six] SEVEN AND ONE-HALF percent per annum.
Any such rate set by the commissioner of finance shall apply to taxes,
or any portion thereof, which remain or become due on or after the date
on which such rate becomes effective and shall apply only with respect
to interest computed or computable for periods or portions of periods
occurring in the period in which such rate is in effect.
(2) General rule. The rate of interest set under this subdivision
shall be the sum of (i) the federal short-term rate as provided under
paragraph three of this subdivision, plus (ii) [five] SEVEN percentage
points.
S 54. Subdivision (a) of section 11-905 of the administrative code of
the city of New York, as amended by chapter 241 of the laws of 1989, is
amended to read as follows:
(a) Interest on underpayments. If any amount of tax is not paid on or
before the last date prescribed for payment (without regard to any
extension of time granted for payment), interest on such amount at the
underpayment rate set by the commissioner of finance pursuant to subdi-
vision (g) of this section, or, if no rate is set, at the rate of [six]
SEVEN AND ONE-HALF percent per annum, shall be paid for the period from
S. 5898 44
such last date to the date of payment. In computing the amount of inter-
est to be paid, such interest shall be compounded daily. Interest under
this subdivision shall not be paid if the amount thereof is less than
one dollar.
S 55. Paragraphs 1 and 2 of subdivision (g) of section 11-905 of the
administrative code of the city of New York, paragraph 1 as amended by
section 2 of part U of chapter 60 of the laws of 2004, paragraph 2 as
amended by chapter 241 of the laws of 1989 and subparagraph (B) of para-
graph 2 as amended by section 4 of part E of chapter 63 of the laws of
2003, are amended to read as follows:
(1) Authority to set interest rates. The commissioner of finance shall
set the overpayment and underpayment rates of interest to be paid pursu-
ant to subdivision (a) of this section and subdivision (a) of section
11-906 of this chapter, but if no such OVERPAYMENT rate [or rates] of
interest are set, such rate or rates shall be deemed to be set at six
percent per annum AND SUCH UNDERPAYMENT RATE SHALL BE DEEMED TO BE SET
AT SEVEN AND ONE-HALF PERCENT PER ANNUM. Such rates shall be the over-
payment and underpayment rates prescribed in paragraph two of this
subdivision but the underpayment rate shall not be less than [six] SEVEN
AND ONE-HALF percent per annum. Any such rates set by the commissioner
of finance shall apply to taxes, or any portion thereof, which remain or
become due or overpaid on or after the date on which such rates become
effective and shall apply only with respect to interest computed or
computable for periods or portions of periods occurring in the period in
which such rates are in effect.
(2) General rule. (A) Overpayment rate. The overpayment rate set under
this subdivision shall be the sum of (i) the federal short-term rate as
provided under paragraph three of this subdivision, plus (ii) two
percentage points.
(B) Underpayment rate. The underpayment rate set under this subdivi-
sion shall be the sum of (i) the federal short-term rate as provided
under paragraph three of this subdivision, plus (ii) [five] SEVEN
percentage points.
S 56. Subdivision (a) of section 11-1114 of the administrative code of
the city of New York, as amended by chapter 765 of the laws of 1985, is
amended to read as follows:
(a) Interest on underpayments. If any amount of tax is not paid on or
before the last date prescribed for payment (without regard to any
extension of time granted for payment), interest on such amount at the
rate set by the commissioner of finance pursuant to subdivision (g) of
this section, or, if no rate is set, at the rate of [six] SEVEN AND
ONE-HALF percent per annum, shall be paid for the period from such last
date to the date of payment. In computing the amount of interest to be
paid, such interest shall be compounded daily. Interest under this
subdivision shall not be paid if the amount thereof is less than one
dollar.
S 57. Paragraphs 1 and 2 of subdivision (g) of section 11-1114 of the
administrative code of the city of New York, paragraph 1 as amended by
chapter 241 of the laws of 1989 and paragraph 2 as amended by section 5
of part E of chapter 63 of the laws of 2003, are amended to read as
follows:
(1) Authority to set interest rates. The commissioner of finance shall
set the rate of interest to be paid pursuant to subdivision (a) of this
section, but if no such rate of interest is set, such rate shall be
deemed to be set at [six] SEVEN AND ONE-HALF percent per annum. Such
rate shall be the rate prescribed in paragraph two of this subdivision
S. 5898 45
but shall not be less than [six] SEVEN AND ONE-HALF percent per annum.
Any such rate set by the commissioner of finance shall apply to taxes,
or any portion thereof, which remain or become due on or after the date
on which such rate becomes effective and shall apply only with respect
to interest computed or computable for periods or portions of periods
occurring in the period in which such rate is in effect.
(2) General rule. The rate of interest set under this subdivision
shall be the sum of (i) the federal short-term rate as provided under
paragraph three of this subdivision, plus (ii) [five] SEVEN percentage
points.
S 58. Subdivision (a) of section 11-1213 of the administrative code of
the city of New York, as amended by chapter 765 of the laws of 1985, is
amended to read as follows:
(a) Interest on underpayments. If any amount of tax is not paid over
or paid on or before the last date prescribed for payment (without
regard to any extension of time granted for payment), interest on such
amount at the rate set by the commissioner of finance pursuant to subdi-
vision (g) of this section, or, if no rate is set, at the rate of [six]
SEVEN AND ONE-HALF percent per annum, shall be paid for the period from
such last date to the date of payment. In computing the amount of inter-
est to be paid, such interest shall be compounded daily. Interest under
this subdivision shall not be paid if the amount thereof is less than
one dollar.
S 59. Paragraphs 1 and 2 of subdivision (g) of section 11-1213 of the
administrative code of the city of New York, paragraph 1 as amended by
chapter 241 of the laws of 1989 and paragraph 2 as amended by section 6
of part E of chapter 63 of the laws of 2003, are amended to read as
follows:
(1) Authority to set interest rates. The commissioner of finance shall
set the rate of interest to be paid pursuant to subdivision (a) of this
section, but if no such rate of interest is set, such rate shall be
deemed to be set at [six] SEVEN AND ONE-HALF percent per annum. Such
rate shall be the rate prescribed in paragraph two of this subdivision
but shall not be less than [six] SEVEN AND ONE-HALF percent per annum.
Any such rate set by the commissioner of finance shall apply to taxes,
or any portion thereof, which remain or become due on or after the date
on which such rate becomes effective and shall apply only with respect
to interest computed or computable for periods or portions of periods
occurring in the period in which such rate is in effect.
(2) General rule. The rate of interest set under this subdivision
shall be the sum of (i) the federal short-term rate as provided under
paragraph three of this subdivision, plus (ii) [five] SEVEN percentage
points.
S 60. Paragraphs 1 and 2 of subdivision d of section 11-1317 of the
administrative code of the city of New York, paragraph 1 as amended by
chapter 765 of the laws of 1985, paragraph 2 as amended by chapter 241
of the laws of 1989 and subparagraph (B) of paragraph 2 as amended by
section 7 of part E of chapter 63 of the laws of 2003, are amended to
read as follows:
(1) If any amount of tax is not paid on or before the last date
prescribed for payment (without regard to any extension of time granted
for payment), interest on such amount at the rate set by the commission-
er of finance pursuant to paragraph two of this subdivision, or, if no
rate is set, at the rate of [six] SEVEN AND ONE-HALF percent per annum,
shall be paid for the period from such last date to the date of payment.
In computing the amount of interest to be paid, such interest shall be
S. 5898 46
compounded daily. Interest under this subdivision shall not be paid if
the amount thereof is less than one dollar. The interest imposed by this
subdivision shall be paid and disposed of in the same manner as other
revenues from this chapter. Unpaid interest may be enforced in the same
manner as the tax imposed by this chapter.
(2) (A) The commissioner of finance shall set the rate of interest to
be paid pursuant to paragraph one of this subdivision, but if no such
rate of interest is set, such rate shall be deemed to be set at [six]
SEVEN AND ONE-HALF percent per annum. Such rate shall be the rate
prescribed in subparagraph (B) of this paragraph but shall not be less
than [six] SEVEN AND ONE-HALF percent per annum. Any such rate set by
the commissioner of finance shall apply to taxes, or any portion there-
of, which remain or become due on or after the date on which such rate
becomes effective and shall apply only with respect to interest computed
or computable for periods or portions of periods occurring in the period
in which such rate is in effect.
(B) General rule. The rate of interest set under this subdivision
shall be the sum of (i) the federal short-term rate as provided under
paragraph three of this subdivision, plus (ii) [five] SEVEN percentage
points.
S 61. Subdivision (a) of section 11-1413 of the administrative code of
the city of New York, as amended by chapter 765 of the laws of 1985, is
amended to read as follows:
(a) Interest on underpayments. If any amount of tax is not paid on or
before the last date prescribed for payment (without regard to any
extension of time granted for payment), interest on such amount at the
rate set by the commissioner of finance pursuant to subdivision (g) of
this section, or, if no rate is set, at the rate of [six] SEVEN AND
ONE-HALF percent per annum, shall be paid for the period from such last
date to the date of payment. In computing the amount of interest to be
paid, such interest shall be compounded daily. Interest under this
subdivision shall not be paid if the amount thereof is less than one
dollar.
S 62. Paragraphs 1 and 2 of subdivision (g) of section 11-1413 of the
administrative code of the city of New York, paragraph 1 as amended by
chapter 241 of the laws of 1989 and paragraph 2 as amended by section 8
of part E of chapter 63 of the laws of 2003, are amended to read as
follows:
(1) Authority to set interest rates. The commissioner of finance shall
set the rate of interest to be paid pursuant to subdivision (a) of this
section, but if no such rate of interest is set, such rate shall be
deemed to be set at [six] SEVEN AND ONE-HALF percent per annum. Such
rate shall be the rate prescribed in paragraph two of this subdivision
but shall not be less than [six] SEVEN AND ONE-HALF percent per annum.
Any such rate set by the commissioner of finance shall apply to taxes,
or any portion thereof, which remain or become due on or after the date
on which such rate becomes effective and shall apply only with respect
to interest computed or computable for periods or portions of periods
occurring in the period in which such rate is in effect.
(2) General rule. The rate of interest set under this subdivision
shall be the sum of (i) the federal short-term rate as provided under
paragraph three of this subdivision, plus (ii) [five] SEVEN percentage
points.
S 63. Subdivision (a) of section 11-1515 of the administrative code of
the city of New York, as amended by chapter 765 of the laws of 1985, is
amended to read as follows:
S. 5898 47
(a) Interest on underpayments. If any amount of tax is not paid on or
before the last date prescribed for payment (without regard to any
extension of time granted for payment), interest on such amount at the
rate set by the commissioner of finance pursuant to subdivision (g) of
this section, or, if no rate is set, at the rate of [six] SEVEN AND
ONE-HALF percent per annum, shall be paid for the period from such last
date to the date of payment. In computing the amount of interest to be
paid, such interest shall be compounded daily. Interest under this
subdivision shall not be paid if the amount thereof is less than one
dollar.
S 64. Paragraphs 1 and 2 of subdivision (g) of section 11-1515 of the
administrative code of the city of New York, paragraph 1 as amended by
chapter 241 of the laws of 1989 and paragraph 2 as amended by section 9
of part E of chapter 63 of the laws of 2003, are amended to read as
follows:
(1) Authority to set interest rates. The commissioner of finance shall
set the rate of interest to be paid pursuant to subdivision (a) of this
section, but if no such rate of interest is set, such rate shall be
deemed to be set at [six] SEVEN AND ONE-HALF percent per annum. Such
rate shall be the rate prescribed in paragraph two of this subdivision
but shall not be less than [six] SEVEN AND ONE-HALF percent per annum.
Any such rate set by the commissioner of finance shall apply to taxes,
or any portion thereof, which remain or become due on or after the date
on which such rate becomes effective and shall apply only with respect
to interest computed or computable for periods or portions of periods
occurring in the period in which such rate is in effect.
(2) General rule. The rate of interest set under this subdivision
shall be the sum of (i) the federal short-term rate as provided under
paragraph three of this subdivision, plus (ii) [five] SEVEN percentage
points.
S 65. Subdivision (a) of section 11-2114 of the administrative code of
the city of New York, as amended by chapter 765 of the laws of 1985, is
amended to read as follows:
(a) Interest on underpayments. If any amount of tax is not paid on or
before the last date prescribed for payment (without regard to any
extension of time granted for payment), interest on such amount at the
rate set by the commissioner of finance pursuant to subdivision (g) of
this section, or, if no rate is set, at the rate of [six] SEVEN AND
ONE-HALF percent per annum, shall be paid for the period from such last
date to the date of payment. In computing the amount of interest to be
paid, such interest shall be compounded daily. Interest under this
subdivision shall not be paid if the amount thereof is less than one
dollar.
S 66. Paragraphs 1 and 2 of subdivision (g) of section 11-2114 of the
administrative code of the city of New York, paragraph 1 as amended by
chapter 241 of the laws of 1989 and paragraph 2 as amended by section 10
of part E of chapter 63 of the laws of 2003, are amended to read as
follows:
(1) Authority to set interest rates. The commissioner of finance shall
set the rate of interest to be paid pursuant to subdivision (a) of this
section, but if no such rate of interest is set, such rate shall be
deemed to be set at [six] SEVEN AND ONE-HALF percent per annum. Such
rate shall be the rate prescribed in paragraph two of this subdivision
but shall not be less than [six] SEVEN AND ONE-HALF percent per annum.
Any such rate set by the commissioner of finance shall apply to taxes,
or any portion thereof, which remain or become due on or after the date
S. 5898 48
on which such rate becomes effective and shall apply only with respect
to interest computed or computable for periods or portions of periods
occurring in the period in which such rate is in effect.
(2) General rule. The rate of interest set under this subdivision
shall be the sum of (i) the federal short-term rate as provided under
paragraph three of this subdivision, plus (ii) [five] SEVEN percentage
points.
S 67. Subdivision (a) of section 11-2414 of the administrative code of
the city of New York, as amended by chapter 765 of the laws of 1985, is
amended to read as follows:
(a) Interest on underpayments. If any amount of tax is not paid on or
before the last date prescribed for payment (without regard to any
extension of time granted for payment), interest on such amount at the
rate set by the commissioner of finance pursuant to subdivision (g) of
this section, or, if no rate is set, at the rate of [six] SEVEN AND
ONE-HALF percent per annum, shall be paid for the period from such last
date to the date of payment. In computing the amount of interest to be
paid, such interest shall be compounded daily. Interest under this
subdivision shall not be paid if the amount thereof is less than one
dollar.
S 68. Paragraphs 1 and 2 of subdivision (g) of section 11-2414 of the
administrative code of the city of New York, paragraph 1 as amended by
chapter 241 of the laws of 1989 and paragraph 2 as amended by section 11
of part E of chapter 63 of the laws of 2003, are amended to read as
follows:
(1) Authority to set interest rates. The commissioner of finance shall
set the rate of interest to be paid pursuant to subdivision (a) of this
section, but if no such rate of interest is set, such rate shall be
deemed to be set at [six] SEVEN AND ONE-HALF percent per annum. Such
rate shall be the rate prescribed in paragraph two of this subdivision
but shall not be less than [six] SEVEN AND ONE-HALF percent per annum.
Any such rate set by the commissioner of finance shall apply to taxes,
or any portion thereof, which remain or become due on or after the date
on which such rate becomes effective and shall apply only with respect
to interest computed or computable for periods or portions of periods
occurring in the period in which such rate is in effect.
(2) General rule. The rate of interest set under this subdivision
shall be the sum of (i) the federal short-term rate as provided under
paragraph three of this subdivision, plus (ii) [five] SEVEN percentage
points.
S 69. Subdivision (a) of section 11-2515 of the administrative code of
the city of New York, as amended by chapter 765 of the laws of 1985, is
amended to read as follows:
(a) Interest on underpayments. If any amount of tax is not paid or
paid over on or before the last date prescribed for payment (without
regard to any extension of time granted for payment), interest on such
amount at the rate set by the commissioner of finance pursuant to subdi-
vision (g) of this section, or, if no rate is set, at the rate of [six]
SEVEN AND ONE-HALF percent per annum, shall be paid for the period from
such last date to the date of payment. In computing the amount of inter-
est to be paid, such interest shall be compounded daily. Interest under
this subdivision shall not be paid if the amount thereof is less than
one dollar.
S 70. Paragraphs 1 and 2 of subdivision (g) of section 11-2515 of the
administrative code of the city of New York, paragraph 1 as amended by
chapter 241 of the laws of 1989 and paragraph 2 as amended by section 12
S. 5898 49
of part E of chapter 63 of the laws of 2003, are amended to read as
follows:
(1) Authority to set interest rates. The commissioner of finance shall
set the rate of interest to be paid pursuant to subdivision (a) of this
section, but if no such rate of interest is set, such rate shall be
deemed to be set at [six] SEVEN AND ONE-HALF percent per annum. Such
rate shall be the rate prescribed in paragraph two of this subdivision
but shall not be less than [six] SEVEN AND ONE-HALF percent per annum.
Any such rate set by the commissioner of finance shall apply to taxes,
or any portion thereof, which remain or become due on or after the date
on which such rate becomes effective and shall apply only with respect
to interest computed or computable for periods or portions of periods
occurring in the period in which such rate is in effect.
(2) General rule. The rate of interest set under this subdivision
shall be the sum of (i) the federal short-term rate as provided under
paragraph three of this subdivision, plus (ii) [five] SEVEN percentage
points.
S 71. Subdivision (a) of section 11-2714 of the administrative code of
the city of New York, as amended by chapter 765 of the laws of 1985, is
amended to read as follows:
(a) Interest on underpayments. If any annual vault charge is not paid
on or before the last date prescribed for payment (without regard to any
extension of time granted for payment), interest on such amount at the
rate set by the commissioner of finance pursuant to subdivision (g) of
this section, or, if no rate is set, at the rate of [six] SEVEN AND
ONE-HALF percent per annum, shall be paid for the period from such last
date to the date of payment. In computing the amount of interest to be
paid, such interest shall be compounded daily. Interest under this
subdivision shall not be paid if the amount thereof is less than one
dollar.
S 72. Paragraphs 1 and 2 of subdivision (g) of section 11-2714 of the
administrative code of the city of New York, paragraph 1 as amended by
chapter 241 of the laws of 1989 and paragraph 2 as amended by section 13
of part E of chapter 63 of the laws of 2003, are amended to read as
follows:
(1) Authority to set interest rates. The commissioner of finance,
shall set the rate of interest to be paid pursuant to subdivision (a) of
this section, but if no such rate of interest is set, such rate shall be
deemed to be set at [six] SEVEN AND ONE-HALF percent per annum. Such
rate shall be the rate prescribed in paragraph two of this subdivision
but shall not be less than [six] SEVEN AND ONE-HALF percent per annum.
Any such rate set by the commissioner of finance shall apply to vault
charges, or any portion thereof, which remain or become due on or after
the date on which such rate becomes effective and shall apply only with
respect to interest computed or computable for periods or portions of
periods occurring in the period in which such rate is in effect.
(2) General rule. The rate of interest set under this subdivision
shall be the sum of (i) the federal short-term rate as provided under
paragraph three of this subdivision, plus (ii) [five] SEVEN percentage
points.
S 73. Section 1004 of the business corporation law, as renumbered by
chapter 834 of the laws of 1962, is amended to read as follows:
S 1004. Certificate of dissolution; filing.
(A) The department shall not file such certificate unless the consent
of the state [tax commission] DEPARTMENT OF TAXATION AND FINANCE to the
S. 5898 50
dissolution is attached thereto. Upon such filing, the corporation is
dissolved.
(B) NOTWITHSTANDING PARAGRAPH (A) OF THIS SECTION, WITH RESPECT TO ANY
CORPORATION THAT HAS DONE BUSINESS IN THE CITY OF NEW YORK AND INCURRED
LIABILITY FOR ANY TAX OR CHARGE UNDER CHAPTER SIX, SEVEN, EIGHT, TEN,
ELEVEN, TWELVE, THIRTEEN, FOURTEEN, FIFTEEN, TWENTY-ONE, TWENTY-FOUR,
TWENTY-FIVE OR TWENTY-SEVEN OF TITLE ELEVEN OF THE ADMINISTRATIVE CODE
OF THE CITY OF NEW YORK, THE DEPARTMENT SHALL NOT FILE SUCH CERTIFICATE
UNLESS THE CONSENT OF THE COMMISSIONER OF FINANCE OF THE CITY OF NEW
YORK TO THE DISSOLUTION IS ALSO ATTACHED THERETO.
S 74. Paragraph (c) of section 1007 of the business corporation law,
as amended by chapter 834 of the laws of 1962, is amended to read as
follows:
(c) Notwithstanding this section and section 1008, tax claims and
other claims of this state [and], of the United States AND OF THE
DEPARTMENT OF FINANCE OF THE CITY OF NEW YORK shall not be required to
be filed under those sections, and such claims shall not be barred
because not so filed, and distribution of the assets of the corporation,
or any part thereof, may be deferred until determination of any such
claims.
S 75. Section 1004 of the not-for-profit corporation law is amended to
read as follows:
S 1004. Certificate of dissolution; filing; effect.
(A) The department of state shall not file a certificate of dissol-
ution unless the consent of the state [tax commission] DEPARTMENT OF
TAXATION AND FINANCE to the dissolution is attached thereto. Upon
filing the certificate, the corporation is dissolved.
(B) NOTWITHSTANDING PARAGRAPH (A) OF THIS SECTION, WITH RESPECT TO ANY
CORPORATION THAT HAS DONE BUSINESS IN THE CITY OF NEW YORK AND INCURRED
LIABILITY FOR ANY TAX OR CHARGE UNDER CHAPTER SIX, SEVEN, EIGHT, TEN,
ELEVEN, TWELVE, THIRTEEN, FOURTEEN, FIFTEEN, TWENTY-ONE, TWENTY-FOUR,
TWENTY-FIVE OR TWENTY-SEVEN OF TITLE ELEVEN OF THE ADMINISTRATIVE CODE
OF THE CITY OF NEW YORK, THE DEPARTMENT OF STATE SHALL NOT FILE A
CERTIFICATE OF DISSOLUTION UNLESS THE CONSENT OF THE COMMISSIONER OF
FINANCE OF THE CITY OF NEW YORK TO THE DISSOLUTION IS ALSO ATTACHED
THERETO.
S 76. Paragraph (c) of section 1007 of the not-for-profit corporation
law, as amended by chapter 434 of the laws of 2006, is amended to read
as follows:
(c) Notwithstanding this section and section 1008 (Jurisdiction of
supreme court to supervise dissolution and liquidation), tax claims and
other claims of this state [and], of the United States AND OF THE
DEPARTMENT OF FINANCE OF THE CITY OF NEW YORK shall not be required to
be filed under those sections, and such claims shall not be barred
because not so filed, and distribution of the assets of the corporation,
or any part thereof, may be deferred until determination of any such
claims.
S 77. The administrative code of the city of New York is amended by
adding a new section 11-133 to read as follows:
S 11-133 CONSENT TO DISSOLUTION OF A CORPORATION. WHERE A CORPORATION
FILES AN APPLICATION FOR CONSENT TO DISSOLUTION WITH THE COMMISSIONER OF
FINANCE FOR PURPOSES OF OBTAINING NON-JUDICIAL DISSOLUTION UNDER ARTICLE
TEN OF THE BUSINESS CORPORATION LAW OR ARTICLE TEN OF THE NOT-FOR-PROFIT
CORPORATION LAW, SUCH CONSENT SHALL BE ISSUED BY THE COMMISSIONER ONLY
IF THE COMMISSIONER HAS DETERMINED THAT ALL FEES, TAXES, PENALTIES AND
INTEREST IMPOSED ON SUCH CORPORATION UNDER CHAPTERS SIX, SEVEN, EIGHT,
S. 5898 51
TEN, ELEVEN, TWELVE, THIRTEEN, FOURTEEN, FIFTEEN, TWENTY-ONE,
TWENTY-FOUR, TWENTY-FIVE AND TWENTY-SEVEN OF THIS TITLE HAVE BEEN (A)
PAID IN FULL, OR (B) PAID PURSUANT TO AN OFFER IN COMPROMISE PURSUANT TO
PARAGRAPH C OR D OF SUBDIVISION TWO OF SECTION FIFTEEN HUNDRED FOUR OF
THE NEW YORK CITY CHARTER. NOTWITHSTANDING THE PRECEDING SENTENCE, THE
COMMISSIONER OF FINANCE IS AUTHORIZED IN HIS OR HER DISCRETION AND IN
SUCH MANNER AND ON SUCH TERMS AS HE OR SHE MAY DETERMINE TO ISSUE A
CONSENT TO DISSOLUTION IF A WRITTEN AGREEMENT FOR PAYMENT OF SUCH FEES,
TAXES, PENALTIES AND INTEREST IS EXECUTED WITH THE COMMISSIONER. SUCH
APPLICATIONS SHALL BE FILED IN THE FORM AND MANNER DETERMINED BY THE
COMMISSIONER.
S 78. Paragraph 1 of subdivision (f) of section 11-525 of the adminis-
trative code of the city of New York, as amended by chapter 765 of the
laws of 1985, is amended to read as follows:
(1) If any part of a deficiency is due to fraud, there shall be added
to the tax an amount equal to [fifty percent of] TWO TIMES the deficien-
cy.
S 79. Paragraph 2 of subdivision (f) of section 11-525 of the adminis-
trative code of the city of New York is REPEALED.
S 80. Section 11-525 of the administrative code of the city of New
York is amended by adding a new subdivision (l) to read as follows:
(L) FALSE OR FRAUDULENT DOCUMENT PENALTY. ANY TAXPAYER THAT SUBMITS A
FALSE OR FRAUDULENT DOCUMENT TO THE DEPARTMENT SHALL BE SUBJECT TO A
PENALTY OF ONE HUNDRED DOLLARS PER DOCUMENT SUBMITTED, OR FIVE HUNDRED
DOLLARS PER TAX RETURN SUBMITTED. SUCH PENALTY SHALL BE IN ADDITION TO
ANY OTHER PENALTY OR ADDITION PROVIDED BY LAW.
S 81. Paragraph (a) of subdivision 6 of section 11-676 of the adminis-
trative code of the city of New York, as amended by chapter 765 of the
laws of 1985, is amended to read as follows:
(a) If any part of a deficiency is due to fraud, there shall be added
to the tax an amount equal to [fifty percent of] TWO TIMES the deficien-
cy.
S 82. Paragraph (b) of subdivision 6 of section 11-676 of the adminis-
trative code of the city of New York is REPEALED.
S 83. Section 11-676 of the administrative code of the city of New
York is amended by adding a new subdivision 15 to read as follows:
15. FALSE OR FRAUDULENT DOCUMENT PENALTY. ANY TAXPAYER THAT SUBMITS A
FALSE OR FRAUDULENT DOCUMENT TO THE DEPARTMENT SHALL BE SUBJECT TO A
PENALTY OF ONE HUNDRED DOLLARS PER DOCUMENT SUBMITTED, OR FIVE HUNDRED
DOLLARS PER TAX RETURN SUBMITTED. SUCH PENALTY SHALL BE IN ADDITION TO
ANY OTHER PENALTY OR ADDITION PROVIDED BY LAW.
S 84. Paragraph 1 of subdivision (d) of section 11-1114 of the admin-
istrative code of the city of New York, as amended by chpater 765 of the
laws of 1985, is amended to read as follows:
(1) If any part of an underpayment of tax is due to fraud, there shall
be added to the tax a penalty equal to [fifty percent of] TWO TIMES the
underpayment.
S 85. Paragraph 2 of subdivision (d) of section 11-1114 of the admin-
istrative code of the city of New York is REPEALED.
S 86. Section 11-1114 of the administrative code of the city of New
York is amended by adding a new subdivision (l) to read as follows:
(L) FALSE OR FRAUDULENT DOCUMENT PENALTY. ANY TAXPAYER THAT SUBMITS A
FALSE OR FRAUDULENT DOCUMENT TO THE DEPARTMENT SHALL BE SUBJECT TO A
PENALTY OF ONE HUNDRED DOLLARS PER DOCUMENT SUBMITTED, OR FIVE HUNDRED
DOLLARS PER TAX RETURN SUBMITTED. SUCH PENALTY SHALL BE IN ADDITION TO
ANY OTHER PENALTY OR ADDITION PROVIDED BY LAW.
S. 5898 52
S 87. Section 11-2503 of the administrative code of the city of New
York is amended to read as follows:
S 11-2503 Records to be kept. A. Every operator shall keep records of
every occupancy and of all rent paid, charged or due thereon and of the
tax payable thereon, in such form as the commissioner of finance may by
regulation require. Such records shall be available for inspection and
examination at any time upon demand by the commissioner of finance or
his or her duly authorized agent or employee and shall be preserved for
a period of three years, except that the commissioner of finance may
consent to their destruction within that period or may require that they
be kept longer.
B. NOTWITHSTANDING THE PROVISIONS OF SECTION THREE HUNDRED FIVE AND
THREE HUNDRED NINE OF THE STATE TECHNOLOGY LAW OR ANY OTHER LAW, THE
COMMISSIONER MAY REQUIRE ANY PERSON WHO HAS ELECTED TO MAINTAIN IN AN
ELECTRONIC FORMAT ANY PORTION OF THE RECORDS REQUIRED TO BE MAINTAINED
BY THAT PERSON UNDER THIS CHAPTER, TO MAKE THE ELECTRONIC RECORDS AVAIL-
ABLE AND ACCESSIBLE TO THE COMMISSIONER, NOTWITHSTANDING THAT THE
RECORDS ARE ALSO MAINTAINED IN A HARD COPY FORMAT.
S 88. Paragraph 1 of subdivision (d) of section 11-2515 of the admin-
istrative code of the city of New York, as amended by chapter 765 of the
laws of 1985, is amended to read as follows:
(1) If any part of an underpayment of tax is due to fraud, there shall
be added to the tax a penalty equal to [fifty percent of] TWO TIMES the
underpayment.
S 89. Paragraph 2 of subdivision (d) of section 11-2515 of the admin-
istrative code of the city of New York is REPEALED.
S 90. Section 11-2515 of the administrative code of the city of New
York is amended by adding a new subdivision (i) to read as follows:
(I) ANY PERSON REQUIRED TO MAKE OR MAINTAIN RECORDS UNDER THIS CHAPTER
WHO FAILS TO MAKE OR MAINTAIN OR MAKE AVAILABLE TO THE COMMISSIONER
THESE RECORDS IS SUBJECT TO A PENALTY NOT TO EXCEED ONE THOUSAND DOLLARS
FOR THE FIRST QUARTERLY PERIOD OR PART THEREOF FOR WHICH THE FAILURE
OCCURS AND NOT TO EXCEED FIVE THOUSAND DOLLARS FOR EACH ADDITIONAL QUAR-
TERLY PERIOD OR PART THEREOF FOR WHICH THE FAILURE OCCURS. THIS PENALTY
IS IN ADDITION TO ANY OTHER PENALTY PROVIDED FOR IN THIS CHAPTER BUT MAY
NOT BE IMPOSED AND COLLECTED MORE THAN ONCE FOR FAILURES FOR THE SAME
QUARTERLY PERIOD OR PART THEREOF. IF THE COMMISSIONER DETERMINES THAT A
FAILURE TO MAKE OR MAINTAIN OR MAKE AVAILABLE RECORDS IN ANY QUARTERLY
PERIOD WAS ENTIRELY DUE TO REASONABLE CAUSE AND NOT TO WILLFUL NEGLECT,
THE COMMISSIONER MUST REMIT THE PENALTY IMPOSED FOR THAT QUARTERLY PERI-
OD. THESE PENALTIES WILL BE PAID AND DISPOSED OF IN THE SAME MANNER AS
OTHER REVENUES FROM THIS CHAPTER. THESE PENALTIES WILL BE DETERMINED,
ASSESSED, COLLECTED, PAID AND ENFORCED IN THE SAME MANNER AS THE TAX
IMPOSED BY THIS CHAPTER, AND ALL THE PROVISIONS OF THIS CHAPTER RELATING
TO TAX WILL BE DEEMED ALSO TO APPLY TO THE PENALTIES IMPOSED BY THIS
SUBDIVISION. FOR PURPOSES OF THE PENALTY IMPOSED BY THIS SUBDIVISION, A
PERSON WILL BE CONSIDERED TO HAVE FAILED TO MAKE OR MAINTAIN THE
REQUIRED RECORDS WHEN THE COMMISSIONER OF FINANCE DETERMINES THAT THE
RECORDS MADE OR MAINTAINED BY THAT PERSON FOR A QUARTERLY PERIOD DO NOT
ENABLE THE COMMISSIONER TO VERIFY OCCUPANCY OR THE AMOUNTS RECEIVED FOR
SUCH OCCUPANCY OR THE TAXABILITY OF THAT OCCUPANCY AND TO CONDUCT A
COMPLETE AUDIT.
S 91. Section 11-2515 of the administrative code of the city of New
York is amended by adding a new subdivision (j) to read as follows:
(J) ANY PERSON REQUIRED TO MAKE OR MAINTAIN RECORDS UNDER THIS CHAPTER
WHO FAILS TO PRESENT AND MAKE AVAILABLE THESE RECORDS IN AN AUDITABLE
S. 5898 53
FORM IS SUBJECT TO A PENALTY NOT TO EXCEED ONE THOUSAND DOLLARS FOR EACH
QUARTERLY PERIOD OR PART THEREOF FOR WHICH RECORDS MAINTAINED BY THAT
PERSON ARE NOT PRESENTED AND MADE AVAILABLE BY THAT PERSON IN AUDITABLE
FORM, EVEN IF THESE RECORDS ARE ADEQUATE TO VERIFY CREDITS, RECEIPTS,
AND THE TAXABILITY THEREOF AND TO PERFORM A COMPLETE AUDIT. THIS PENALTY
IS IN ADDITION TO ANY OTHER PENALTY PROVIDED FOR IN THIS CHAPTER, BUT
WILL NOT BE IMPOSED AND COLLECTED MORE THAN ONCE FOR THESE FAILURES FOR
THE SAME QUARTERLY PERIOD OR PART THEREOF. IF THE COMMISSIONER DETER-
MINES THAT ANY FAILURE DESCRIBED IN THIS SUBDIVISION FOR A QUARTERLY
PERIOD WAS ENTIRELY DUE TO REASONABLE CAUSE AND NOT TO WILLFUL NEGLECT,
THE COMMISSIONER MUST REMIT THE PENALTY IMPOSED FOR THAT QUARTER. THE
PENALTIES IMPOSED BY THIS SUBDIVISION WILL BE PAID AND DISPOSED OF IN
THE SAME MANNER AS OTHER REVENUES FROM THIS CHAPTER. THESE PENALTIES
WILL BE DETERMINED, ASSESSED, COLLECTED, PAID AND ENFORCED IN THE SAME
MANNER AS THE TAX IMPOSED BY THIS CHAPTER, AND ALL THE PROVISIONS OF
THIS CHAPTER RELATING TO TAX WILL BE DEEMED ALSO TO APPLY TO THE PENAL-
TIES IMPOSED BY THIS SUBDIVISION. FOR PURPOSES OF THE PENALTY IMPOSED BY
THIS SUBDIVISION, A PERSON WILL BE CONSIDERED TO HAVE FAILED TO PRESENT
AND MAKE RECORDS AVAILABLE IN AUDITABLE FORM WHEN THE RECORDS PRESENTED
BY THAT PERSON FOR THAT QUARTER LACK SUFFICIENT ORGANIZATION, SUCH AS BY
DATE, INVOICE NUMBER, SALES RECEIPTS, OR SEQUENTIAL NUMBERING, OR ARE
OTHERWISE INADEQUATE (WITHOUT REORGANIZING, REORDERING OR OTHERWISE
REARRANGING THE RECORDS INTO AN AUDITABLE FORM) TO PERMIT DIRECT RECON-
CILIATION OF THE RECEIPTS, INVOICES OR OTHER SOURCE DOCUMENTS WITH THE
ENTRIES FOR THE QUARTERLY PERIOD IN THE BOOKS AND RECORDS AND ON THE
RETURNS OF THAT PERSON.
S 92. Section 11-2515 of the administrative code of the city of New
York is amended by adding a new subdivision (k) to read as follows:
(K) ANY PERSON WHO, HAVING ELECTED TO MAINTAIN IN AN ELECTRONIC FORMAT
ANY PORTION OR ALL OF THE RECORDS HE OR SHE IS REQUIRED TO MAKE AND
MAINTAIN BY THIS CHAPTER, FAILS TO PRESENT AND MAKE THESE RECORDS AVAIL-
ABLE AND ACCESSIBLE TO THE COMMISSIONER IN ELECTRONIC FORMAT, IS SUBJECT
TO A PENALTY NOT TO EXCEED FIVE THOUSAND DOLLARS FOR EACH QUARTERLY
PERIOD OR PART THEREOF FOR WHICH THESE ELECTRONIC RECORDS ARE NOT
PRESENTED AND MADE AVAILABLE AND ACCESSIBLE UPON REQUEST, NOTWITHSTAND-
ING THAT THE RECORDS MAY ALSO BE MAINTAINED AND AVAILABLE IN HARD COPY
FORMAT. THIS PENALTY IS IN ADDITION TO ANY OTHER PENALTY PROVIDED FOR IN
THIS CHAPTER, BUT MAY NOT BE IMPOSED AND COLLECTED MORE THAN ONCE FOR A
FAILURE FOR THE SAME QUARTERLY PERIOD OR PART THEREOF. PROVIDED, HOWEV-
ER, NOTHING IN THIS SUBDIVISION WILL PREVENT THE SEPARATE IMPOSITION, IF
APPLICABLE, OF ANY PENALTY IMPOSED BY SUBDIVISION (I) OR (J) OF THIS
SECTION FOR THE SAME QUARTERLY PERIOD OR PART THEREOF. IF THE COMMIS-
SIONER DETERMINES THAT THE FAILURE TO PRESENT AND MAKE ELECTRONICALLY
MAINTAINED RECORDS AVAILABLE AND ACCESSIBLE FOR A QUARTERLY PERIOD WAS
ENTIRELY DUE TO REASONABLE CAUSE AND NOT TO WILLFUL NEGLECT, THE COMMIS-
SIONER MUST REMIT THE PENALTY IMPOSED FOR THAT QUARTER. THESE PENALTIES
WILL BE PAID AND DISPOSED OF IN THE SAME MANNER AS OTHER REVENUES FROM
THIS CHAPTER. THESE PENALTIES WILL BE DETERMINED, ASSESSED, COLLECTED,
PAID AND ENFORCED IN THE SAME MANNER AS THE TAX IMPOSED BY THIS CHAPTER,
AND ALL THE PROVISIONS OF THIS CHAPTER RELATING TO TAX WILL BE DEEMED
ALSO TO APPLY TO THE PENALTY IMPOSED BY THIS SUBDIVISION. FOR PURPOSES
OF THE PENALTY IMPOSED BY THIS SUBDIVISION, A FAILURE TO PRESENT AND
MAKE AVAILABLE AND ACCESSIBLE A RECORD MAINTAINED IN ELECTRONIC FORMAT
INCLUDES NOT ONLY THE DENIAL OF ACCESS TO THE REQUESTED RECORDS THAT
WERE MAINTAINED ELECTRONICALLY, BUT ALSO THE FAILURE TO MAKE AVAILABLE
TO THE COMMISSIONER THE INFORMATION, KNOWLEDGE, OR MEANS NECESSARY TO
S. 5898 54
ACCESS AND OTHERWISE USE THE ELECTRONICALLY MAINTAINED RECORDS IN THE
INSPECTION AND EXAMINATION OF THESE RECORDS.
S 93. Section 11-2515 of the administrative code of the city of New
York is amended by adding two new subdivisions (l) and (m) to read as
follows:
(L) AIDING OR ASSISTING IN THE GIVING OF FRAUDULENT RETURNS, REPORTS,
STATEMENTS OR OTHER DOCUMENTS. ANY PERSON WHO, WITH THE INTENT THAT TAX
BE EVADED, FOR A FEE OR OTHER COMPENSATION OR AS AN INCIDENT TO THE
PERFORMANCE OF OTHER SERVICES FOR WHICH THAT PERSON RECEIVES COMPEN-
SATION, AIDS OR ASSISTS IN, OR PROCURES, COUNSELS, OR ADVISES THE PREPA-
RATION OR PRESENTATION UNDER THIS CHAPTER, OR IN CONNECTION WITH ANY
MATTER ARISING UNDER THIS CHAPTER, OF ANY RETURN, REPORT, DECLARATION,
STATEMENT OR OTHER DOCUMENT THAT IS FRAUDULENT OR FALSE AS TO ANY MATE-
RIAL MATTER, OR SUPPLIES ANY FALSE OR FRAUDULENT INFORMATION, WHETHER OR
NOT SUCH FALSITY OR FRAUD IS WITH THE KNOWLEDGE OR CONSENT OF THE PERSON
AUTHORIZED OR REQUIRED TO PRESENT THAT RETURN, REPORT, DECLARATION,
STATEMENT OR OTHER DOCUMENT, WILL PAY A PENALTY NOT EXCEEDING FIVE THOU-
SAND DOLLARS. THE DEFINITIONS IN SUBSECTION (L) OF SECTION ONE THOUSAND
EIGHTY-FIVE OF THE TAX LAW APPLY FOR THE PURPOSES OF THIS PENALTY.
(M) FALSE OR FRAUDULENT DOCUMENT PENALTY. ANY TAXPAYER THAT SUBMITS A
FALSE OR FRAUDULENT DOCUMENT TO THE DEPARTMENT WILL BE SUBJECT TO A
PENALTY OF ONE HUNDRED DOLLARS PER DOCUMENT SUBMITTED, OR FIVE HUNDRED
DOLLARS PER TAX RETURN SUBMITTED. THIS PENALTY WILL BE IN ADDITION TO
ANY OTHER PENALTY PROVIDED BY LAW.
S 94. Subdivision (c) of section 11-4001 of the administrative code of
the city of New York, as added by chapter 765 of the laws of 1985, is
amended to read as follows:
(c) As used in this chapter, the term "felony" and the term "misdemea-
nor" shall have the same meaning as they have in the penal law, and the
disposition of such offenses and the sentences imposed therefor shall be
as provided in such law, except: (1) notwithstanding the provisions of
paragraph a of subdivision one of section 80.00 and paragraph (a) of
subdivision one of section 80.10 of the penal law relating to the fine
for a felony, the court may impose a fine not to exceed THE GREATER OF
DOUBLE THE AMOUNT OF THE UNDERPAID TAX LIABILITY RESULTING FROM THE
COMMISSION OF THE CRIME OR fifty thousand dollars, [except that] OR, in
the case of a corporation the fine may not exceed THE GREATER OF DOUBLE
THE AMOUNT OF THE UNDERPAID TAX LIABILITY RESULTING FROM THE COMMISSION
OF THE CRIME OR two hundred fifty thousand dollars, and (2) notwith-
standing the provisions of subdivision one of section 80.05 and para-
graph (b) of subdivision one of section 80.10 of the penal law relating
to the fine for a class A misdemeanor, the court may impose a fine not
to exceed ten thousand dollars, except that in the case of a corporation
the fine may not exceed twenty thousand dollars.
S 95. Section 11-4001 of the administrative code of the city of New
York is amended by adding a new subdivision (d) to read as follows:
(D) AS USED IN THIS CHAPTER:
(1) "CITY" SHALL MEAN THE CITY OF NEW YORK; AND
(2) "STATE" SHALL MEAN THE STATE OF NEW YORK.
S 96. Section 11-4002 of the administrative code of the city of New
York is REPEALED and a new section 11-4002 is added to read as follows:
S 11-4002 TAX FRAUD ACTS. (A) AS USED IN THIS CHAPTER, "TAX FRAUD ACT"
MEANS WILLFULLY ENGAGING IN AN ACT OR ACTS OR WILLFULLY CAUSING ANOTHER
TO ENGAGE IN AN ACT OR ACTS PURSUANT TO WHICH A PERSON:
(1) FAILS TO MAKE, RENDER, SIGN, CERTIFY, OR FILE ANY RETURN OR REPORT
REQUIRED UNDER THE PROVISIONS OF ANY DESIGNATED CHAPTER OF THIS TITLE OR
S. 5898 55
ANY RULE OR REGULATION PROMULGATED THEREUNDER WITHIN THE TIME REQUIRED
BY OR UNDER THE PROVISIONS OF ANY DESIGNATED CHAPTER OF THIS TITLE OR
SUCH RULE OR REGULATION;
(2) KNOWING THAT A RETURN, REPORT, STATEMENT OR OTHER DOCUMENT UNDER
ANY DESIGNATED CHAPTER OF THIS TITLE CONTAINS ANY MATERIALLY FALSE OR
FRAUDULENT INFORMATION, OR OMITS ANY MATERIAL INFORMATION, FILES OR
SUBMITS THAT RETURN, REPORT, STATEMENT OR DOCUMENT WITH THE CITY OR THE
STATE, OR WITH ANY PUBLIC OFFICE OR PUBLIC OFFICER OF THE CITY OR THE
STATE;
(3) KNOWINGLY SUPPLIES OR SUBMITS MATERIALLY FALSE OR FRAUDULENT
INFORMATION IN CONNECTION WITH ANY RETURN, AUDIT, INVESTIGATION, OR
PROCEEDING OR FAILS TO SUPPLY INFORMATION WITHIN THE TIME REQUIRED BY OR
UNDER THE PROVISIONS OF ANY DESIGNATED CHAPTER OF THIS TITLE OR ANY RULE
OR REGULATION PROMULGATED UNDER ANY DESIGNATED CHAPTER OF THIS TITLE;
(4) ENGAGES IN ANY SCHEME TO DEFRAUD THE CITY OR THE STATE OR A
GOVERNMENT INSTRUMENTALITY OF THE CITY OR OF THE STATE BY FALSE OR FRAU-
DULENT PRETENSES, REPRESENTATIONS OR PROMISES AS TO ANY MATERIAL MATTER,
IN CONNECTION WITH ANY TAX IMPOSED UNDER ANY DESIGNATED CHAPTER OF THIS
TITLE OR ANY MATTER UNDER ANY DESIGNATED CHAPTER OF THIS TITLE;
(5) FAILS TO REMIT ANY TAX COLLECTED IN THE NAME OF THE CITY OR THE
STATE OR ON BEHALF OF THE CITY OR THE STATE WHEN SUCH COLLECTION IS
REQUIRED UNDER ANY DESIGNATED CHAPTER OF THIS TITLE;
(6) FAILS TO COLLECT ANY TAX REQUIRED TO BE COLLECTED UNDER CHAPTER
TWELVE, THIRTEEN, TWENTY-THREE-A, TWENTY-THREE-B OR TWENTY-FIVE OF THIS
TITLE;
(7) WITH INTENT TO EVADE ANY TAX IMPOSED UNDER ANY DESIGNATED CHAPTER
OF THIS TITLE, FAILS TO PAY THAT TAX; OR
(8) ISSUES AN EXEMPTION CERTIFICATE, INTERDISTRIBUTOR SALES CERTIF-
ICATE, RESALE CERTIFICATE, OR ANY OTHER DOCUMENT CAPABLE OF EVIDENCING A
CLAIM THAT TAXES IMPOSED UNDER A DESIGNATED CHAPTER OF THIS TITLE DO NOT
APPLY TO A TRANSACTION, WHICH HE OR SHE DOES NOT BELIEVE TO BE TRUE AND
CORRECT AS TO ANY MATERIAL MATTER, WHICH OMITS ANY MATERIAL INFORMATION,
OR WHICH IS FALSE, FRAUDULENT, OR COUNTERFEIT.
(B) FOR PURPOSES OF THIS SECTION, THE TERM "WILLFULLY" SHALL MEAN
ACTING WITH EITHER INTENT TO DEFRAUD, INTENT TO EVADE THE PAYMENT OF
TAXES OR INTENT TO AVOID A REQUIREMENT OF THIS TITLE, A LAWFUL REQUIRE-
MENT OF THE COMMISSIONER OR A KNOWN LEGAL DUTY.
(C) FOR PURPOSES OF THIS CHAPTER, THE TERM "DESIGNATED CHAPTER" SHALL
MEAN CHAPTER FIVE, SIX, SEVEN, EIGHT, NINE, ELEVEN, TWELVE, THIRTEEN,
FOURTEEN, FIFTEEN, TWENTY-ONE, TWENTY-TWO, TWENTY-THREE-A, TWENTY-FOUR,
TWENTY-FIVE OR TWENTY-SEVEN OF THIS TITLE.
S 97. Section 11-4003 of the administrative code of the city of New
York is REPEALED and a new section 11-4003 is added to read as follows:
S 11-4003 CITY CRIMINAL TAX FRAUD IN THE FIFTH DEGREE. A PERSON
COMMITS CITY CRIMINAL TAX FRAUD IN THE FIFTH DEGREE WHEN HE OR SHE
COMMITS A TAX FRAUD ACT. CITY CRIMINAL TAX FRAUD IN THE FIFTH DEGREE IS
A CLASS A MISDEMEANOR.
S 98. Section 11-4004 of the administrative code of the city of New
York is REPEALED and a new section 11-4004 is added to read as follows:
S 11-4004 CITY CRIMINAL TAX FRAUD IN THE FOURTH DEGREE. A PERSON
COMMITS CITY CRIMINAL TAX FRAUD IN THE FOURTH DEGREE WHEN HE OR SHE
COMMITS A TAX FRAUD ACT OR ACTS AND, WITH THE INTENT TO EVADE ANY TAX
DUE UNDER ANY DESIGNATED CHAPTER OF THIS TITLE, OR TO DEFRAUD THE CITY
OR THE STATE OR ANY INSTRUMENTALITY OF THE CITY OR THE STATE, THE PERSON
PAYS THE CITY OR THE STATE OR ANY PUBLIC OFFICE OR PUBLIC OFFICER OF THE
CITY OR THE STATE OR ANY INSTRUMENTALITY OF THE CITY OR STATE (WHETHER
S. 5898 56
BY MEANS OF UNDERPAYMENT OR RECEIPT OF REFUND OR BOTH), IN A PERIOD OF
NOT MORE THAN ONE YEAR IN EXCESS OF THREE THOUSAND DOLLARS LESS THAN THE
TAX LIABILITY THAT IS DUE. CITY CRIMINAL TAX FRAUD IN THE FOURTH DEGREE
IS A CLASS E FELONY.
S 99. Section 11-4005 of the administrative code of the city of New
York is REPEALED and a new section 11-4005 is added to read as follows:
S 11-4005 CITY CRIMINAL TAX FRAUD IN THE THIRD DEGREE. A PERSON
COMMITS CITY CRIMINAL TAX FRAUD IN THE THIRD DEGREE WHEN HE OR SHE
COMMITS A TAX FRAUD ACT OR ACTS AND, WITH THE INTENT TO EVADE ANY TAX
DUE UNDER ANY DESIGNATED CHAPTER OF THIS TITLE, OR TO DEFRAUD THE CITY
OR THE STATE OR ANY INSTRUMENTALITY OF THE CITY OR THE STATE, THE PERSON
PAYS THE CITY OR THE STATE OR ANY PUBLIC OFFICE OR PUBLIC OFFICER OF THE
CITY OR THE STATE OR ANY INSTRUMENTALITY OF THE CITY OR STATE (WHETHER
BY MEANS OF UNDERPAYMENT OR RECEIPT OF REFUND OR BOTH), IN A PERIOD OF
NOT MORE THAN ONE YEAR IN EXCESS OF TEN THOUSAND DOLLARS LESS THAN THE
TAX LIABILITY THAT IS DUE. CITY CRIMINAL TAX FRAUD IN THE THIRD DEGREE
IS A CLASS D FELONY.
S 100. Section 11-4006 of the administrative code of the city of New
York is REPEALED and a new section 11-4006 is added to read as follows:
S 11-4006 CITY CRIMINAL TAX FRAUD IN THE SECOND DEGREE. A PERSON
COMMITS CITY CRIMINAL TAX FRAUD IN THE SECOND DEGREE WHEN HE OR SHE
COMMITS A TAX FRAUD ACT OR ACTS AND, WITH THE INTENT TO EVADE ANY TAX
DUE UNDER ANY DESIGNATED CHAPTER OF THIS TITLE, OR TO DEFRAUD THE CITY
OR THE STATE OR ANY INSTRUMENTALITY OF THE CITY OR THE STATE, THE PERSON
PAYS THE CITY OR THE STATE OR ANY PUBLIC OFFICE OR PUBLIC OFFICER OF THE
CITY OR THE STATE OR ANY INSTRUMENTALITY OF THE CITY OR STATE (WHETHER
BY MEANS OF UNDERPAYMENT OR RECEIPT OF REFUND OR BOTH), IN A PERIOD OF
NOT MORE THAN ONE YEAR IN EXCESS OF FIFTY THOUSAND DOLLARS LESS THAN THE
TAX LIABILITY THAT IS DUE. CITY CRIMINAL TAX FRAUD IN THE SECOND DEGREE
IS A CLASS C FELONY.
S 101. Section 11-4010 of the administrative code of the city of New
York is REPEALED and section 11-4007 of the administrative code of the
city of New York is renumbered section 11-4010.
S 102. The administrative code of the city of New York is amended by
adding a new section 11-4007 to read as follows:
S 11-4007 CITY CRIMINAL TAX FRAUD IN THE FIRST DEGREE. A PERSON
COMMITS CITY CRIMINAL TAX FRAUD IN THE FIRST DEGREE WHEN HE OR SHE
COMMITS A TAX FRAUD ACT OR ACTS AND, WITH THE INTENT TO EVADE ANY TAX
DUE UNDER ANY DESIGNATED CHAPTER OF THIS TITLE, OR TO DEFRAUD THE CITY
OR THE STATE OR ANY INSTRUMENTALITY OF THE CITY OR THE STATE, THE PERSON
PAYS THE CITY OR THE STATE OR ANY PUBLIC OFFICE OR PUBLIC OFFICER OF THE
CITY OR THE STATE OR ANY INSTRUMENTALITY OF THE CITY OR STATE (WHETHER
BY MEANS OF UNDERPAYMENT OR RECEIPT OF REFUND OR BOTH), IN A PERIOD OF
NOT MORE THAN ONE YEAR IN EXCESS OF ONE MILLION DOLLARS LESS THAN THE
TAX LIABILITY THAT IS DUE. CITY CRIMINAL TAX FRAUD IN THE FIRST DEGREE
IS A CLASS B FELONY.
S 103. Section 11-4008 of the administrative code of the city of New
York is REPEALED and a new section 11-4008 is added to read as follows:
S 11-4008 AGGREGATION. FOR PURPOSES OF THIS CHAPTER, THE PAYMENTS DUE
AND NOT PAID UNDER ANY DESIGNATED CHAPTER OF THIS TITLE PURSUANT TO A
COMMON SCHEME OR PLAN OR DUE AND NOT PAID, WITHIN ONE YEAR, MAY BE
CHARGED IN A SINGLE COUNT, AND THE AMOUNT OF UNDERPAID TAX LIABILITY
INCURRED, WITHIN ONE YEAR, MAY BE AGGREGATED IN A SINGLE COUNT.
S 104. Section 11-4009 of the administrative code of the city of New
York is REPEALED and a new section 11-4009 is added to read as follows:
S. 5898 57
S 11-4009 NON-PREEMPTION; PENAL LAW ANTICIPATORY OFFENSES AND ACCESSO-
RIAL LIABILITY APPLY. (A) UNLESS EXPRESSLY STATED OTHERWISE, THE PENAL-
TIES PROVIDED IN THIS CHAPTER OR UNDER ANY OTHER CHAPTER OF THIS TITLE
SHALL NOT PRECLUDE PROSECUTION FOR ANY OFFENSE UNDER THE PENAL LAW OR
ANY OTHER CRIMINAL STATUTE.
(B) THE OFFENSES SPECIFIED IN TITLE G OF THE PENAL LAW AND THE
PROVISIONS OF ARTICLE TWENTY OF THE PENAL LAW ARE APPLICABLE TO ALL
OFFENSES DEFINED IN THIS CHAPTER.
S 105. Subdivision (a) of section 11-4012 of the administrative code
of the city of New York, as added by chapter 765 of the laws of 1985 and
paragraph 2 as amended by chapter 508 of the laws of 2004, is amended to
read as follows:
(a) Attempt to evade or defeat tax. [(1) Any person who willfully
attempts in any manner to evade or defeat any tax imposed by chapter
thirteen of this title or the payment thereof shall, in addition to
other penalties provided by law, be guilty of a misdemeanor.
(2)] Any person who willfully attempts in any manner to evade or
defeat any tax imposed by chapter thirteen of this title or payment
thereof WHERE: (1) SUCH TAX IS UNPAID on ten thousand cigarettes or more
or (2) SUCH PERSON has previously been convicted two or more times of a
[violation of paragraph one of this subdivision] CRIME SET FORTH IN THIS
CHAPTER RELATING TO CIGARETTE TAXES; shall be guilty of a class E felo-
ny.
S 106. Subdivision (f) of section 11-4012 of the administrative code
of the city of New York, as amended by local law number 2 of the city of
New York for the year 2000, is amended to read as follows:
(f) Any willful act or omission, other than those described in SECTION
11-4002 OF THIS CHAPTER OR subdivision (a), (b), (c), (d), (e) or (g) of
this section, by any person which constitutes a violation of any
provision of chapter thirteen of this title or subchapter one of chapter
two of title twenty of the code shall constitute a misdemeanor.
S 107. Section 11-4016 of the administrative code of the city of New
York, as added by chapter 765 of the laws of 1985, is amended to read as
follows:
S 11-4016 Hotel room occupancy tax. (a) [Any person required under
chapter twenty-five of this title to make any return or report, who
willfully fails to make such return or report at the time or times so
required, shall be guilty of a misdemeanor.
(b) The penalties provided for in this section shall not preclude
prosecution pursuant to the penal law with respect to the willful fail-
ure of any person to pay over to the city any hotel room occupancy tax
imposed by chapter twenty-five of this title, whenever such person has
been required to collect and has collected any such tax. In any such
prosecution under the penal law, a person who has been required to
collect and has collected any such tax shall be deemed to have acted in
a fiduciary character with respect to the city, and the tax collected
shall be deemed to have been entrusted to such person by the city.
(c)] Any person who willfully fails to file a registration certificate
as required pursuant to the provisions of chapter twenty-five of this
title and such data in connection therewith as the commissioner of
finance by regulation or otherwise may require, or willfully fails to
display or surrender a certificate of authority as required by chapter
twenty-five of this title, or willfully assigns or transfers such
certificate of authority, shall be guilty of a misdemeanor, provided,
however, that the provisions of this subdivision shall not apply to a
S. 5898 58
failure to surrender a certificate of authority which is required to be
surrendered where business never commenced.
[(d)] (B) Any person who willfully fails to charge separately the tax
imposed under chapter twenty-five or willfully fails to state such tax
separately on any bill, statement, memorandum or receipt issued or
employed by such person upon which the tax is required to be stated
separately as provided in such chapter, or who shall refer or cause
reference to be made to this tax in a form or manner other than required
by such chapter, shall be guilty of a misdemeanor.
S 108. Section 11-508 of the administrative code of the city of New
York is amended by adding a new subdivision (e-3) to read as follows:
(E-3) RULES FOR RECEIPTS FOR SERVICES PERFORMED BY REGISTERED SECURI-
TIES OR COMMODITIES BROKERS OR DEALERS.
(1) FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND EIGHT, IN THE CASE
OF A TAXPAYER WHICH IS A REGISTERED SECURITIES OR COMMODITIES BROKER OR
DEALER, FOR PURPOSES OF PARAGRAPH THREE OF SUBDIVISION (C) OF THIS
SECTION, THE RECEIPTS SPECIFIED IN SUBPARAGRAPHS (A) THROUGH (G) OF THIS
PARAGRAPH SHALL BE DEEMED TO ARISE FROM SERVICES PERFORMED WITHIN THE
CITY TO THE EXTENT SET FORTH IN SUCH SUBPARAGRAPHS.
(A) RECEIPTS CONSTITUTING BROKERAGE COMMISSIONS DERIVED FROM THE
EXECUTION OF SECURITIES OR COMMODITIES PURCHASE OR SALES ORDERS FOR THE
ACCOUNTS OF CUSTOMERS SHALL BE DEEMED TO ARISE FROM SERVICES PERFORMED
AT THE MAILING ADDRESS IN THE RECORDS OF THE TAXPAYER OF THE CUSTOMER
WHO IS RESPONSIBLE FOR PAYING SUCH COMMISSIONS.
(B) RECEIPTS CONSTITUTING MARGIN INTEREST EARNED ON BEHALF OF BROKER-
AGE ACCOUNTS SHALL BE DEEMED TO ARISE FROM SERVICES PERFORMED AT THE
MAILING ADDRESS IN THE RECORDS OF THE TAXPAYER OF THE CUSTOMER WHO IS
RESPONSIBLE FOR PAYING SUCH MARGIN INTEREST.
(C) GROSS INCOME, INCLUDING ANY ACCRUED INTEREST OR DIVIDENDS, FROM
PRINCIPAL TRANSACTIONS FOR THE PURCHASE OR SALE OF STOCKS, BONDS,
FOREIGN EXCHANGE AND OTHER SECURITIES OR COMMODITIES (INCLUDING FUTURES
AND FORWARD CONTRACTS, OPTIONS AND OTHER TYPES OF SECURITIES OR COMMOD-
ITIES DERIVATIVES CONTRACTS) SHALL BE DEEMED TO ARISE FROM SERVICES
PERFORMED WITHIN THE CITY EITHER (I) TO THE EXTENT THAT PRODUCTION CRED-
ITS ARE AWARDED TO BRANCHES, OFFICES OR EMPLOYEES OF THE TAXPAYER WITHIN
THE CITY AS A RESULT OF SUCH PRINCIPAL TRANSACTIONS OR (II) IF THE
TAXPAYER SO ELECTS, TO THE EXTENT THAT THE GROSS PROCEEDS FROM SUCH
PRINCIPAL TRANSACTIONS (DETERMINED WITHOUT DEDUCTION FOR ANY COST
INCURRED BY THE TAXPAYER TO ACQUIRE THE SECURITIES OR COMMODITIES) ARE
GENERATED FROM SALES OF SECURITIES OR COMMODITIES TO CUSTOMERS WITHIN
THE CITY BASED UPON THE MAILING ADDRESSES OF SUCH CUSTOMERS IN THE
RECORDS OF THE TAXPAYER. FOR PURPOSES OF CLAUSE (II) OF THIS SUBPARA-
GRAPH, THE TAXPAYER SHALL SEPARATELY CALCULATE SUCH GROSS INCOME FROM
PRINCIPAL TRANSACTIONS BY TYPE OF SECURITY OR COMMODITY. FOR PURPOSES OF
THIS SUBPARAGRAPH, GROSS INCOME FROM PRINCIPAL TRANSACTIONS SHALL BE
DETERMINED AFTER THE DEDUCTION OF ANY COST INCURRED BY THE TAXPAYER TO
ACQUIRE THE SECURITIES OR COMMODITIES. FOR PURPOSES OF THIS SUBDIVISION,
THE TERM "PRODUCTION CREDITS" MEANS CREDITS GRANTED PURSUANT TO THE
INTERNAL ACCOUNTING SYSTEM USED BY THE TAXPAYER TO MEASURE THE AMOUNT OF
REVENUE THAT SHOULD BE AWARDED TO A PARTICULAR BRANCH OR OFFICE OR
EMPLOYEE OF THE TAXPAYER WHICH IS BASED, AT LEAST IN PART, ON THE
BRANCH'S, THE OFFICE'S OR THE EMPLOYEE'S PARTICULAR ACTIVITIES. UPON
REQUEST, THE TAXPAYER SHALL BE REQUIRED TO FURNISH A DETAILED EXPLANA-
TION OF SUCH INTERNAL ACCOUNTING SYSTEM TO THE DEPARTMENT.
(D) (I) RECEIPTS CONSTITUTING FEES EARNED BY THE TAXPAYER FOR ADVISORY
SERVICES TO A CUSTOMER IN CONNECTION WITH THE UNDERWRITING OF SECURITIES
S. 5898 59
FOR SUCH CUSTOMER (SUCH CUSTOMER BEING THE ENTITY WHICH IS CONTEMPLATING
ISSUING OR IS ISSUING SECURITIES) OR FEES EARNED BY THE TAXPAYER FOR
MANAGING AN UNDERWRITING SHALL BE DEEMED TO ARISE FROM SERVICES
PERFORMED AT THE MAILING ADDRESS IN THE RECORDS OF THE TAXPAYER OF SUCH
CUSTOMER WHO IS RESPONSIBLE FOR PAYING SUCH FEES.
(II) RECEIPTS CONSTITUTING THE PRIMARY SPREAD OR SELLING CONCESSION
FROM UNDERWRITTEN SECURITIES SHALL BE DEEMED TO ARISE FROM SERVICES
PERFORMED WITHIN THE CITY TO THE EXTENT THAT PRODUCTION CREDITS ARE
AWARDED TO BRANCHES, OFFICES OR EMPLOYEES OF THE TAXPAYER WITHIN THE
CITY AS A RESULT OF THE SALE OF THE UNDERWRITTEN SECURITIES.
(III) THE TERM "PRIMARY SPREAD" MEANS THE DIFFERENCE BETWEEN THE PRICE
PAID BY THE TAXPAYER TO THE ISSUER OF THE SECURITIES BEING MARKETED AND
THE PRICE RECEIVED FROM THE SUBSEQUENT SALE OF THE UNDERWRITTEN SECURI-
TIES AT THE INITIAL PUBLIC OFFERING PRICE, LESS ANY SELLING CONCESSION
AND ANY FEES PAID TO THE TAXPAYER FOR ADVISORY SERVICES OR ANY MANAGER'S
FEES, IF SUCH FEES ARE NOT PAID BY THE CUSTOMER TO THE TAXPAYER SEPA-
RATELY. THE TERM "PUBLIC OFFERING PRICE" MEANS THE PRICE AGREED UPON BY
THE TAXPAYER AND THE ISSUER AT WHICH THE SECURITIES ARE TO BE OFFERED TO
THE PUBLIC. THE TERM "SELLING CONCESSION" MEANS THE AMOUNT PAID TO THE
TAXPAYER FOR PARTICIPATING IN THE UNDERWRITING OF A SECURITY WHERE THE
TAXPAYER IS NOT THE LEAD UNDERWRITER.
(E) RECEIPTS CONSTITUTING INTEREST EARNED BY THE TAXPAYER ON LOANS AND
ADVANCES MADE BY THE TAXPAYER TO AN ENTITY AFFILIATED WITH THE TAXPAYER
SHALL BE DEEMED TO ARISE FROM SERVICES PERFORMED AT THE PRINCIPAL PLACE
OF BUSINESS OF SUCH AFFILIATED ENTITY. FOR PURPOSES OF THIS SUBPARA-
GRAPH, AN ENTITY SHALL BE CONSIDERED AFFILIATED WITH THE TAXPAYER IF
SUCH ENTITY AND THE TAXPAYER HAVE EIGHTY PERCENT OR MORE COMMON DIRECT
OR INDIRECT, ACTUAL OR BENEFICIAL OWNERSHIP.
(F) RECEIPTS CONSTITUTING ACCOUNT MAINTENANCE FEES SHALL BE DEEMED TO
ARISE FROM SERVICES PERFORMED AT THE MAILING ADDRESS IN THE RECORDS OF
THE TAXPAYER OF THE CUSTOMER WHO IS RESPONSIBLE FOR PAYING SUCH ACCOUNT
MAINTENANCE FEES.
(G) RECEIPTS CONSTITUTING FEES FOR MANAGEMENT OR ADVISORY SERVICES,
INCLUDING FEES FOR ADVISORY SERVICES IN RELATION TO MERGER OR ACQUISI-
TION ACTIVITIES, BUT EXCLUDING FEES PAID FOR SERVICES DESCRIBED IN PARA-
GRAPH ONE OF SUBDIVISION (E-2) OF THIS SECTION, SHALL BE DEEMED TO ARISE
FROM SERVICES PERFORMED AT THE MAILING ADDRESS IN THE RECORDS OF THE
TAXPAYER OF THE CUSTOMER WHO IS RESPONSIBLE FOR PAYING SUCH FEES.
(2) FOR PURPOSES OF THIS SUBDIVISION, THE TERM "SECURITIES" SHALL HAVE
THE SAME MEANING AS IN SECTION 475(C)(2) OF THE INTERNAL REVENUE CODE
AND THE TERM "COMMODITIES" SHALL HAVE THE SAME MEANING AS IN SECTION
475(E)(2) OF SUCH CODE. THE TERM "REGISTERED SECURITIES OR COMMODITIES
BROKER OR DEALER" MEANS A BROKER OR DEALER REGISTERED AS SUCH BY THE
SECURITIES AND EXCHANGE COMMISSION OR THE COMMODITIES FUTURES TRADING
COMMISSION, AND SHALL INCLUDE AN OTC DERIVATIVES DEALER AS DEFINED UNDER
REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION AT TITLE 17, PART
240, SECTION 3B-12 OF THE CODE OF FEDERAL REGULATIONS (17 CFR
240.3B-12).
(3) IF THE TAXPAYER RECEIVES ANY OF THE RECEIPTS ENUMERATED IN PARA-
GRAPH (1) OF THIS SUBDIVISION AS A RESULT OF A SECURITIES CORRESPONDENT
RELATIONSHIP SUCH TAXPAYER HAS WITH ANOTHER REGISTERED SECURITIES OR
COMMODITIES BROKER OR DEALER WITH THE TAXPAYER ACTING IN THIS RELATION-
SHIP AS THE CLEARING FIRM, SUCH RECEIPTS SHALL BE DEEMED TO ARISE FROM
SERVICES PERFORMED WITHIN THE CITY TO THE EXTENT SET FORTH IN EACH OF
THE SUBPARAGRAPHS IN PARAGRAPH (1) OF THIS SUBDIVISION. THE AMOUNT OF
SUCH RECEIPTS SHALL EXCLUDE THE AMOUNT THE TAXPAYER IS REQUIRED TO PAY
S. 5898 60
TO THE CORRESPONDENT FIRM FOR SUCH CORRESPONDENT RELATIONSHIP. IF THE
TAXPAYER RECEIVES ANY OF THE RECEIPTS ENUMERATED IN PARAGRAPH (1) OF
THIS SUBDIVISION AS A RESULT OF A SECURITIES CORRESPONDENT RELATIONSHIP
SUCH TAXPAYER HAS WITH ANOTHER REGISTERED SECURITIES OR COMMODITIES
BROKER OR DEALER WITH THE TAXPAYER ACTING IN THIS RELATIONSHIP AS THE
INTRODUCING FIRM, SUCH RECEIPTS SHALL BE DEEMED TO ARISE FROM SERVICES
PERFORMED WITHIN THE CITY TO THE EXTENT SET FORTH IN EACH OF THE SUBPAR-
AGRAPHS IN PARAGRAPH (1) OF THIS SUBDIVISION.
(4) IF, FOR PURPOSES OF SUBPARAGRAPH (A), (B), (F), OR (G) OF PARA-
GRAPH (1) OF THIS SUBDIVISION, AND CLAUSE (I) OF SUBPARAGRAPH (C) OF
PARAGRAPH (1) OF THIS SUBDIVISION, THE TAXPAYER IS UNABLE FROM ITS
RECORDS TO DETERMINE THE MAILING ADDRESS OF THE CUSTOMER, THE RECEIPTS
DESCRIBED IN ANY OF SUCH SUBPARAGRAPHS AND SUCH CLAUSE SHALL BE DEEMED
TO ARISE FROM SERVICES PERFORMED AT THE BRANCH OR OFFICE OF THE TAXPAYER
THAT GENERATES THE TRANSACTION FOR THE CUSTOMER THAT GENERATED SUCH
RECEIPTS.
S 109. This act shall take effect immediately, provided, however, that
sections two, four through seventeen, nineteen, twenty, twenty-four
through thirty-four, seventy-eight, seventy-nine, eighty-one, eighty-two
and one hundred eight of this act shall apply to taxable years or taxa-
ble periods beginning on or after January 1, 2009; sections twenty-one
through twenty-three of this act shall apply to taxable years beginning
on or after January 1, 2011; section thirty-five of this act shall apply
to taxable periods beginning on or after January 1, 2009; sections
seventy-three through seventy-seven of this act shall take effect Octo-
ber 1, 2009; sections eighty-seven and ninety through ninety-three of
this act shall apply to actions taken, omissions and failures occurring
on and after the effective date of this act, except that subdivision (i)
of section 11-2515 of the administrative code of the city of New York,
as added by section ninety of this act, shall only apply to records
required to be made and maintained for periods commencing on or after
such date; sections eighty-four, eighty-five, eighty-eight and eighty-
nine of this act shall apply to taxable periods beginning more than 30
days after the date on which this act shall have become a law; and
sections ninety-four through one hundred seven of this act shall apply
to offenses committed on and after the effective date of this act;
provided further, however, that sections thirty-nine through seventy-two
of this act shall apply to the interest chargeable or due on taxes or on
any other amounts, or any portion thereof, which remain or become due on
or after the effective date of this act; notwithstanding any other
provision of law, for the calendar quarter in which this act becomes a
law, the New York city department of finance may provide appropriate
general notice of the new interest rates for the remainder of such
calendar quarter within twenty days after the date on which this act
shall have become a law, without needing to have notice of the rates
published in advance in the City Record, and shall cause such a notice
to be published in the City Record as soon as is practicable; provided,
however, that if this act becomes a law less than thirty days before the
end of such calendar quarter, such department may also provide appropri-
ate general notice of such new interest rates for the subsequent calen-
dar quarter at the same time it provides general notice for the remain-
der of such quarter, without needing to have notice of the rates
published in advance in the City Record, and shall cause such a notice
to be published in the City Record as soon as is practicable.