§ 4. Computation of tax. * 1. The tax imposed by subdivision one of
section three of this part shall be, in the case of each taxpayer: (a) a
tax (1) for taxable years beginning on or after January first, nineteen
hundred seventy-eight but before January first, nineteen hundred
eighty-seven, computed at the rate of nine per centum, and for taxable
years beginning on or after January first, nineteen hundred
eighty-seven, computed at the rate of eight and eighty-five one
hundredths per centum on its entire net income, or the portion thereof
allocated within the city as hereinafter provided, subject to any
modification required by paragraph (d) of subdivision three of this
section, or (2) computed at one and one-half mills for each dollar of
its total business and investment capital, or the portion thereof
allocated within the city as hereinafter provided, except that in the
case of a cooperative housing corporation as defined in the internal
revenue code, the applicable rate shall be four-tenths of one mill, or
(3) for taxable years beginning on or after January first, nineteen
hundred seventy-eight but before January first, nineteen hundred
eighty-seven, computed at the rate of nine per centum, and for taxable
years beginning on or after January first, nineteen hundred
eighty-seven, computed at the rate of eight and eighty-five one
hundredths per centum on thirty per centum of the taxpayer's entire net
income plus salaries and other compensation paid to the taxpayer's
elected or appointed officers and to every stockholder owning in excess
of five per centum of its issued capital stock minus fifteen thousand
dollars (except as hereinafter provided) and any net loss for the
reported year, or on the portion of such sum allocated within the city
as hereinafter provided for the allocation of entire net income, subject
to any modification required by paragraph (d) of subdivision three of
this section, or (4) one hundred twenty-five dollars, whichever is the
greatest, plus (b) a tax computed at the rate of three-quarters of a
mill for each dollar of the portion of its subsidiary capital allocated
within the city as hereinafter provided. In the case of a taxpayer which
is not subject to tax for an entire year, or which elects to compute its
tax pursuant to paragraph (b) of subdivision six of section three, the
exemption allowed in clause three of paragraph (a) shall be prorated
according to the period such taxpayer was subject to tax or, in the case
of such an election, the period for which its entire net income is
determined pursuant to such paragraph (b) of subdivision six of section
three.

* NB Effective until December 31, 2020

* 1. The tax imposed by subdivision one of section three of this part
shall be, in the case of each taxpayer: (a) a tax (1) computed at the
rate of five and one-half per centum, or as an alternative for taxable
years beginning on or after January first, nineteen hundred seventy-one,
at the rate of six and seven-tenths per centum, on its entire net
income, or the portion thereof allocated within the city as hereinafter
provided, subject to any modification required by paragraph (d) of
subdivision three of this section, or (2) computed at one mill for each
dollar of its total business and investment capital, or the portion
thereof allocated within the city as hereinafter provided, except that
in the case of a cooperative housing corporation as defined in the
internal revenue code, the applicable rate shall be one-quarter of one
mill, or (3) computed at the rate of five and one-half per centum, or as
an alternative for taxable years beginning on or after January first,
nineteen hundred seventy-one, at the rate of six and seven-tenths per
centum, on thirty per centum of the taxpayer's entire net income plus
salaries and other compensation paid to the taxpayer's elected or
appointed officers and to every stockholder owning in excess of five per
centum of its issued capital stock minus fifteen thousand dollars
(except as hereinafter provided) and any net loss for the reported year,
or on the portion of such sum allocated within the city as hereinafter
provided for the allocation of entire net income, subject to any
modification required by paragraph (d) of subdivision three of this
section, or (4) twenty-five dollars, whichever is the greatest, plus (b)
a tax computed at the rate of one-half mill for each dollar of the
portion of its subsidiary capital allocated within the city as
hereinafter provided. In the case of a taxpayer which is not subject to
tax for an entire year, or which elects to compute its tax pursuant to
paragraph (b) of subdivision six of section three, the exemption allowed
in clause three of paragraph (a) shall be prorated according to the
period such taxpayer was subject to tax or, in the case of such an
election, the period for which its entire net income is determined
pursuant to such paragraph (b) of subdivision six of section three.

* NB Effective December 31, 2020

2. The amount of subsidiary capital, investment capital and business
capital shall each be determined by taking the average fair market value
of the gross assets included therein (less, in the case of business
capital, average liabilities deductible therefrom which are payable by
their terms on demand or within one year from the date incurred, other
than loans or advances outstanding for more than a year as of any date
during the year covered by the report), and, if the period covered by
the report is other than a period of twelve calendar months, by
multiplying such value by the number of calendar months or major parts
thereof included in such period, and dividing the product thus obtained
by twelve.

3. The portion of the entire net income of a taxpayer to be allocated
within the city shall be determined as follows:

(a) multiply its business income by a business allocation percentage
to be determined by

(1) ascertaining the percentage which the average value of the
taxpayer's real and tangible personal property within the city during
the period covered by its report bears to the average value of all the
taxpayer's real and tangible personal property wherever situated during
such period;

(2) ascertaining the percentage which the receipts of the taxpayer,
computed on the cash or accrual basis according to the method of
accounting used in the computation of its entire net income, arising
during such period from

(A) sales of its tangible personal property located within the city at
the time of the receipt of or appropriation to the orders, where
shipments are made to points within the city,

(B) sales of its tangible personal property not located at the time of
the receipt of or appropriation to the orders at any permanent or
continuous place of business maintained by the taxpayer without the city
where the orders were received or accepted within the city and where
shipments are made to points within the city,

(C) sales of its tangible personal property located within the city at
the time of the receipt of or appropriation to the orders where shipment
is made to points outside of the city and sales of its tangible personal
property (except sales described in clause (B)) located without the city
at the time of the receipt of or appropriation to the orders where
shipment is made to points within the city, but only to the extent of
fifty per centum of the receipts from the sales referred to in this
clause,

(D) sales of its tangible personal property not located at the time of
the receipt of or appropriation to the orders at any permanent or
continuous place of business maintained by the taxpayer without the
city, where the orders were received or accepted within the city and
where shipment is made between points outside the city, but only to the
extent of fifty per centum of the receipts from the sales referred to in
this clause. For purposes of this clause and clause (B) an order shall
be deemed received or accepted within the city if it has been received
or accepted by an employee, agent, agency or independent contractor
chiefly situated at, connected with, by contract or otherwise, or sent
out from a permanent or continuous place of business of the taxpayer
within the city,

(E) services performed within the city,

(F) rentals from property situated and royalties from the use of
patents or copyrights, within the city, and

(G) all other business receipts earned within the city,
bear to the total amount of the taxpayer's receipts, similarly computed,
arising during such period from all sales of its tangible personal
property, services, rentals, royalties and all other business
transactions, whether within or without the city;

(3) ascertaining the percentage of the total wages, salaries and other
personal service compensation, similarly computed, during such period of
employees within the city, except general executive officers, to the
total wages, salaries and other personal service compensation, similarly
computed, during such period of all the taxpayer's employees within and
without the city, except general executive officers, and

(4) adding together the percentages so determined and dividing the
result by the number of percentages; provided, however, that if the
taxpayer does not have a regular place of business outside the city
other than a statutory office, the business allocation percentage shall
be one hundred per centum; and

(b) multiply its investment income by an investment allocation
percentage to be determined by

(1) multiplying the amount of its investment capital invested in each
stock, bond or other security (other than governmental securities)
during the period covered by its report by the percentage, if any, of
the entire capital or the issued capital stock, or the gross direct
premiums, or the net income, as the case may be, of the issuer or
obligor thereof required to be allocated within the city on the report
or reports, if any, required of any such issuer or obligor under part
II, part III, part IV, or part V or under a local law of the city
imposing a tax on utilities for the preceding year, provided, however,
that for taxable years ending in or with calendar year nineteen hundred
sixty-six, such percentage shall be presumed to be that percentage, if
any, of the entire capital or the issued capital stock, or the gross
direct premiums, or the net income, as the case may be, of the issuer or
obligor thereof required to be allocated within the state on the report
or reports, if any, required of any such issuer or obligor under the tax
law or the insurance law for the preceding year, unless the taxpayer
establishes the actual percentage which such issuer or obligor would
have been required to allocate within the city had part II, part III,
part IV, or part V been in effect for such year, or which such issuer or
obligor did allocate within the city under a local law of the city
imposing a tax on utilities, but without regard to any minimum,

(2) adding together the sum so obtained, and

(3) dividing the result so obtained by the total of its investment
capital invested during such period in stocks, bonds and other
securities (other than obligations of the United States and its
instrumentalities and obligations of the state of New York, its
political subdivisions and its instrumentalities); provided, however,
that in case any investment capital is invested in any stock, bond or
other security during only a portion of the period covered by the
report, only such portion of such capital shall be taken into account;
and provided further, that if a taxpayer's investment allocation
percentage is zero, interest received on bank accounts, on obligations
of the United States and its instrumentalities and on obligations of the
state of New York, its political subdivisions and its instrumentalities
shall be multiplied by its business allocation percentage; and

(c) add the products so obtained.

(d) At the election of the taxpayer there shall be deducted from the
portion of its entire net income allocated within the city either or
both of the items set forth in subparagraphs one and two of this
paragraph, except that only one of such deductions shall be allowed with
respect to any one items of property.

(1) Depreciation with respect to any property such as described in
subparagraph three of this paragraph, not exceeding twice the
depreciation allowed with respect to the same property for federal
income tax purposes. Such deduction shall be allowed only upon condition
that entire net income be computed without any deduction for the
depreciation of the same property, and the total of all deductions
allowed pursuant to the preceding sentence in any taxable year or years
with respect to any property shall not exceed its cost or other basis.

(2) Expenditures paid or incurred during the taxable year for the
construction, reconstruction, erection or acquisition of any property
such as described in subparagraph three of this paragraph which is used
or to be used for purposes of research and development in the
experimental or laboratory sense. Such purposes shall not be deemed to
include the ordinary testing or inspection of materials or products for
quality control, efficiency surveys, management studies, consumer
surveys, advertising, promotions or research in connection with
literary, historical or similar projects. Such deduction shall be
allowed only on condition that entire net income for the taxable year
and all succeeding taxable years be computed without the deduction of
any such expenditures and without any deduction for depreciation of the
same property, except to the extent that its basis may be attributable
to factors other than such expenditures, or in case a deduction is
allowable pursuant to this subparagraph for only a part of such
expenditures, on condition that any deduction allowed for federal income
tax purposes on account of such expenditures or on account of
depreciation of the same property be proportionately reduced in
computing entire net income for the taxable year and all succeeding
taxable years. With respect to property which is used or to be used for
research and development only in part, or during only part of its useful
life, a proportionate part of such expenditures shall be deductible. If
all or part of such expenditures with respect to any property shall have
been deducted as provided herein, and such property is used for purposes
other than research and development to a greater extent than originally
reported, the taxpayer shall report such use in its report for the first
taxable year during which it occurs, and the director of finance may
recompute the tax for the year or years for which such deduction was
allowed, and may assess any additional tax resulting from such
recomputation regardless of the time limitations set forth in section
seventy-four of this title.

(3) Such deductions shall be allowed only with respect to tangible
property which is depreciable pursuant to section one hundred
sixty-seven of the internal revenue code, having a situs in the city and
used in the taxpayer's trade or business, (A) the construction,
reconstruction or erection of which is completed after December
thirty-first, nineteen hundred sixty-five, and then only with respect to
that portion of the basis thereof or the expenditures relating thereto
which is properly attributable to such construction, reconstruction or
erection after December thirty-first, nineteen hundred sixty-five, or
(B) acquired after December thirty-first, nineteen hundred sixty-five by
purchase as defined in section one hundred seventy-nine (d) of the
internal revenue code, if the original use of such property commenced
with the taxpayer, commenced in the city and commenced after such date.

(4) If the deductions allowable for any taxable year, pursuant to this
subdivision, exceed the portion of the taxpayer's entire net income
allocated to the city for such year, the excess may be carried over to
the following taxable year or years and may be deducted from the portion
of the taxpayer's entire net income allocated to the city for such year
or years.

(5) In any taxable year when property is sold or otherwise disposed
of, with respect to which a deduction has been allowed pursuant to
subparagraph one or two of this paragraph, the gain or loss thereon
entering into the computation of federal taxable income shall be
disregarded in computing entire net income, and there shall be added to
or subtracted from the portion of entire net income allocated within the
city the gain or loss upon such sale or other disposition. In computing
such gain or loss the basis of the property sold or disposed of shall be
adjusted to reflect the deduction allowed with respect to such property
pursuant to subparagraph one or two of this paragraph. Provided,
however, that no loss shall be recognized for the purposes of this
subparagraph with respect to a sale or other disposition of property to
a person whose acquisition thereof is not a purchase as defined in
section one hundred seventy-nine (d) of the internal revenue code.

4. The portion of the business capital of a taxpayer to be allocated
within the city shall be determined by multiplying the amount thereof by
the business allocation percentage determined as hereinabove provided.

5. The portion of the investment capital of a taxpayer to be allocated
within the city shall be determined by multiplying the amount thereof by
the investment allocation percentage determined as hereinabove provided.

6. Any taxpayer not taxed upon the basis of a combined report, the
investment income of which is less than twenty-five per centum of its
entire net income and the investment capital of which is less than
twenty-five per centum of its total business and investment capital, may
at its election apply its business allocation percentage to its entire
net income and its total business and investment capital. Any taxpayer
not taxed upon the basis of a combined report, the investment income of
which is more than eighty-five per centum of its entire net income and
the investment capital of which is more than eighty-five per centum of
its total business and investment capital, may at its election apply its
investment allocation percentage to its entire net income and its total
business and investment capital. Any taxpayer not taxed upon the basis
of a combined report, the subsidiary capital of which (computed without
regard to this sentence) is more than eighty-five per centum of its
total capital, exclusive of cash on hand and on deposit, obligations of
the United States and its instrumentalities and obligations of the state
of New York, its political subdivisions and its instrumentalities, may
at its election treat as subsidiary capital a proportion of such cash
and obligations not in excess of the proportion of its subsidiary
capital (so computed) to its total capital.

7. The portion of the subsidiary capital of a taxpayer to be allocated
within the city shall be determined by (a) multiplying the amount of its
subsidiary capital invested in each subsidiary during the period covered
by its report (or, in the case of any such capital so invested during
only a portion of such period, such portion of such capital) by the
percentage, if any, of the entire capital or the issued capital stock,
or the gross direct premiums, or the net income, as the case may be, of
such subsidiary required to be allocated within the city on the report
or reports, if any, required of such subsidiary under this title for the
preceding year, or which would have been required for such year had this
title been in effect, but without regard to any minimum, (b) multiplying
the proportion of cash and obligations of the United States and its
instrumentalities and obligations of the state of New York, its
political subdivisions and its instrumentalities treated as subsidiary
capital, by the weighted average of the percentages used in clause (a)
hereof, and (c) adding together the sums so obtained.

8. If it shall appear to the director of finance that any business or
investment allocation percentage determined as hereinabove provided does
not properly reflect the activity, business, income or capital of a
taxpayer within the city, the director of finance shall be authorized in
his discretion, in the case of a business allocation percentage, to
adjust it by (a) excluding one or more of the factors therein, (b)
including one or more other factors, such as expenses, purchases,
contract values (minus subcontract values), (c) excluding one or more
assets in computing such allocation percentage, provided the income
therefrom is also excluded in determining entire net income, or (d) any
other similar or different method calculated to effect a fair and proper
allocation of the income and capital reasonably attributable to the
city, and in the case of an investment allocation percentage to adjust
it by excluding one or more assets in computing such percentage provided
the income therefrom is also excluded in determining entire net income.
The director of finance from time to time shall publish all rulings of
general public interest with respect to any application of the
provisions of this subdivision.

9. If it shall appear to the director of finance that any business
allocation percentage determined as hereinabove provided does not
properly reflect the activity, business, income or capital of a taxpayer
within the city, the director of finance shall be authorized in his
discretion to adjust it by (a) excluding one or more of the factors
therein, (b) including one or more other factors, such as expenses,
purchases, contract values (minus subcontract values), (c) excluding one
or more assets in computing such allocation percentage, provided the
income therefrom is also excluded in determining entire net income, or
(d) any other similar or different method calculated to effect a fair
and proper allocation of the income and capital reasonably attributable
to the city, and in the case of an investment allocation percentage, to
adjust it by excluding one or more assets in computing such percentage
provided the income therefrom is also excluded in determining entire net
income. The director of finance from time to time shall publish all
rulings of general public interest with respect to any application of
the provisions of this subdivision.

10. For purposes of this section the taxpayer's real property shall
include not only such property owned by the taxpayer but also such
property rented to it.