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Assembly Actions -
Lowercase Senate Actions - UPPERCASE |
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| Jan 08, 2020 |
referred to budget and revenue |
| Feb 07, 2019 |
referred to budget and revenue |
Senate Bill S3456
2019-2020 Legislative Session
Relates to franchise tax on banking corporations
download bill text pdfSponsored By
(D) 42nd Senate District
Archive: Last Bill Status - In Senate Committee Budget And Revenue Committee
- Introduced
-
- In Committee Assembly
- In Committee Senate
-
- On Floor Calendar Assembly
- On Floor Calendar Senate
-
- Passed Assembly
- Passed Senate
- Delivered to Governor
- Signed By Governor
Actions
co-Sponsors
(D, WF) 48th Senate District
(D) 10th Senate District
2019-S3456 (ACTIVE) - Details
- See Assembly Version of this Bill:
- A8552
- Current Committee:
- Senate Budget And Revenue
- Law Section:
- Tax Law
- Laws Affected:
- Add Art 32 §§1450 - 1468, Tax L
- Versions Introduced in Other Legislative Sessions:
-
2015-2016:
S7571, A6261
2017-2018: S6885, A5316
2021-2022: S1680, A3474
2023-2024: S3440, A2195
2019-S3456 (ACTIVE) - Summary
Reinstates a bank tax based on the highest of four bases: a tax on allocated entire net income, a tax on allocated alternative entire net income, a tax on allocated taxable assets, or a fixed dollar minimum tax; prohibits banks from segregating their income and capital into business and investment varieties.
2019-S3456 (ACTIVE) - Sponsor Memo
BILL NUMBER: S3456
SPONSOR: SKOUFIS
TITLE OF BILL: An act to amend the tax law, in relation to franchise
tax on banking corporations
PURPOSE OR GENERAL IDEA OF BILL:
Reinstates a bank tax based on the highest of four bases: a tax on allo-
cated entire net income, a tax on allocated alternative entire net
income, a tax on allocated taxable assets, or a fixed dollar minimum
tax. Banks are not allowed to segregate their income and capital into
business and investment varieties.
SUMMARY OF PROVISIONS:
The bill will amend the tax law to reinstate Article 32, the franchise
tax on bank corporations.
JUSTIFICATION:
No analysis or study has ever been shared that demonstrates the elimi- nation of the bank tax in the 2014-2015 budget was in any way vital to the well-being of New York's financial sector. Until that time, the bank tax should be reinstated, particularly in light of the financial sector's actions leading up to the recent recession as well as the fact that it has already received substantial assistance from taxpayers as part of the federal government's Trouble Asset Relief Program or TARP. PRIOR LEGISLATIVE HISTORY: Assembly: 2017: A5316 - Referred to Rules 2018: Referred to Investigations and Government Operations Senate: 2017: S6885 - Referred to Ways and Means 2018: Referred to Ways and Means FISCAL IMPLICATIONS: Estimated revenue increase of $200 million to $250 million. EFFECTIVE DATE: This act shall take effect immediately and shall apply to taxable 4 years starting January 1, 2020.
2019-S3456 (ACTIVE) - Bill Text download pdf
S T A T E O F N E W Y O R K
________________________________________________________________________
3456
2019-2020 Regular Sessions
I N S E N A T E
February 7, 2019
___________
Introduced by Sens. SKOUFIS, SANDERS -- read twice and ordered printed,
and when printed to be committed to the Committee on Budget and Reven-
ue
AN ACT to amend the tax law, in relation to franchise tax on banking
corporations
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The tax law is amended by adding a new article 32 to read
as follows:
ARTICLE 32
FRANCHISE TAX ON BANKING CORPORATIONS
SECTION 1450. GENERAL DEFINITIONS.
1451. IMPOSITION OF TAX.
1452. BANKING CORPORATION DEFINED; EXEMPT CORPORATIONS.
1453. COMPUTATIONS OF ENTIRE NET INCOME.
1453-A. COMPUTATION OF ALTERNATIVE ENTIRE NET INCOME.
1454. ALLOCATION.
1455. COMPUTATION OF TAX.
1455-A. TAX SURCHARGE.
1455-B. TEMPORARY METROPOLITAN TRANSPORTATION BUSINESS TAX
SURCHARGE ON BANKS.
1456. CREDITS.
1460. DECLARATIONS OF ESTIMATED TAX.
1461. PAYMENTS OF ESTIMATED TAX.
1462. RETURNS.
1463. PAYMENT OF TAX.
1466. DEPOSIT AND DISPOSITION OF REVENUE.
1467. SECRECY REQUIRED OF OFFICIALS; PENALTY FOR VIOLATION.
1468. PROCEDURAL PROVISIONS.
§ 1450. GENERAL DEFINITIONS. AS USED IN THIS ARTICLE:
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07753-02-9
S. 3456 2
(A) THE WORD "TAXPAYER" MEANS A CORPORATION OR ASSOCIATION SUBJECT TO
A TAX IMPOSED BY THIS ARTICLE.
(B) THE PHRASE "TAXABLE YEAR" MEANS THE TAXPAYER'S TAXABLE YEAR FOR
FEDERAL INCOME TAX PURPOSES, OR THE PART THEREOF DURING WHICH THE
TAXPAYER IS SUBJECT TO THE TAX IMPOSED BY THIS ARTICLE.
(C) THE TERM "INTERNATIONAL BANKING FACILITY" SHALL MEAN AN INTERNA-
TIONAL BANKING FACILITY LOCATED IN NEW YORK STATE AND SHALL HAVE THE
SAME MEANING AS IS SET FORTH IN THE NEW YORK STATE BANKING LAW OR REGU-
LATIONS OF THE NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES OR AS IS
SET FORTH IN THE LAWS OF THE UNITED STATES OR REGULATIONS OF THE BOARD
OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.
(D) THE TERM "SUBSIDIARY" MEANS A CORPORATION OR ASSOCIATION OF WHICH
OVER FIFTY PERCENT OF THE NUMBER OF SHARES OF STOCK ENTITLING THE HOLD-
ERS THEREOF TO VOTE FOR THE ELECTION OF DIRECTORS OR TRUSTEES IS OWNED
BY THE TAXPAYER.
(E) THE TERM "SUBSIDIARY CAPITAL" MEANS INVESTMENTS IN THE STOCK OF
SUBSIDIARIES AND ANY INDEBTEDNESS FROM SUBSIDIARIES, EXCLUSIVE OF
ACCOUNTS RECEIVABLE ACQUIRED IN THE ORDINARY COURSE OF TRADE OR BUSINESS
FOR SERVICES RENDERED OR FOR SALES OF PROPERTY HELD PRIMARILY FOR SALE
TO CUSTOMERS, WHETHER OR NOT EVIDENCED BY WRITTEN INSTRUMENT, ON WHICH
INTEREST IS NOT CLAIMED AND DEDUCTED BY THE SUBSIDIARY FOR PURPOSES OF
TAXATION UNDER THIS ARTICLE, ARTICLE NINE-A OR THIRTY-THREE OF THIS
CHAPTER, PROVIDED, HOWEVER, THERE SHALL BE DEDUCTED FROM SUBSIDIARY
CAPITAL ANY LIABILITIES 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
RETURN, WHICH ARE ATTRIBUTABLE TO SUBSIDIARY CAPITAL.
(F) THE TERMS "NEW YORK S CORPORATION", "NEW YORK S YEAR", "NEW YORK S
ELECTION", "NEW YORK C CORPORATION", "NEW YORK C YEAR", "TERMINATION
YEAR", "S SHORT YEAR", "C SHORT YEAR", AND "NEW YORK S TERMINATION YEAR"
SHALL HAVE THE SAME MEANING AS THOSE TERMS HAVE UNDER SUBDIVISION ONE-A
OF SECTION TWO HUNDRED EIGHT OF THIS CHAPTER, EXCEPT THAT REFERENCES IN
SUCH SUBDIVISION TO ARTICLE NINE-A OF THIS CHAPTER SHALL BE READ AS
REFERENCES TO THIS ARTICLE.
(G) THE TERM "QSSS" MEANS A CORPORATION WHICH IS A QUALIFIED SUBCHAP-
TER S SUBSIDIARY AS DEFINED IN SUBPARAGRAPH (B) OF PARAGRAPH THREE OF
SUBSECTION (B) OF SECTION THIRTEEN HUNDRED SIXTY-ONE OF THE INTERNAL
REVENUE CODE. THE TERM "EXEMPT QSSS" MEANS A QSSS EXEMPT FROM TAX UNDER
THIS ARTICLE AS PROVIDED IN SUBSECTION (O) OF SECTION FOURTEEN HUNDRED
FIFTY-THREE OF THIS ARTICLE, OR A QSSS DESCRIBED IN CLAUSE (I) OF
SUBPARAGRAPH (B) OF PARAGRAPH TWO OF SUBSECTION (O) OF SECTION FOURTEEN
HUNDRED FIFTY-THREE, WHEREIN THE PARENT CORPORATION OF THE QSSS IS
SUBJECT TO TAX UNDER THIS ARTICLE, AND THE ASSETS, LIABILITIES, INCOME
AND DEDUCTIONS OF THE QSSS ARE TREATED AS THE ASSETS, LIABILITIES,
INCOME AND DEDUCTIONS OF THE PARENT CORPORATION. WHERE A QSSS IS AN
EXEMPT QSSS, THEN FOR ALL PURPOSES UNDER THIS ARTICLE:
(1) THE ASSETS, LIABILITIES, INCOME, DEDUCTIONS, PROPERTY, PAYROLL,
RECEIPTS, CAPITAL, CREDITS, AND ALL OTHER TAX ATTRIBUTES AND ELEMENTS OF
ECONOMIC ACTIVITY OF THE QSSS SHALL BE DEEMED TO BE THOSE OF THE PARENT
CORPORATION,
(2) THE STOCKS, BONDS AND OTHER SECURITIES ISSUED BY, AND ANY INDEBT-
EDNESS FROM, THE QSSS SHALL NOT BE SUBSIDIARY CAPITAL OF THE PARENT
CORPORATION,
(3) TRANSACTIONS BETWEEN THE PARENT CORPORATION AND THE QSSS, INCLUD-
ING THE PAYMENT OF INTEREST AND DIVIDENDS, SHALL NOT BE TAKEN INTO
ACCOUNT, AND
S. 3456 3
(4) GENERAL EXECUTIVE OFFICERS OF THE QSSS SHALL BE DEEMED TO BE
GENERAL EXECUTIVE OFFICERS OF THE PARENT CORPORATION.
(H) THE TERM "FINANCIAL HOLDING COMPANY" MEANS A CORPORATION THAT,
PURSUANT TO SUBSECTION (L) OF SECTION 4 OF THE FEDERAL BANK HOLDING
COMPANY ACT OF NINETEEN HUNDRED FIFTY-SIX, AS AMENDED, HAS FILED WITH
THE FEDERAL RESERVE BOARD A WRITTEN DECLARATION THAT THE CORPORATION
ELECTS TO BE A FINANCIAL HOLDING COMPANY AND WHOSE ELECTION HAS NOT BEEN
FOUND TO BE INEFFECTIVE BY THE FEDERAL RESERVE BOARD.
§ 1451. IMPOSITION OF TAX. (A) FOR THE PRIVILEGE OF EXERCISING ITS
FRANCHISE OR DOING BUSINESS IN THIS STATE IN A CORPORATE OR ORGANIZED
CAPACITY, A TAX, COMPUTED UNDER SECTION FOURTEEN HUNDRED FIFTY-FIVE OF
THIS ARTICLE, IS HEREBY ANNUALLY IMPOSED ON EVERY BANKING CORPORATION
FOR EACH OF ITS TAXABLE YEARS, OR ANY PART THEREOF, BEGINNING ON OR
AFTER JANUARY FIRST, NINETEEN HUNDRED SEVENTY-THREE.
(B) IN THE CASE OF A TAXPAYER WHOSE TAXABLE YEAR IS OTHER THAN A
CALENDAR YEAR, THERE IS HEREBY IMPOSED A TAX FOR THE PRIVILEGE OF EXER-
CISING ITS FRANCHISE OR DOING BUSINESS IN THIS STATE IN A CORPORATE OR
ORGANIZED CAPACITY FOR THE PERIOD BEGINNING JANUARY FIRST, NINETEEN
HUNDRED SEVENTY-THREE AND EXTENDING THROUGH THE SUBSEQUENT PART OF ITS
FIRST SUCH TAXABLE YEAR ENDING AFTER SUCH DATE. SUCH TAX SHALL BE
COMPUTED UNDER SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE ON
THE BASIS OF SUCH TAXPAYER'S ENTIRE NET INCOME, OR OTHER APPLICABLE
BASIS AS THE CASE MAY BE, FOR SUCH PERIOD AND SHALL BE PAID WITH A
RETURN WHICH SHALL BE SEPARATELY FILED WITH THE TAX COMMISSION NOT LATER
THAN THE FIFTEENTH DAY OF THE THIRD MONTH SUCCEEDING THE CLOSE OF SUCH
PERIOD. THE REQUIREMENTS OF SECTIONS FOURTEEN HUNDRED SIXTY AND FOURTEEN
HUNDRED SIXTY-ONE OF THIS ARTICLE, RELATING TO DECLARATIONS AND PAYMENTS
OF ESTIMATED TAX, EXCEPT SUBSECTION (A) OF SECTION FOURTEEN HUNDRED
SIXTY-ONE OF THIS ARTICLE, SHALL NOT BE APPLICABLE TO THE TAX IMPOSED BY
THIS SUBSECTION.
(C)(1) A BANKING CORPORATION IS DOING BUSINESS IN THIS STATE 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 THIS STATE
AS OF THE LAST DAY OF ITS TAXABLE YEAR, (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 THIS STATE TO
WHOM THE BANKING CORPORATION REMITTED PAYMENTS FOR CREDIT CARD TRANS-
ACTIONS DURING THE TAXABLE YEAR, (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 THIS STATE, (IV) IT HAS RECEIPTS OF ONE MILLION DOLLARS
OR MORE ARISING FROM MERCHANT CUSTOMER CONTRACTS WITH MERCHANTS RELATING
TO LOCATIONS IN THIS STATE, 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 SUBSECTION, THE TERM "CREDIT CARD" INCLUDES BANK,
CREDIT, TRAVEL AND ENTERTAINMENT CARDS.
§ 1452. BANKING CORPORATION DEFINED; EXEMPT CORPORATIONS. (A) FOR THE
PURPOSE OF THIS ARTICLE, A BANKING CORPORATION MEANS:
S. 3456 4
(1) EVERY CORPORATION OR ASSOCIATION ORGANIZED UNDER THE LAWS OF THIS
STATE WHICH IS AUTHORIZED TO DO A BANKING BUSINESS, OR WHICH IS DOING A
BANKING BUSINESS;
(2) EVERY CORPORATION OR ASSOCIATION ORGANIZED UNDER THE LAWS OF ANY
OTHER STATE OR COUNTRY WHICH IS DOING A BANKING BUSINESS;
(3) EVERY NATIONAL BANKING ASSOCIATION ORGANIZED UNDER THE AUTHORITY
OF THE UNITED STATES WHICH IS DOING A BANKING BUSINESS;
(4) EVERY FEDERAL SAVINGS BANK WHICH IS DOING A BANKING BUSINESS;
(5) EVERY FEDERAL SAVINGS AND LOAN ASSOCIATION WHICH IS DOING A BANK-
ING BUSINESS;
(6) A PRODUCTION CREDIT ASSOCIATION ORGANIZED UNDER THE FEDERAL FARM
CREDIT ACT OF NINETEEN HUNDRED THIRTY-THREE, WHICH IS DOING A BANKING
BUSINESS AND ALL OF WHOSE STOCK HELD BY THE FEDERAL PRODUCTION CREDIT
CORPORATION HAS BEEN RETIRED;
(7) EVERY OTHER CORPORATION OR ASSOCIATION ORGANIZED UNDER THE AUTHOR-
ITY OF THE UNITED STATES WHICH IS DOING A BANKING BUSINESS;
(8) THE MORTGAGE FACILITIES CORPORATION CREATED BY CHAPTER FIVE
HUNDRED SIXTY-FOUR OF THE LAWS OF NINETEEN HUNDRED FIFTY-SIX;
(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
SUBSECTION, 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
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; AND PROVIDED, FURTHER, THAT IN NO EVENT SHALL A
CORPORATION PRINCIPALLY ENGAGED IN A BUSINESS DESCRIBED IN SECTION ONE
HUNDRED EIGHTY-THREE OR ONE HUNDRED EIGHTY-FOUR, OR SECTION ONE HUNDRED
EIGHTY-SIX AS IT WAS IN EFFECT ON DECEMBER THIRTY-FIRST, NINETEEN
HUNDRED NINETY-NINE, OF THIS CHAPTER BE SUBJECT TO THE TAX IMPOSED UNDER
THIS ARTICLE IF ANY OF ITS BUSINESS RECEIPTS FROM SUCH PRINCIPALLY
ENGAGED IN BUSINESS ARE FROM OTHER THAN A CORPORATION (A) WHICH OWNS OR
CONTROLS, DIRECTLY OR INDIRECTLY, SIXTY-FIVE PERCENT OR MORE OF ITS
VOTING STOCK, OR (B) SIXTY-FIVE PERCENT OR MORE OF WHOSE VOTING STOCK IS
OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE CORPORATION ENGAGED
IN SUCH BUSINESS, OR (C) SIXTY-FIVE PERCENT OR MORE OF WHOSE VOTING
STOCK IS OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE SAME INTER-
EST.
(B) BANKING BUSINESS DEFINED. THE WORDS "BANKING BUSINESS" AS USED IN
THIS SECTION MEAN SUCH BUSINESS AS A CORPORATION OR ASSOCIATION MAY BE
CREATED TO DO UNDER ARTICLE THREE, THREE-B, FIVE, FIVE-A, FIVE-C, SIX OR
TEN OF THE BANKING LAW OR ANY BUSINESS WHICH A CORPORATION OR ASSOCI-
S. 3456 5
ATION IS AUTHORIZED BY SUCH ARTICLE TO DO. HOWEVER, WITH RESPECT TO A
NATIONAL BANKING ASSOCIATION ORGANIZED UNDER THE AUTHORITY OF THE UNITED
STATES, A FEDERAL SAVINGS BANK, A FEDERAL SAVINGS AND LOAN ASSOCIATION
OR A PRODUCTION CREDIT ASSOCIATION, THE WORDS "BANKING BUSINESS" AS USED
IN THIS SECTION MEAN SUCH BUSINESS AS A NATIONAL BANKING ASSOCIATION,
FEDERAL SAVINGS BANK, FEDERAL SAVINGS AND LOAN ASSOCIATION OR PRODUCTION
CREDIT ASSOCIATION, RESPECTIVELY, MAY BE CREATED TO DO OR IS AUTHORIZED
TO DO UNDER THE LAWS OF THE UNITED STATES OR THIS STATE. THE WORDS
"BANKING BUSINESS" AS USED IN THIS SECTION SHALL ALSO MEAN SUCH BUSINESS
AS ANY CORPORATION OR ASSOCIATION ORGANIZED UNDER THE AUTHORITY OF THE
UNITED STATES OR ORGANIZED UNDER THE LAWS OF ANY OTHER STATE OR COUNTRY
HAS AUTHORITY TO DO WHICH IS SUBSTANTIALLY SIMILAR TO THE BUSINESS WHICH
A CORPORATION OR ASSOCIATION MAY BE CREATED TO DO UNDER ARTICLE THREE,
THREE-B, FIVE, FIVE-A, FIVE-C, SIX OR TEN OF THE BANKING LAW OR ANY
BUSINESS WHICH A CORPORATION OR ASSOCIATION IS AUTHORIZED BY SUCH ARTI-
CLE TO DO.
(C) EXEMPT CORPORATIONS. A TRUST COMPANY ALL OF WHOSE CAPITAL STOCK IS
OWNED BY TWENTY OR MORE SAVINGS BANKS ORGANIZED UNDER NEW YORK LAW SHALL
BE EXEMPT FROM THE TAX UNDER THIS ARTICLE.
(D) CORPORATIONS TAXABLE UNDER ARTICLE NINE-A. NOTWITHSTANDING THE
PROVISIONS OF THIS ARTICLE, ALL CORPORATIONS OF CLASSES NOW OR HERETO-
FORE TAXABLE UNDER ARTICLE NINE-A OF THIS CHAPTER SHALL CONTINUE TO BE
TAXABLE UNDER SUCH ARTICLE NINE-A, EXCEPT: (1) CORPORATIONS ORGANIZED
UNDER ARTICLE 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 REGIS-
TERED 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
SUBSECTION (F) OF SECTION FOURTEEN HUNDRED SIXTY-TWO OF THIS ARTICLE;
(3) BANKING CORPORATIONS DESCRIBED IN PARAGRAPH NINE OF SUBSECTION (A)
OF THIS SECTION; (4) ANY CAPTIVE REIT OR CAPTIVE RIC THAT IS REQUIRED TO
BE INCLUDED IN A COMBINED RETURN UNDER THE PROVISIONS OF SUBSECTION (F)
OF SECTION FOURTEEN HUNDRED SIXTY-TWO OF THIS ARTICLE; AND (5) ANY OVER-
CAPITALIZED CAPTIVE INSURANCE COMPANY REQUIRED TO BE INCLUDED IN A
COMBINED RETURN UNDER SUBSECTION (F) OF SECTION FOURTEEN HUNDRED SIXTY-
TWO OF THIS ARTICLE. PROVIDED, HOWEVER, THAT A CORPORATION DESCRIBED IN
PARAGRAPH THREE OF THIS SUBSECTION WHICH WAS SUBJECT TO THE TAX IMPOSED
BY ARTICLE NINE-A 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 ARTICLE NINE-A. SUCH ELECTION SHALL
CONTINUE TO BE IN EFFECT UNTIL REVOKED BY THE TAXPAYER. IN NO EVENT
SHALL SUCH ELECTION OR REVOCATION BE FOR A PART OF A TAXABLE YEAR.
(E) CORPORATIONS TAXABLE UNDER ARTICLE THIRTY-THREE. EXCEPT FOR CORPO-
RATIONS DESCRIBED IN SUBSECTION (1) OF SECTION FOURTEEN HUNDRED FIFTY-
THREE OF THIS ARTICLE, CORPORATIONS LIABLE TO TAX UNDER ARTICLE THIRTY-
THREE OF THIS CHAPTER SHALL NOT BE SUBJECT TO TAX UNDER THIS ARTICLE.
(F) FOR EXEMPTION FROM TAX OF A QUALIFIED SUBCHAPTER S SUBSIDIARY, SEE
SUBSECTION (O) OF SECTION FOURTEEN HUNDRED FIFTY-THREE OF THIS ARTICLE.
(G) A BANKING CORPORATION ORGANIZED UNDER THE LAWS OF A COUNTRY, OR
ANY POLITICAL SUBDIVISION THEREOF, OTHER THAN THE UNITED STATES SHALL
NOT BE DEEMED TO BE DOING BUSINESS IN THIS STATE UNDER THIS ARTICLE IF
ITS ACTIVITIES IN THIS STATE ARE LIMITED SOLELY TO (1) INVESTING OR
TRADING IN STOCKS AND SECURITIES FOR ITS OWN ACCOUNT WITHIN THE MEANING
S. 3456 6
OF CLAUSE (II) OF SUBPARAGRAPH (A) OF PARAGRAPH (2) OF SUBSECTION (B) OF
SECTION EIGHT HUNDRED SIXTY-FOUR OF THE INTERNAL REVENUE CODE OR (2)
INVESTING OR TRADING IN COMMODITIES FOR ITS OWN ACCOUNT WITHIN THE MEAN-
ING OF CLAUSE (II) OF SUBPARAGRAPH (B) OF PARAGRAPH (2) OF SUBSECTION
(B) OF SECTION EIGHT HUNDRED SIXTY-FOUR OF THE INTERNAL REVENUE CODE OR
(3) ANY COMBINATION OF ACTIVITIES DESCRIBED IN PARAGRAPHS ONE AND TWO OF
THIS SUBSECTION.
(H) TRANSITIONAL PROVISIONS RELATING TO THE ENACTMENT AND IMPLEMENTA-
TION OF THE FEDERAL GRAMM-LEACH-BLILEY ACT. (1) NOTWITHSTANDING ANYTHING
TO THE CONTRARY CONTAINED IN THIS SECTION OTHER THAN SUBSECTION (N) OF
THIS SECTION, A CORPORATION THAT WAS IN EXISTENCE BEFORE JANUARY FIRST,
TWO THOUSAND AND WAS SUBJECT TO TAX UNDER SUCH ARTICLE NINE-A OF THIS
CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY FIRST, TWO
THOUSAND, SHALL CONTINUE TO BE TAXABLE UNDER SUCH ARTICLE NINE-A 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 SUBSECTION (A)
OF THIS SECTION. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
THIS SECTION OTHER THAN SUBSECTION (N) OF THIS SECTION, A BANKING CORPO-
RATION THAT WAS IN EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND AND WAS
SUBJECT TO TAX UNDER THIS ARTICLE FOR ITS LAST TAXABLE YEAR BEGINNING
BEFORE JANUARY FIRST, TWO THOUSAND, SHALL CONTINUE TO BE TAXABLE UNDER
THIS ARTICLE 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 SUBSECTION SHALL PROHIBIT A CORPORATION
THAT ELECTED PURSUANT TO SUBSECTION (D) OF THIS SECTION TO BE TAXABLE
UNDER ARTICLE NINE-A OF THIS CHAPTER FROM REVOKING THAT ELECTION IN
ACCORDANCE WITH SUCH SUBSECTION (D).
FOR PURPOSES OF THIS PARAGRAPH, A CORPORATION SHALL BE CONSIDERED TO
BE SUBJECT TO TAX UNDER ARTICLE NINE-A 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 SECTION TWO HUNDRED ELEVEN OF THIS
CHAPTER FOR SUCH TAXABLE YEAR AND A CORPORATION SHALL BE CONSIDERED TO
BE SUBJECT TO TAX UNDER THIS ARTICLE FOR A TAXABLE YEAR IF SUCH CORPO-
RATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN A COMBINED RETURN
FILED PURSUANT TO SUBSECTION (F) OR (G) OF SECTION FOURTEEN HUNDRED
SIXTY-TWO OF THIS ARTICLE FOR 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 JANUARY FIRST, TWO THOUSAND ONE, SHALL BE CONSIDERED
FOR PURPOSES OF THIS PARAGRAPH TO HAVE BEEN SUBJECT TO TAX UNDER ARTICLE
NINE-A OF THIS CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANU-
ARY FIRST, TWO THOUSAND IF SUCH CORPORATION WOULD HAVE BEEN SUBJECT TO
TAX UNDER SUCH ARTICLE 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 ARTICLE FOR ITS LAST
TAXABLE YEAR BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND IF SUCH CORPO-
RATION WOULD HAVE BEEN SUBJECT TO TAX UNDER THIS ARTICLE FOR SUCH TAXA-
BLE YEAR IF IT HAD BEEN A TAXPAYER DURING SUCH TAXABLE YEAR.
(2) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION
OTHER THAN SUBSECTION (N) OF THIS SECTION, A CORPORATION FORMED ON OR
AFTER JANUARY FIRST, TWO THOUSAND AND BEFORE JANUARY FIRST, TWO THOUSAND
S. 3456 7
ONE MAY ELECT TO BE SUBJECT TO TAX UNDER THIS ARTICLE OR UNDER ARTICLE
NINE-A OF THIS CHAPTER FOR ITS FIRST TAXABLE YEAR BEGINNING ON OR AFTER
JANUARY FIRST, TWO THOUSAND AND BEFORE JANUARY FIRST, TWO THOUSAND 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 SUBSECTION (A) OF
THIS SECTION OR IN SUBSECTION (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 SUBSECTION 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 ARTICLE NINE-A OF THIS CHAPTER SHALL BE MADE
BY THE TAXPAYER BY FILING THE REPORT REQUIRED PURSUANT TO SECTION TWO
HUNDRED ELEVEN OF THIS CHAPTER AND THE ELECTION TO BE TAXED UNDER THIS
ARTICLE SHALL BE MADE BY THE TAXPAYER BY FILING THE RETURN REQUIRED
PURSUANT TO SECTION FOURTEEN HUNDRED SIXTY-TWO OF THIS ARTICLE. 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 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 SUBPARAGRAPH
(II) OF THIS PARAGRAPH CONTINUES AS A FINANCIAL SUBSIDIARY.
(3) FOR PURPOSES OF THIS SECTION, A FINANCIAL SUBSIDIARY MEANS A
CORPORATION (I) SIXTY-FIVE PERCENT OR MORE OF WHOSE VOTING STOCK IS
OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY BY A BANKING CORPORATION
DESCRIBED IN PARAGRAPH ONE, TWO OR THREE OF SUBSECTION (A) OF THIS
SECTION AND (II) IS DESCRIBED IN SECTION 5136A(G) OF THE REVISED STAT-
UTES OF THE UNITED STATES OR SECTION 46 OF THE FEDERAL DEPOSIT INSURANCE
ACT. FOR PURPOSES OF THIS ARTICLE, THE TERM "BANKING CORPORATION" SHALL
INCLUDE A CORPORATION ELECTING TO BE TAXED UNDER THIS ARTICLE PURSUANT
TO PARAGRAPH TWO OF THIS SUBSECTION FOR SO LONG AS SUCH ELECTION SHALL
BE IN EFFECT.
(I) TRANSITIONAL PROVISIONS RELATING TO THE ENACTMENT AND IMPLEMENTA-
TION OF THE FEDERAL GRAMM-LEACH-BLILEY ACT. (1) NOTWITHSTANDING ANYTHING
TO THE CONTRARY CONTAINED IN THIS SECTION OTHER THAN SUBSECTION (N) OF
THIS SECTION, A CORPORATION THAT WAS IN EXISTENCE BEFORE JANUARY FIRST,
TWO THOUSAND ONE AND WAS SUBJECT TO TAX UNDER ARTICLE NINE-A OF THIS
CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY FIRST, TWO
THOUSAND ONE, SHALL CONTINUE TO BE TAXABLE UNDER ARTICLE NINE-A 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 SUBSECTION (A)
OF THIS SECTION. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
THIS SECTION OTHER THAN SUBSECTION (N) OF THIS SECTION, A BANKING CORPO-
S. 3456 8
RATION THAT WAS IN EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND ONE AND
WAS SUBJECT TO TAX UNDER THIS ARTICLE FOR ITS LAST TAXABLE YEAR BEGIN-
NING BEFORE JANUARY FIRST, TWO THOUSAND ONE, SHALL CONTINUE TO BE TAXA-
BLE UNDER THIS ARTICLE FOR ALL TAXABLE YEARS BEGINNING ON OR AFTER JANU-
ARY FIRST, TWO THOUSAND ONE AND BEFORE JANUARY FIRST, TWO THOUSAND
THREE. PROVIDED, HOWEVER, THAT NOTHING IN THIS SUBSECTION SHALL PROHIBIT
A CORPORATION THAT ELECTED PURSUANT TO SUBSECTION (D) OF THIS SECTION TO
BE TAXABLE UNDER ARTICLE NINE-A OF THIS CHAPTER FROM REVOKING THAT
ELECTION IN ACCORDANCE WITH SUCH SUBSECTION (D).
FOR PURPOSES OF THIS PARAGRAPH, A CORPORATION SHALL BE CONSIDERED TO
BE SUBJECT TO TAX UNDER ARTICLE NINE-A 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 SECTION TWO HUNDRED ELEVEN OF THIS
CHAPTER FOR SUCH TAXABLE YEAR AND A CORPORATION SHALL BE CONSIDERED TO
BE SUBJECT TO TAX UNDER THIS ARTICLE FOR A TAXABLE YEAR IF SUCH CORPO-
RATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN A COMBINED RETURN
FILED PURSUANT TO SUBSECTION (F) OR (G) OF SECTION FOURTEEN HUNDRED
SIXTY-TWO OF THIS ARTICLE 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 ARTICLE NINE-A 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 ARTICLE 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 ARTICLE FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY
FIRST, TWO THOUSAND ONE IF SUCH CORPORATION WOULD HAVE BEEN SUBJECT TO
TAX UNDER THIS ARTICLE 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 SUBSECTION (N) 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 ARTICLE OR
UNDER ARTICLE NINE-A 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 SUBSECTION (A) OF THIS
SECTION OR IN SUBSECTION (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 SUBSECTION IF BOTH CORPORATIONS WERE SIXTY-FIVE
PERCENT OR MORE OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE SAME
S. 3456 9
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
ARTICLE NINE-A OF THIS CHAPTER SHALL BE MADE BY THE TAXPAYER BY FILING
THE REPORT REQUIRED PURSUANT TO SECTION TWO HUNDRED ELEVEN OF THIS CHAP-
TER AND THE ELECTION TO BE TAXED UNDER THIS ARTICLE SHALL BE MADE BY THE
TAXPAYER BY FILING THE RETURN REQUIRED PURSUANT TO SECTION FOURTEEN
HUNDRED SIXTY-TWO OF THIS ARTICLE. ANY ELECTION MADE PURSUANT TO THIS
PARAGRAPH SHALL BE IRREVOCABLE AND SHALL APPLY TO EACH SUBSEQUENT TAXA-
BLE YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND ONE AND
BEFORE JANUARY FIRST, TWO THOUSAND THREE, PROVIDED THAT THE STOCK OWNER-
SHIP REQUIREMENTS DESCRIBED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH ARE
MET OR SUCH CORPORATION DESCRIBED IN SUBPARAGRAPH (II) OF THIS PARAGRAPH
CONTINUES AS A FINANCIAL SUBSIDIARY.
(3) FOR PURPOSES OF THIS SECTION, A FINANCIAL SUBSIDIARY MEANS A
CORPORATION (I) SIXTY-FIVE PERCENT OR MORE OF WHOSE VOTING STOCK IS
OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY BY A BANKING CORPORATION
DESCRIBED IN PARAGRAPH ONE, TWO OR THREE OF SUBSECTION (A) OF THIS
SECTION AND (II) IS DESCRIBED IN SECTION 5136A(G) OF THE REVISED STAT-
UTES OF THE UNITED STATES OR SECTION 46 OF THE FEDERAL DEPOSIT INSURANCE
ACT. FOR PURPOSES OF THIS ARTICLE, THE TERM "BANKING CORPORATION" SHALL
INCLUDE A CORPORATION ELECTING TO BE TAXED UNDER THIS ARTICLE PURSUANT
TO PARAGRAPH TWO OF THIS SUBSECTION FOR SO LONG AS SUCH ELECTION SHALL
BE IN EFFECT.
(J) TRANSITIONAL PROVISIONS RELATING TO THE ENACTMENT AND IMPLEMENTA-
TION OF THE FEDERAL GRAMM-LEACH-BLILEY ACT. (1) NOTWITHSTANDING ANYTHING
TO THE CONTRARY CONTAINED IN THIS SECTION OTHER THAN SUBSECTION (N) OF
THIS SECTION, A CORPORATION THAT WAS IN EXISTENCE BEFORE JANUARY FIRST,
TWO THOUSAND THREE AND WAS SUBJECT TO TAX UNDER ARTICLE NINE-A OF THIS
CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY FIRST, TWO
THOUSAND THREE, SHALL CONTINUE TO BE TAXABLE UNDER SUCH ARTICLE NINE-A
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 CORPO-
RATION IS A BANKING CORPORATION DESCRIBED IN PARAGRAPHS ONE THROUGH
EIGHT OF SUBSECTION (A) OF THIS SECTION. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN THIS SECTION OTHER THAN SUBSECTION (N) OF THIS
SECTION, A BANKING CORPORATION THAT WAS IN EXISTENCE BEFORE JANUARY
FIRST, TWO THOUSAND THREE AND WAS SUBJECT TO TAX UNDER THIS ARTICLE FOR
ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND
THREE, SHALL CONTINUE TO BE TAXABLE UNDER THIS ARTICLE 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 SUBSECTION SHALL PROHIBIT A CORPORATION THAT ELECTED PURSUANT TO
SUBSECTION (D) OF THIS SECTION TO BE TAXABLE UNDER ARTICLE NINE-A OF
THIS CHAPTER FROM REVOKING THAT ELECTION IN ACCORDANCE WITH SUCH
SUBSECTION (D).
FOR PURPOSES OF THIS PARAGRAPH, A CORPORATION SHALL BE CONSIDERED TO
BE SUBJECT TO TAX UNDER ARTICLE NINE-A 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 SECTION TWO HUNDRED ELEVEN OF THIS
CHAPTER FOR SUCH TAXABLE YEAR AND A CORPORATION SHALL BE CONSIDERED TO
BE SUBJECT TO TAX UNDER THIS ARTICLE FOR A TAXABLE YEAR IF SUCH CORPO-
RATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN A COMBINED RETURN
FILED PURSUANT TO SUBSECTION (F) OR (G) OF SECTION FOURTEEN HUNDRED
S. 3456 10
SIXTY-TWO OF THIS ARTICLE 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 ARTICLE NINE-A 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 ARTICLE 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 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 ARTICLE FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY
FIRST, TWO THOUSAND THREE IF SUCH CORPORATION WOULD HAVE BEEN SUBJECT TO
TAX UNDER THIS ARTICLE 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 SUBSECTION (N) 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 ARTICLE OR UNDER
ARTICLE NINE-A OF THIS CHAPTER FOR ITS FIRST TAXABLE YEAR BEGINNING 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 FINAN-
CIAL 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 SUBSECTION (A) OF THIS
SECTION OR IN SUBSECTION (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 SUBSECTION 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
ARTICLE NINE-A OF THIS CHAPTER SHALL BE MADE BY THE TAXPAYER BY FILING
THE REPORT REQUIRED PURSUANT TO SECTION TWO HUNDRED ELEVEN OF THIS CHAP-
TER AND THE ELECTION TO BE TAXED UNDER THIS ARTICLE SHALL BE MADE BY THE
TAXPAYER BY FILING THE RETURN REQUIRED PURSUANT TO SECTION FOURTEEN
HUNDRED SIXTY-TWO OF THIS ARTICLE. ANY ELECTION MADE PURSUANT TO THIS
PARAGRAPH SHALL BE IRREVOCABLE AND SHALL APPLY TO EACH SUBSEQUENT TAXA-
BLE YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND THREE AND
BEFORE JANUARY FIRST, TWO THOUSAND FOUR, PROVIDED THAT THE STOCK OWNER-
SHIP REQUIREMENTS DESCRIBED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH ARE
MET OR SUCH CORPORATION DESCRIBED IN SUBPARAGRAPH (II) OF THIS PARAGRAPH
CONTINUES AS A FINANCIAL SUBSIDIARY.
(3) FOR PURPOSES OF THIS SECTION, A FINANCIAL SUBSIDIARY MEANS A
CORPORATION (I) SIXTY-FIVE PERCENT OR MORE OF WHOSE VOTING STOCK IS
S. 3456 11
OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY BY A BANKING CORPORATION
DESCRIBED IN PARAGRAPH ONE, TWO OR THREE OF SUBSECTION (A) OF THIS
SECTION AND (II) IS DESCRIBED IN SECTION 5136A(G) OF THE REVISED STAT-
UTES OF THE UNITED STATES OR SECTION 46 OF THE FEDERAL DEPOSIT INSURANCE
ACT. FOR PURPOSES OF THIS ARTICLE, THE TERM "BANKING CORPORATION" SHALL
INCLUDE A CORPORATION ELECTING TO BE TAXED UNDER THIS ARTICLE PURSUANT
TO PARAGRAPH TWO OF THIS SUBSECTION FOR SO LONG AS SUCH ELECTION SHALL
BE IN EFFECT.
(K) TRANSITIONAL PROVISIONS RELATING TO THE ENACTMENT AND IMPLEMENTA-
TION OF THE FEDERAL GRAMM-LEACH-BLILEY ACT. (1) NOTWITHSTANDING ANYTHING
TO THE CONTRARY CONTAINED IN THIS SECTION OTHER THAN SUBSECTION (N) OF
THIS SECTION, A CORPORATION THAT WAS IN EXISTENCE BEFORE JANUARY FIRST,
TWO THOUSAND FOUR AND WAS SUBJECT TO TAX UNDER ARTICLE NINE-A OF THIS
CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY FIRST, TWO
THOUSAND FOUR, SHALL CONTINUE TO BE TAXABLE UNDER SUCH ARTICLE NINE-A
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
SUBSECTION (A) OF THIS SECTION. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS SECTION OTHER THAN SUBSECTION (N) OF THIS SECTION, A
BANKING CORPORATION THAT WAS IN EXISTENCE BEFORE JANUARY FIRST, TWO
THOUSAND FOUR AND WAS SUBJECT TO TAX UNDER THIS ARTICLE FOR ITS LAST
TAXABLE YEAR BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND FOUR, SHALL
CONTINUE TO BE TAXABLE UNDER THIS ARTICLE FOR ALL TAXABLE YEARS BEGIN-
NING ON OR AFTER JANUARY FIRST, TWO THOUSAND FOUR AND BEFORE JANUARY
FIRST, TWO THOUSAND SIX. PROVIDED, HOWEVER, THAT NOTHING IN THIS
SUBSECTION SHALL PROHIBIT A CORPORATION THAT ELECTED PURSUANT TO
SUBSECTION (D) OF THIS SECTION TO BE TAXABLE UNDER ARTICLE NINE-A OF
THIS CHAPTER FROM REVOKING THAT ELECTION IN ACCORDANCE WITH SUCH
SUBSECTION (D).
FOR PURPOSES OF THIS PARAGRAPH, A CORPORATION SHALL BE CONSIDERED TO
BE SUBJECT TO TAX UNDER ARTICLE NINE-A 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 SECTION TWO HUNDRED ELEVEN OF THIS
CHAPTER FOR SUCH TAXABLE YEAR AND A CORPORATION SHALL BE CONSIDERED TO
BE SUBJECT TO TAX UNDER THIS ARTICLE FOR A TAXABLE YEAR IF SUCH CORPO-
RATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN A COMBINED RETURN
FILED PURSUANT TO SUBSECTION (F) OR (G) OF SECTION FOURTEEN HUNDRED
SIXTY-TWO OF THIS ARTICLE 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 ARTICLE NINE-A 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 ARTICLE 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 ARTICLE FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY
FIRST, TWO THOUSAND FOUR IF SUCH CORPORATION WOULD HAVE BEEN SUBJECT TO
TAX UNDER THIS ARTICLE FOR SUCH TAXABLE YEAR IF IT HAD BEEN A TAXPAYER
DURING SUCH TAXABLE YEAR.
S. 3456 12
(2) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION
OTHER THAN SUBSECTION (N) 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 ARTICLE OR UNDER
ARTICLE NINE-A OF THIS CHAPTER FOR ITS FIRST TAXABLE YEAR BEGINNING 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 FINAN-
CIAL 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 SUBSECTION (A) OF THIS
SECTION OR IN SUBSECTION (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 EIGHTY-SIX, AS
AMENDED, OF A CORPORATION DESCRIBED IN PARAGRAPH ONE OF THIS SUBSECTION
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 ARTICLE NINE-A OF THIS CHAPTER
SHALL BE MADE BY THE TAXPAYER BY FILING THE REPORT REQUIRED PURSUANT TO
SECTION TWO HUNDRED ELEVEN OF THIS CHAPTER AND THE ELECTION TO BE TAXED
UNDER THIS ARTICLE SHALL BE MADE BY THE TAXPAYER BY FILING THE RETURN
REQUIRED PURSUANT TO SECTION FOURTEEN HUNDRED SIXTY-TWO OF THIS ARTICLE.
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.
(3) FOR PURPOSES OF THIS SECTION, A FINANCIAL SUBSIDIARY MEANS A
CORPORATION (I) SIXTY-FIVE PERCENT OR MORE OF WHOSE VOTING STOCK IS
OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY BY A BANKING CORPORATION
DESCRIBED IN PARAGRAPH ONE, TWO OR THREE OF SUBSECTION (A) OF THIS
SECTION AND (II) IS DESCRIBED IN SECTION 5136A(G) OF THE REVISED STAT-
UTES OF THE UNITED STATES OR SECTION FORTY-SIX OF THE FEDERAL DEPOSIT
INSURANCE ACT. FOR PURPOSES OF THIS ARTICLE, THE TERM "BANKING CORPO-
RATION" SHALL INCLUDE A CORPORATION ELECTING TO BE TAXED UNDER THIS
ARTICLE PURSUANT TO PARAGRAPH TWO OF THIS SUBSECTION FOR SO LONG AS SUCH
ELECTION SHALL BE IN EFFECT.
(L) TRANSITIONAL PROVISIONS RELATING TO THE ENACTMENT AND IMPLEMENTA-
TION OF THE FEDERAL GRAMM-LEACH-BLILEY ACT. (1) NOTWITHSTANDING ANYTHING
TO THE CONTRARY CONTAINED IN THIS SECTION OTHER THAN SUBSECTION (N) OF
THIS SECTION, A CORPORATION THAT WAS IN EXISTENCE BEFORE JANUARY FIRST,
TWO THOUSAND SIX AND WAS SUBJECT TO TAX UNDER ARTICLE NINE-A OF THIS
CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY FIRST, TWO
THOUSAND SIX, SHALL CONTINUE TO BE TAXABLE UNDER ARTICLE NINE-A FOR ALL
TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND SIX AND
BEFORE JANUARY FIRST, TWO THOUSAND EIGHT. THE PRECEDING SENTENCE SHALL
S. 3456 13
NOT APPLY TO ANY TAXABLE YEAR DURING WHICH SUCH CORPORATION IS A BANKING
CORPORATION DESCRIBED IN PARAGRAPHS ONE THROUGH EIGHT OF SUBSECTION (A)
OF THIS SECTION. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
THIS SECTION OTHER THAN SUBSECTION (N) OF THIS SECTION, A BANKING CORPO-
RATION THAT WAS IN EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND SIX AND
WAS SUBJECT TO TAX UNDER THIS ARTICLE FOR ITS LAST TAXABLE YEAR BEGIN-
NING BEFORE JANUARY FIRST, TWO THOUSAND SIX, SHALL CONTINUE TO BE TAXA-
BLE UNDER THIS ARTICLE FOR ALL TAXABLE YEARS BEGINNING ON OR AFTER JANU-
ARY FIRST, TWO THOUSAND SIX AND BEFORE JANUARY FIRST, TWO THOUSAND
EIGHT. PROVIDED, HOWEVER, THAT NOTHING IN THIS SUBSECTION SHALL PROHIBIT
A CORPORATION THAT ELECTED PURSUANT TO SUBSECTION (D) OF THIS SECTION TO
BE TAXABLE UNDER ARTICLE NINE-A OF THIS CHAPTER FROM REVOKING THAT
ELECTION IN ACCORDANCE WITH SUCH SUBSECTION (D).
FOR PURPOSES OF THIS PARAGRAPH, A CORPORATION SHALL BE CONSIDERED TO
BE SUBJECT TO TAX UNDER ARTICLE NINE-A 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 SECTION TWO HUNDRED ELEVEN OF THIS
CHAPTER FOR SUCH TAXABLE YEAR AND A CORPORATION SHALL BE CONSIDERED TO
BE SUBJECT TO TAX UNDER THIS ARTICLE FOR A TAXABLE YEAR IF SUCH CORPO-
RATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN A COMBINED RETURN
FILED PURSUANT TO SUBSECTION (F) OR (G) OF SECTION FOURTEEN HUNDRED
SIXTY-TWO OF THIS ARTICLE FOR 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 ARTICLE NINE-A 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 ARTICLE 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 ARTICLE FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY
FIRST, TWO THOUSAND SIX IF SUCH CORPORATION WOULD HAVE BEEN SUBJECT TO
TAX UNDER THIS ARTICLE 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 SUBSECTION (N) 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 ARTICLE OR
UNDER ARTICLE NINE-A 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
SUBSECTION (A) OF THIS SECTION OR IN SUBSECTION (E) OF THIS SECTION. IN
ADDITION, AN ELECTION UNDER THIS PARAGRAPH MAY NOT BE MADE BY A CORPO-
RATION THAT IS A PARTY TO A REORGANIZATION, AS DEFINED IN SUBSECTION (A)
S. 3456 14
OF SECTION 368 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OF A
CORPORATION DESCRIBED IN PARAGRAPH ONE OF THIS SUBSECTION 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 ARTICLE NINE-A OF THIS CHAPTER SHALL BE MADE
BY THE TAXPAYER BY FILING THE REPORT REQUIRED PURSUANT TO SECTION TWO
HUNDRED ELEVEN OF THIS CHAPTER AND THE ELECTION TO BE TAXED UNDER THIS
ARTICLE SHALL BE MADE BY THE TAXPAYER BY FILING THE RETURN REQUIRED
PURSUANT TO SECTION FOURTEEN HUNDRED SIXTY-TWO OF THIS ARTICLE. 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.
(3) FOR PURPOSES OF THIS SECTION, A FINANCIAL SUBSIDIARY MEANS A
CORPORATION (I) SIXTY-FIVE PERCENT OR MORE OF WHOSE VOTING STOCK IS
OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY BY A BANKING CORPORATION
DESCRIBED IN PARAGRAPH ONE, TWO OR THREE OF SUBSECTION (A) OF THIS
SECTION AND (II) IS DESCRIBED IN SECTION 5136A(G) OF THE REVISED STAT-
UTES OF THE UNITED STATES OR SECTION 46 OF THE FEDERAL DEPOSIT INSURANCE
ACT. FOR PURPOSES OF THIS ARTICLE, THE TERM "BANKING CORPORATION" SHALL
INCLUDE A CORPORATION ELECTING TO BE TAXED UNDER THIS ARTICLE PURSUANT
TO PARAGRAPH TWO OF THIS SUBSECTION FOR SO LONG AS SUCH ELECTION SHALL
BE IN EFFECT.
(M) TRANSITIONAL PROVISIONS RELATING TO THE ENACTMENT AND IMPLEMENTA-
TION OF THE FEDERAL GRAMM-LEACH-BLILEY ACT. (1) NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION OTHER THAN SUBSECTION
(N) OF THIS SECTION, A CORPORATION THAT WAS IN EXISTENCE BEFORE JANUARY
FIRST, TWO THOUSAND TWELVE AND WAS SUBJECT TO TAX UNDER ARTICLE NINE-A
OF THIS CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY
FIRST, TWO THOUSAND TWELVE, SHALL CONTINUE TO BE TAXABLE UNDER SUCH
ARTICLE FOR ALL TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO
THOUSAND TWELVE AND BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN. 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 SUBSECTION (A) OF THIS SECTION. NOTWITHSTANDING ANYTHING TO
THE CONTRARY CONTAINED IN THIS SECTION OTHER THAN SUBSECTION (N) OF THIS
SECTION, A BANKING CORPORATION OR CORPORATION THAT WAS IN EXISTENCE
BEFORE JANUARY FIRST, TWO THOUSAND TWELVE AND WAS SUBJECT TO TAX UNDER
THIS ARTICLE FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY FIRST,
TWO THOUSAND TWELVE, SHALL CONTINUE TO BE TAXABLE UNDER THIS ARTICLE FOR
ALL TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
TWELVE AND BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN ONLY IF THE
CORPORATION IS A BANKING CORPORATION AS DEFINED IN SUBSECTION (A) OF
THIS SECTION OR THE CORPORATION SATISFIES THE REQUIREMENTS FOR A CORPO-
RATION TO ELECT TO BE TAXABLE UNDER THIS ARTICLE. PROVIDED FURTHER, THAT
NOTHING IN THIS SUBSECTION SHALL PROHIBIT A CORPORATION THAT ELECTED
PURSUANT TO SUBSECTION (D) OF THIS SECTION TO BE TAXABLE UNDER ARTICLE
NINE-A OF THIS CHAPTER FROM REVOKING THAT ELECTION IN ACCORDANCE WITH
SUCH SUBSECTION (D).
FOR PURPOSES OF THIS PARAGRAPH, A CORPORATION SHALL BE CONSIDERED TO
BE SUBJECT TO TAX UNDER ARTICLE NINE-A OF THIS CHAPTER FOR A TAXABLE
S. 3456 15
YEAR IF SUCH CORPORATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN
A COMBINED REPORT FILED PURSUANT TO SECTION TWO HUNDRED ELEVEN OF THIS
CHAPTER FOR SUCH TAXABLE YEAR AND A CORPORATION SHALL BE CONSIDERED TO
BE SUBJECT TO TAX UNDER THIS ARTICLE FOR A TAXABLE YEAR IF SUCH CORPO-
RATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN A COMBINED RETURN
FILED PURSUANT TO SUBSECTION (F) OR (G) OF SECTION FOURTEEN HUNDRED
SIXTY-TWO OF THIS ARTICLE FOR SUCH TAXABLE YEAR. A CORPORATION THAT WAS
IN EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND TWELVE BUT FIRST BECOMES
A TAXPAYER IN A TAXABLE YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO
THOUSAND TWELVE AND BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN, SHALL
BE CONSIDERED FOR PURPOSES OF THIS PARAGRAPH TO HAVE BEEN SUBJECT TO TAX
UNDER ARTICLE NINE-A OF THIS CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING
BEFORE JANUARY FIRST, TWO THOUSAND TWELVE IF SUCH CORPORATION WOULD HAVE
BEEN SUBJECT TO TAX UNDER SUCH ARTICLE 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 TWELVE BUT FIRST BECOMES A
TAXPAYER IN A TAXABLE YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO
THOUSAND TWELVE AND BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN, SHALL
BE CONSIDERED FOR PURPOSES OF THIS PARAGRAPH TO HAVE BEEN SUBJECT TO TAX
UNDER THIS ARTICLE FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY
FIRST, TWO THOUSAND TWELVE IF SUCH CORPORATION WOULD HAVE BEEN SUBJECT
TO TAX UNDER THIS ARTICLE 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 SUBSECTION (N) OF THIS SECTION, A CORPORATION FORMED ON OR
AFTER JANUARY FIRST, TWO THOUSAND TWELVE AND BEFORE JANUARY FIRST, TWO
THOUSAND NINETEEN MAY ELECT TO BE SUBJECT TO TAX UNDER THIS ARTICLE OR
UNDER ARTICLE NINE-A OF THIS CHAPTER FOR ITS FIRST TAXABLE YEAR BEGIN-
NING ON OR AFTER JANUARY FIRST, TWO THOUSAND TWELVE AND BEFORE JANUARY
FIRST, TWO THOUSAND NINETEEN 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 CORPORATION DESCRIBED IN PARAGRAPHS ONE THROUGH EIGHT
OF SUBSECTION (A) OF THIS SECTION OR IN SUBSECTION (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 SUBSECTION
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 ARTICLE NINE-A OF THIS CHAPTER SHALL BE MADE
BY THE TAXPAYER BY FILING THE REPORT REQUIRED PURSUANT TO SECTION TWO
HUNDRED ELEVEN OF THIS CHAPTER AND THE ELECTION TO BE TAXED UNDER THIS
ARTICLE SHALL BE MADE BY THE TAXPAYER BY FILING THE RETURN REQUIRED
PURSUANT TO SECTION FOURTEEN HUNDRED SIXTY-TWO OF THIS ARTICLE. ANY
ELECTION MADE PURSUANT TO THIS PARAGRAPH SHALL BE IRREVOCABLE AND SHALL
APPLY TO EACH SUBSEQUENT TAXABLE YEAR BEGINNING ON OR AFTER JANUARY
S. 3456 16
FIRST, TWO THOUSAND TWELVE AND BEFORE JANUARY FIRST, TWO THOUSAND NINE-
TEEN, PROVIDED THAT THE STOCK OWNERSHIP AND ACTIVITIES REQUIREMENTS
DESCRIBED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH ARE MET OR SUCH CORPO-
RATION DESCRIBED IN SUBPARAGRAPH (II) OF THIS PARAGRAPH CONTINUES AS A
FINANCIAL SUBSIDIARY.
(3) FOR PURPOSES OF THIS SECTION, A FINANCIAL SUBSIDIARY MEANS A
CORPORATION (I) SIXTY-FIVE PERCENT OR MORE OF WHOSE VOTING STOCK IS
OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY BY A BANKING CORPORATION
DESCRIBED IN PARAGRAPH ONE, TWO OR THREE OF SUBSECTION (A) OF THIS
SECTION AND (II) IS DESCRIBED IN SECTION 5136A(G) OF THE REVISED STAT-
UTES OF THE UNITED STATES OR SECTION 46 OF THE FEDERAL DEPOSIT INSURANCE
ACT. FOR PURPOSES OF THIS ARTICLE, THE TERM "BANKING CORPORATION" SHALL
INCLUDE A CORPORATION ELECTING TO BE TAXED UNDER THIS ARTICLE PURSUANT
TO PARAGRAPH TWO OF THIS SUBSECTION FOR SO LONG AS SUCH ELECTION SHALL
BE IN EFFECT.
(4) THE PROVISIONS OF THIS SUBSECTION SHALL NOT APPLY TO A CAPTIVE
REIT, A CAPTIVE RIC OR AN OVERCAPITALIZED CAPTIVE INSURANCE COMPANY.
(N)(1) NOTWITHSTANDING ANYTHING IN THIS ARTICLE TO THE CONTRARY, IF
ANY OF THE CONDITIONS DESCRIBED IN PARAGRAPH THREE OF THIS SUBSECTION
APPLY TO A CORPORATION THAT HAS MADE EITHER THE ELECTION TO BE TAXABLE
UNDER ARTICLE NINE-A OF THIS CHAPTER PURSUANT TO THE GRAMM-LEACH-BLILEY
TRANSITIONAL PROVISIONS IN THIS SECTION, OR THE ELECTION PURSUANT TO
SUBSECTION (D) OF THIS SECTION TO CONTINUE TO BE TAXABLE UNDER ARTICLE
NINE-A OF THIS CHAPTER (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 ARTICLE TO THE CONTRARY, IF ANY
OF THE CONDITIONS DESCRIBED IN PARAGRAPH THREE OF THIS SUBSECTION APPLY
TO A CORPORATION REQUIRED TO BE TAXABLE UNDER ARTICLE NINE-A OF THIS
CHAPTER PURSUANT TO THE GRAMM-LEACH-BLILEY TRANSITIONAL PROVISIONS IN
THIS SECTION (HEREINAFTER THE "GRANDFATHERED CORPORATION"), SUCH CORPO-
RATION, IF IT IS OTHERWISE DESCRIBED IN SUBSECTION (A) OF THIS SECTION,
SHALL BE TAXABLE UNDER THIS ARTICLE 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
SUBSECTION SHALL APPLY IF ANY OF THE FOLLOWING CONDITIONS EXIST OR OCCUR
WITH RESPECT TO THE ELECTING CORPORATION OR THE GRANDFATHERED CORPO-
RATION IN A TAXABLE YEAR (INCLUDING ANY SHORT TAXABLE YEAR) BEGINNING ON
OR AFTER JANUARY FIRST, TWO THOUSAND SEVEN:
(A) THE CORPORATION CEASES TO BE A TAXPAYER UNDER ARTICLE NINE-A OF
THIS CHAPTER;
(B) THE CORPORATION BECOMES SUBJECT TO THE FIXED DOLLAR MINIMUM TAX
UNDER PARAGRAPH (D) OF SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF
THIS CHAPTER;
(C) THE CORPORATION HAS NO WAGES OR RECEIPTS ALLOCABLE TO NEW YORK
STATE PURSUANT TO SUBDIVISION THREE OF SECTION TWO HUNDRED TEN 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
S. 3456 17
(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); PROVIDED THAT ANY
ACQUISITION THAT WAS COMPLETED ON OR BEFORE JANUARY THIRD, TWO THOUSAND
SEVEN SHALL BE TREATED FOR PURPOSES OF THIS SUBPARAGRAPH AS AN ACQUISI-
TION MADE BEFORE JANUARY FIRST, TWO THOUSAND SEVEN; 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 TWO HUNDRED TEN 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 IMME-
DIATELY PRIOR TO SUCH ACQUISITION AND AS A RESULT OF SUCH ACQUISITION
THE CORPORATION 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), (II) OR (III)
OF PARAGRAPH NINE OF SUBSECTION (A) OF THIS SECTION.
§ 1453. COMPUTATIONS OF ENTIRE NET INCOME. (A) ENTIRE NET INCOME MEANS
TOTAL NET INCOME FROM ALL SOURCES WHICH SHALL BE THE SAME AS THE ENTIRE
TAXABLE INCOME (BUT NOT ALTERNATIVE MINIMUM TAXABLE INCOME).
(1) WHICH THE TAXPAYER IS REQUIRED TO REPORT TO THE UNITED STATES
TREASURY DEPARTMENT, OR
(2) WHICH THE TAXPAYER, IN THE CASE OF A CORPORATION WHICH IS EXEMPT
FROM FEDERAL INCOME TAX (OTHER THAN THE TAX ON UNRELATED BUSINESS TAXA-
BLE INCOME IMPOSED UNDER SECTION 511 OF THE INTERNAL REVENUE CODE) BUT
IS SUBJECT TO TAX UNDER THIS ARTICLE, WOULD HAVE BEEN REQUIRED TO REPORT
TO THE UNITED STATES TREASURY DEPARTMENT BUT FOR SUCH EXEMPTION, OR
(3) WHICH, IN THE CASE OF A CORPORATION ORGANIZED UNDER THE LAWS OF A
COUNTRY OTHER THAN THE UNITED STATES, IS EFFECTIVELY CONNECTED WITH THE
CONDUCT OF A TRADE OR BUSINESS WITHIN THE UNITED STATES AS DETERMINED
UNDER SECTION 882 OF THE INTERNAL REVENUE CODE SUBJECT TO THE MODIFICA-
TIONS AND ADJUSTMENTS HEREINAFTER PROVIDED, OR
(4) WHICH THE TAXPAYER WOULD HAVE BEEN REQUIRED TO REPORT TO THE
UNITED STATES TREASURY DEPARTMENT IF IT HAD NOT MADE THE ELECTION UNDER
SUBCHAPTER S OF CHAPTER ONE OF THE INTERNAL REVENUE CODE.
(B) ENTIRE NET INCOME SHALL BE COMPUTED WITHOUT THE DEDUCTION OR
EXCLUSION OF:
(1) (A) IN THE CASE OF A CORPORATION ORGANIZED UNDER THE LAWS OF A
COUNTRY OTHER THAN THE UNITED STATES, (I) ANY PART OF ANY INCOME FROM
DIVIDENDS OR INTEREST ON ANY KIND OF STOCK, SECURITIES OR INDEBTEDNESS,
BUT ONLY IF SUCH INCOME IS TREATED AS EFFECTIVELY CONNECTED WITH THE
CONDUCT OF A TRADE OR BUSINESS IN THE UNITED STATES PURSUANT TO SECTION
EIGHT HUNDRED SIXTY-FOUR OF THE INTERNAL REVENUE CODE, (II) ANY INCOME
EXEMPT FROM FEDERAL TAXABLE INCOME UNDER ANY TREATY OBLIGATION OF THE
UNITED STATES, BUT ONLY IF SUCH INCOME WOULD BE TREATED AS EFFECTIVELY
CONNECTED IN ABSENCE OF SUCH EXEMPTION, PROVIDED THAT SUCH TREATY OBLI-
GATION DOES NOT PRECLUDE THE TAXATION OF SUCH INCOME BY A STATE, OR
(III) ANY INCOME WHICH WOULD BE TREATED AS EFFECTIVELY CONNECTED IF SUCH
INCOME WERE NOT EXCLUDED FROM GROSS INCOME PURSUANT TO SUBSECTION (A) OF
SECTION ONE HUNDRED THREE OF THE INTERNAL REVENUE CODE; (B) IN THE CASE
OF ANY OTHER CORPORATION, ANY PART OF ANY INCOME FROM DIVIDENDS OR
INTEREST ON ANY KIND OF STOCK, SECURITIES OR INDEBTEDNESS; (C) EXCEPT
THAT FOR PURPOSES OF SUBPARAGRAPHS (A) AND (B) OF THIS PARAGRAPH THERE
S. 3456 18
SHALL BE EXCLUDED ANY AMOUNTS TREATED AS DIVIDENDS PURSUANT TO SECTION
SEVENTY-EIGHT OF THE INTERNAL REVENUE CODE AND ANY AMOUNTS DESCRIBED IN
PARAGRAPHS ELEVEN AND TWELVE OF SUBSECTION (E) OF THIS SECTION;
(2) TAXES ON OR MEASURED BY INCOME OR PROFITS PAID OR ACCRUED WITHIN
THE TAXABLE YEAR TO THE UNITED STATES, OR ANY OF ITS POSSESSIONS OR TO
ANY FOREIGN COUNTRY;
(3) PREMIUMS PAID FOR ENVIRONMENTAL REMEDIATION INSURANCE, AS DEFINED
IN SECTION TWENTY-THREE OF THIS CHAPTER, AND DEDUCTED IN DETERMINING
FEDERAL TAXABLE INCOME, TO THE EXTENT OF THE AMOUNT OF THE ENVIRONMENTAL
REMEDIATION INSURANCE CREDIT ALLOWED UNDER SUCH SECTION TWENTY-THREE AND
SUBSECTION (S) OF SECTION FOURTEEN HUNDRED FIFTY-SIX OF THIS ARTICLE;
(4) TAXES IMPOSED UNDER THIS ARTICLE, SECTIONS ONE HUNDRED EIGHTY-
THREE AND ONE HUNDRED EIGHTY-FOUR AND ARTICLE NINE-A OF THIS CHAPTER;
(5) IN THOSE INSTANCES WHERE A CREDIT FOR THE SPECIAL ADDITIONAL MORT-
GAGE RECORDING TAX IS ALLOWED UNDER PARAGRAPH ONE OF SUBSECTION (C) OF
SECTION FOURTEEN HUNDRED FIFTY-SIX OF THIS ARTICLE, THE AMOUNT ALLOWED
AS AN EXCLUSION OR DEDUCTION FOR THE SPECIAL ADDITIONAL MORTGAGE RECORD-
ING TAX IMPOSED BY SUBDIVISION ONE-A OF SECTION TWO HUNDRED FIFTY-THREE
OF THIS CHAPTER IN DETERMINING THE ENTIRE TAXABLE INCOME WHICH THE
TAXPAYER IS REQUIRED TO REPORT TO THE UNITED STATES TREASURY DEPARTMENT
FOR SUCH TAXABLE YEAR; AND
(6) UNLESS THE CREDIT ALLOWED PURSUANT TO SUBSECTION (C) OF SECTION
FOURTEEN HUNDRED FIFTY-SIX OF THIS ARTICLE IS REFLECTED IN THE COMPUTA-
TION OF THE GAIN OR LOSS SO AS TO RESULT IN AN INCREASE IN SUCH GAIN OR
DECREASE OF SUCH LOSS, FOR FEDERAL INCOME TAX PURPOSES, FROM THE SALE OR
OTHER DISPOSITION OF THE PROPERTY WITH RESPECT TO WHICH THE SPECIAL
ADDITIONAL MORTGAGE RECORDING TAX IMPOSED PURSUANT TO SUBDIVISION ONE-A
OF SECTION TWO HUNDRED FIFTY-THREE OF THIS CHAPTER WAS PAID, THE AMOUNT
OF THE SPECIAL ADDITIONAL MORTGAGE RECORDING TAX IMPOSED BY SUBDIVISION
ONE-A OF SECTION TWO HUNDRED FIFTY-THREE OF THIS CHAPTER WHICH WAS PAID
AND WHICH IS REFLECTED IN THE COMPUTATION OF THE BASIS OF THE PROPERTY
SO AS TO RESULT IN A DECREASE IN SUCH GAIN OR INCREASE IN SUCH LOSS FOR
FEDERAL INCOME TAX PURPOSES FROM THE SALE OR OTHER DISPOSITION OF THE
PROPERTY WITH RESPECT TO WHICH SUCH TAX WAS PAID.
(7) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER THIRTY-FIRST, NINETEEN
HUNDRED EIGHTY-ONE, EXCEPT WITH RESPECT TO PROPERTY WHICH IS A QUALIFIED
MASS COMMUTING VEHICLE DESCRIBED IN SUBPARAGRAPH (D) OF PARAGRAPH EIGHT
OF SUBSECTION (F) OF SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL
REVENUE CODE (RELATING TO QUALIFIED MASS COMMUTING VEHICLES), ANY AMOUNT
WHICH THE TAXPAYER CLAIMED AS A DEDUCTION IN COMPUTING ITS FEDERAL TAXA-
BLE INCOME SOLELY AS A RESULT OF AN ELECTION MADE PURSUANT TO THE
PROVISIONS OF SUCH PARAGRAPH EIGHT AS IT WAS IN EFFECT FOR AGREEMENTS
ENTERED INTO PRIOR TO JANUARY FIRST, NINETEEN HUNDRED EIGHTY-FOUR;
(8) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER THIRTY-FIRST, NINETEEN
HUNDRED EIGHTY-ONE, EXCEPT WITH RESPECT TO PROPERTY WHICH IS A QUALIFIED
MASS COMMUTING VEHICLE DESCRIBED IN SUBPARAGRAPH (D) OF PARAGRAPH EIGHT
OF SUBSECTION (F) OF SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL
REVENUE CODE (RELATING TO QUALIFIED MASS COMMUTING VEHICLES), ANY AMOUNT
WHICH THE TAXPAYER WOULD HAVE BEEN REQUIRED TO INCLUDE IN THE COMPUTA-
TION OF ITS FEDERAL TAXABLE INCOME HAD IT NOT MADE THE ELECTION PERMIT-
TED PURSUANT TO SUCH PARAGRAPH EIGHT AS IT WAS IN EFFECT FOR AGREEMENTS
ENTERED INTO PRIOR TO JANUARY FIRST, NINETEEN HUNDRED EIGHTY-FOUR;
(9) IN THE CASE OF PROPERTY PLACED IN SERVICE IN TAXABLE YEARS BEGIN-
NING BEFORE NINETEEN HUNDRED NINETY-FOUR, FOR TAXABLE YEARS BEGINNING
AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED EIGHTY-ONE, EXCEPT WITH
RESPECT TO PROPERTY SUBJECT TO THE PROVISIONS OF SECTION TWO HUNDRED
S. 3456 19
EIGHTY-F OF THE INTERNAL REVENUE CODE AND PROPERTY SUBJECT TO THE
PROVISIONS OF SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL REVENUE
CODE WHICH IS PLACED IN SERVICE IN THIS STATE IN TAXABLE YEARS BEGINNING
AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED EIGHTY-FOUR, THE AMOUNT
ALLOWABLE AS A DEDUCTION DETERMINED UNDER SECTION ONE HUNDRED SIXTY-
EIGHT OF THE INTERNAL REVENUE CODE;
(10) UPON THE DISPOSITION OF PROPERTY TO WHICH PARAGRAPH SEVEN OF
SUBSECTION (E) OF THIS SECTION APPLIES, THE AMOUNT, IF ANY, BY WHICH THE
AGGREGATE OF THE AMOUNTS DESCRIBED IN SUCH PARAGRAPH SEVEN ATTRIBUTABLE
TO SUCH PROPERTY EXCEEDS THE AGGREGATE OF THE AMOUNTS DESCRIBED IN PARA-
GRAPH NINE OF THIS SUBSECTION ATTRIBUTABLE TO SUCH PROPERTY,
(11) FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND
TEN, IN THE CASE OF A TAXPAYER SUBJECT TO THE PROVISIONS OF SECTION
585(C) OF THE INTERNAL REVENUE CODE, THE AMOUNT ALLOWED AS A DEDUCTION
PURSUANT TO SECTION 166 OF SUCH CODE, AND
(12) FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND
TEN, FOR TAXPAYERS SUBJECT TO THE PROVISIONS OF SUBSECTION (I) OF THIS
SECTION, TWENTY PERCENT OF THE EXCESS OF (A) THE AMOUNT DETERMINED
PURSUANT TO SUCH SUBSECTION (I) OVER (B) THE AMOUNT WHICH WOULD HAVE
BEEN ALLOWABLE HAD SUCH INSTITUTION MAINTAINED ITS BAD DEBT RESERVE FOR
ALL TAXABLE YEARS ON THE BASIS OF ACTUAL EXPERIENCE.
(13) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER THIRTY-FIRST, TWO
THOUSAND TWO, IN THE CASE OF QUALIFIED PROPERTY DESCRIBED IN PARAGRAPH
TWO OF SUBSECTION K OF SECTION 168 OF THE INTERNAL REVENUE CODE, OTHER
THAN QUALIFIED RESURGENCE ZONE PROPERTY DESCRIBED IN SUBSECTION (U) OF
THIS SECTION, AND OTHER THAN QUALIFIED NEW YORK LIBERTY ZONE PROPERTY
DESCRIBED IN PARAGRAPH TWO OF SUBSECTION B OF SECTION 1400L OF THE
INTERNAL REVENUE CODE (WITHOUT REGARD TO CLAUSE (I) OF SUBPARAGRAPH (C)
OF SUCH PARAGRAPH), WHICH WAS PLACED IN SERVICE ON OR AFTER JUNE FIRST,
TWO THOUSAND THREE, THE AMOUNT ALLOWABLE AS A DEDUCTION UNDER SECTION
167 OF THE INTERNAL REVENUE CODE.
(14) THE AMOUNT OF ANY DEDUCTION ALLOWED PURSUANT TO SECTION ONE
HUNDRED NINETY-NINE OF THE INTERNAL REVENUE CODE.
(15) THE AMOUNT OF ANY FEDERAL DEDUCTION FOR TAXES IMPOSED UNDER ARTI-
CLE TWENTY-THREE OF THIS CHAPTER.
(C) (1) EXCEPT AS OTHERWISE PROVIDED IN PARAGRAPHS TWO, THREE AND FOUR
OF THIS SUBSECTION, IN THE CASE OF THE SALE OR EXCHANGE OF PROPERTY BY A
TAXPAYER WHICH HAS BEEN SUBJECT TO ARTICLE NINE-B OR NINE-C OF THIS
CHAPTER (AS SUCH ARTICLES WERE IN EFFECT ON OR BEFORE DECEMBER THIRTY-
FIRST, NINETEEN HUNDRED SEVENTY-TWO) WHERE THE PROPERTY HAS A HIGHER
ADJUSTED BASIS FOR NEW YORK TAX PURPOSES THAN FOR FEDERAL TAX PURPOSES,
THERE SHALL BE ALLOWED AS A DEDUCTION FROM ENTIRE NET INCOME, THE
PORTION OF ANY GAIN OR LOSS ON SUCH SALE WHICH EQUALS THE DIFFERENCE IN
SUCH BASIS.
(2) IN CASE OF PROPERTY OF A TAXPAYER, OTHER THAN A SAVINGS BANK OR A
SAVINGS AND LOAN ASSOCIATION, ACQUIRED PRIOR TO JANUARY FIRST, NINETEEN
HUNDRED TWENTY-SIX, AND DISPOSED OF THEREAFTER, THE COMPUTATION OF
ENTIRE NET INCOME SHALL BE MODIFIED AS FOLLOWS:
(I) NO GAIN SHALL BE DEEMED TO HAVE BEEN DERIVED IF EITHER THE COST OR
THE FAIR MARKET PRICE OR VALUE ON JANUARY FIRST, NINETEEN HUNDRED TWEN-
TY-SIX, EXCEEDS THE VALUE REALIZED;
(II) NO LOSS SHALL BE DEEMED TO HAVE BEEN SUSTAINED IF EITHER THE COST
OR THE FAIR MARKET PRICE OR VALUE ON JANUARY FIRST, NINETEEN HUNDRED
TWENTY-SIX, IS LESS THAN THE VALUE REALIZED;
(III) WHERE BOTH THE COST AND THE FAIR MARKET PRICE OR VALUE ON JANU-
ARY FIRST, NINETEEN HUNDRED TWENTY-SIX, ARE LESS THAN THE VALUE REAL-
S. 3456 20
IZED, THE BASIS FOR COMPUTING GAIN SHALL BE THE COST OR THE FAIR MARKET
PRICE OR VALUE ON SUCH DATE, WHICHEVER IS HIGHER;
(IV) WHERE BOTH THE COST AND THE FAIR MARKET PRICE OR VALUE ON JANUARY
FIRST, NINETEEN HUNDRED TWENTY-SIX, ARE IN EXCESS OF THE VALUE REALIZED,
THE BASIS FOR COMPUTING LOSS SHALL BE THE COST OR THE FAIR MARKET PRICE
OR VALUE ON SUCH DATE, WHICHEVER IS LOWER.
(3) IN CASE OF PROPERTY OF A SAVINGS BANK ACQUIRED PRIOR TO JANUARY
FIRST, NINETEEN HUNDRED FORTY-FOUR, AND DISPOSED OF THEREAFTER, IN
COMPUTING ENTIRE NET INCOME THE BASIS OF SUCH PROPERTY SHALL BE THE
VALUE AS OF DECEMBER THIRTY-FIRST, NINETEEN HUNDRED FORTY-THREE, AS SET
FORTH IN SUCH BANK'S REPORT OF SURPLUS AND UNDIVIDED EARNINGS FILED WITH
THE TAX COMMISSION AS OF THAT DATE.
(4) IN CASE OF PROPERTY OF A SAVINGS AND LOAN ASSOCIATION, ACQUIRED
PRIOR TO JANUARY FIRST, NINETEEN HUNDRED FIFTY-THREE, AND DISPOSED OF
THEREAFTER, THE COMPUTATION OF ENTIRE NET INCOME SHALL BE MODIFIED AS
FOLLOWS:
(I) NO GAIN SHALL BE DEEMED TO HAVE BEEN DERIVED IF EITHER THE COST OR
THE FAIR MARKET PRICE OR VALUE ON JANUARY FIRST, NINETEEN HUNDRED
FIFTY-THREE, EXCEEDS THE VALUE REALIZED;
(II) NO LOSS SHALL BE DEEMED TO HAVE BEEN SUSTAINED IF EITHER THE COST
OR THE FAIR MARKET PRICE OR VALUE ON JANUARY FIRST, NINETEEN HUNDRED
FIFTY-THREE, IS LESS THAN THE VALUE REALIZED;
(III) WHERE BOTH THE COST AND THE FAIR MARKET PRICE OR VALUE ON JANU-
ARY FIRST, NINETEEN HUNDRED FIFTY-THREE, ARE LESS THAN THE VALUE REAL-
IZED, THE BASIS FOR COMPUTING GAIN SHALL BE THE COST OR THE FAIR MARKET
PRICE OR VALUE ON SUCH DATE, WHICHEVER IS HIGHER;
(IV) WHERE BOTH THE COST AND THE FAIR MARKET PRICE OR VALUE ON JANUARY
FIRST, NINETEEN HUNDRED FIFTY-THREE, ARE IN EXCESS OF THE VALUE REAL-
IZED, THE BASIS FOR COMPUTING LOSS SHALL BE THE COST OR THE FAIR MARKET
PRICE OR VALUE ON SUCH DATE, WHICHEVER IS LOWER.
(D) ENTIRE NET INCOME SHALL NOT INCLUDE ANY REFUND OR CREDIT OF A TAX
FOR WHICH NO EXCLUSION OR DEDUCTION WAS ALLOWED IN DETERMINING THE
TAXPAYER'S ENTIRE NET INCOME UNDER THIS ARTICLE OR ARTICLES NINE-A OR
TWENTY-THREE OF THIS CHAPTER FOR ANY PRIOR YEAR.
(E) THERE SHALL BE ALLOWED AS A DEDUCTION IN DETERMINING ENTIRE NET
INCOME, TO THE EXTENT NOT DEDUCTIBLE IN DETERMINING FEDERAL TAXABLE
INCOME:
(1) INTEREST ON INDEBTEDNESS INCURRED OR CONTINUED TO PURCHASE OR
CARRY OBLIGATIONS OR SECURITIES THE INCOME FROM WHICH IS SUBJECT TO TAX
UNDER THIS ARTICLE BUT EXEMPT FROM FEDERAL INCOME TAX,
(2) ORDINARY AND NECESSARY EXPENSES PAID OR INCURRED DURING THE TAXA-
BLE YEAR ATTRIBUTABLE TO INCOME WHICH IS SUBJECT TO TAX UNDER THIS ARTI-
CLE BUT EXEMPT FROM FEDERAL INCOME TAX,
(3) THE AMORTIZABLE BOND PREMIUM FOR THE TAXABLE YEAR ON ANY BOND THE
INTEREST ON WHICH IS SUBJECT TO TAX UNDER THIS ARTICLE BUT EXEMPT FROM
FEDERAL INCOME TAX,
(4) THAT PORTION OF WAGES OR SALARIES PAID OR INCURRED FOR THE TAXABLE
YEAR FOR WHICH A DEDUCTION IS NOT ALLOWED PURSUANT TO THE PROVISIONS OF
SECTION TWO HUNDRED EIGHTY-C OF THE INTERNAL REVENUE CODE,
(5) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER THIRTY-FIRST, NINETEEN
HUNDRED EIGHTY-ONE, EXCEPT WITH RESPECT TO PROPERTY WHICH IS A QUALIFIED
MASS COMMUTING VEHICLE DESCRIBED IN SUBPARAGRAPH (D) OF PARAGRAPH EIGHT
OF SUBSECTION (F) OF SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL
REVENUE CODE (RELATING TO QUALIFIED MASS COMMUTING VEHICLES), ANY AMOUNT
WHICH IS INCLUDED IN THE TAXPAYER'S FEDERAL TAXABLE INCOME SOLELY AS A
RESULT OF AN ELECTION MADE PURSUANT TO THE PROVISIONS OF SUCH PARAGRAPH
S. 3456 21
EIGHT AS IT WAS IN EFFECT FOR AGREEMENTS ENTERED INTO PRIOR TO JANUARY
FIRST, NINETEEN HUNDRED EIGHTY-FOUR,
(6) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER THIRTY-FIRST, NINETEEN
HUNDRED EIGHTY-ONE, EXCEPT WITH RESPECT TO PROPERTY WHICH IS A QUALIFIED
MASS COMMUTING VEHICLE DESCRIBED IN SUBPARAGRAPH (D) OF PARAGRAPH EIGHT
OF SUBSECTION (F) OF SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL
REVENUE CODE (RELATING TO QUALIFIED MASS COMMUTING VEHICLES), ANY AMOUNT
WHICH THE TAXPAYER COULD HAVE EXCLUDED FROM FEDERAL TAXABLE INCOME HAD
IT NOT MADE THE ELECTION PROVIDED FOR IN SUCH PARAGRAPH EIGHT AS IT WAS
IN EFFECT FOR AGREEMENTS ENTERED INTO PRIOR TO JANUARY FIRST, NINETEEN
HUNDRED EIGHTY-FOUR,
(7) IN THE CASE OF PROPERTY PLACED IN SERVICE IN TAXABLE YEARS BEGIN-
NING BEFORE NINETEEN HUNDRED NINETY-FOUR, FOR TAXABLE YEARS BEGINNING
AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED EIGHTY-ONE, EXCEPT WITH
RESPECT TO PROPERTY SUBJECT TO THE PROVISIONS OF SECTION TWO HUNDRED
EIGHTY-F OF THE INTERNAL REVENUE CODE AND PROPERTY SUBJECT TO THE
PROVISIONS OF SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL REVENUE
CODE WHICH IS PLACED IN SERVICE IN THIS STATE IN TAXABLE YEARS BEGINNING
AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED EIGHTY-FOUR, AND PROVIDED
A DEDUCTION HAS NOT BEEN EXCLUDED FROM ENTIRE NET INCOME PURSUANT TO
PARAGRAPH SEVEN OF SUBSECTION (B) OF THIS SECTION, AN AMOUNT WITH
RESPECT TO PROPERTY WHICH IS SUBJECT TO THE PROVISIONS OF SECTION ONE
HUNDRED SIXTY-EIGHT OF THE INTERNAL REVENUE CODE EQUAL TO THE AMOUNT
ALLOWABLE AS THE DEPRECIATION DEDUCTION UNDER SECTION ONE HUNDRED
SIXTY-SEVEN OF THE INTERNAL REVENUE CODE AS SUCH SECTION WOULD HAVE
APPLIED TO PROPERTY PLACED IN SERVICE ON DECEMBER THIRTY-FIRST, NINETEEN
HUNDRED EIGHTY,
(8) UPON THE DISPOSITION OF PROPERTY TO WHICH PARAGRAPH SEVEN OF THIS
SUBSECTION APPLIES, THE AMOUNT, IF ANY, BY WHICH THE AGGREGATE OF THE
AMOUNTS DESCRIBED IN PARAGRAPH NINE OF SUBSECTION (B) OF THIS SECTION
ATTRIBUTABLE TO SUCH PROPERTY EXCEEDS THE AGGREGATE OF THE AMOUNTS
DESCRIBED IN PARAGRAPH SEVEN OF THIS SUBSECTION ATTRIBUTABLE TO SUCH
PROPERTY,
(9) ANY AMOUNT OF MONEY OR OTHER PROPERTY RECEIVED FROM THE FEDERAL
DEPOSIT INSURANCE CORPORATION PURSUANT TO SUBSECTION (C) OF SECTION
THIRTEEN OF THE FEDERAL DEPOSIT INSURANCE ACT, AS AMENDED, REGARDLESS OF
WHETHER ANY NOTE OR OTHER INSTRUMENT IS ISSUED IN EXCHANGE THEREFOR,
(10) ANY AMOUNT OF MONEY OR OTHER PROPERTY RECEIVED FROM 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, REGARDLESS OF WHETHER ANY NOTE
OR OTHER INSTRUMENT IS ISSUED IN EXCHANGE THEREFOR,
(11) (I) SEVENTEEN PERCENT OF INTEREST INCOME FROM SUBSIDIARY CAPITAL,
AND
(II) SIXTY PERCENT OF DIVIDEND INCOME FROM SUBSIDIARY CAPITAL EXCEPT
AS PROVIDED IN PARAGRAPH EIGHTEEN OF THIS SUBSECTION, AND
(III) SIXTY PERCENT OF THE AMOUNT BY WHICH GAINS FROM SUBSIDIARY CAPI-
TAL EXCEED LOSSES FROM SUBSIDIARY CAPITAL, TO THE EXTENT SUCH GAINS AND
LOSSES WERE TAKEN INTO ACCOUNT IN DETERMINING THE ENTIRE TAXABLE INCOME
REFERRED TO IN SUBSECTION (A) OF THIS SECTION,
(12) TWENTY-TWO AND ONE-HALF PERCENT OF INTEREST INCOME ON OBLIGATIONS
OF NEW YORK STATE, OR OF ANY POLITICAL SUBDIVISION THEREOF, OR OF THE
UNITED STATES, OTHER THAN OBLIGATIONS HELD FOR RESALE IN CONNECTION WITH
REGULAR TRADING ACTIVITIES,
(13) FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND
TEN, IN THE CASE OF A TAXPAYER WHICH RECAPTURES ITS BALANCE OF THE
S. 3456 22
RESERVE FOR LOSSES ON LOANS FOR FEDERAL INCOME TAX PURPOSES PURSUANT TO
SECTION 585(C) OF THE INTERNAL REVENUE CODE, ANY AMOUNT WHICH IS
INCLUDED IN FEDERAL TAXABLE INCOME PURSUANT TO SECTION 585(C) OF SUCH
CODE,
(14) FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND
TEN, IN THE CASE OF A TAXPAYER SUBJECT TO THE PROVISIONS OF SECTION
585(C) OF THE INTERNAL REVENUE CODE, ANY AMOUNT WHICH IS INCLUDED IN
FEDERAL TAXABLE INCOME AS A RESULT OF A RECOVERY OF A LOAN.
(15) FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND
TEN, IN THE CASE OF A TAXPAYER WHICH IS CURRENTLY OR HAS PREVIOUSLY BEEN
SUBJECT TO SUBSECTION (H) OF THIS SECTION, ANY AMOUNT WHICH IS INCLUDED
IN FEDERAL TAXABLE INCOME PURSUANT TO SECTION 593(E)(2) OF THE INTERNAL
REVENUE CODE, AND ANY OTHER AMOUNT SO INCLUDED AS A RESULT OF A RECOVERY
OF OR TERMINATION FROM THE USE OF A BAD DEBT RESERVE AS DEFINED IN
SECTION 593 OF SUCH CODE AS IN EXISTENCE ON DECEMBER THIRTY-FIRST, NINE-
TEEN HUNDRED NINETY-FIVE AS A RESULT OF FEDERAL LEGISLATION ENACTED
AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED NINETY-FIVE.
(16) THE AMOUNT DEDUCTIBLE PURSUANT TO SUBSECTION (P) OF THIS SECTION.
(17) 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 ARTICLE NINE-A, THIS ARTICLE OR ARTICLE THIRTY-
THREE OF THIS CHAPTER.
(F) PROVIDED THE TAXPAYER HAS NOT MADE AN ELECTION PURSUANT TO PARA-
GRAPH TWO OF SUBSECTION (B) OF SECTION FOURTEEN HUNDRED FIFTY-FOUR OF
THIS ARTICLE, THERE SHALL BE ALLOWED AS A DEDUCTION IN DETERMINING
ENTIRE NET INCOME, TO THE EXTENT NOT DEDUCTIBLE IN DETERMINING FEDERAL
TAXABLE INCOME, THE ADJUSTED ELIGIBLE NET INCOME OF AN INTERNATIONAL
BANKING FACILITY DETERMINED AS FOLLOWS:
(1) THE ELIGIBLE NET INCOME OF AN INTERNATIONAL BANKING FACILITY SHALL
BE THE AMOUNT REMAINING AFTER SUBTRACTING FROM THE ELIGIBLE GROSS INCOME
THE APPLICABLE EXPENSES.
(2) ELIGIBLE GROSS INCOME SHALL BE THE GROSS INCOME DERIVED BY AN
INTERNATIONAL BANKING FACILITY FROM:
(A) MAKING, ARRANGING FOR, PLACING OR SERVICING LOANS TO FOREIGN
PERSONS, PROVIDED, HOWEVER, THAT IN THE CASE OF A FOREIGN PERSON WHICH
IS AN INDIVIDUAL, OR WHICH IS A FOREIGN BRANCH OF A DOMESTIC CORPORATION
(OTHER THAN A BANK), OR WHICH IS A FOREIGN CORPORATION OR FOREIGN PART-
NERSHIP WHICH IS EIGHTY PER CENTUM OR MORE OWNED OR CONTROLLED, EITHER
DIRECTLY OR INDIRECTLY, BY ONE OR MORE DOMESTIC CORPORATIONS (OTHER THAN
BANKS), DOMESTIC PARTNERSHIPS OR RESIDENT INDIVIDUALS, SUBSTANTIALLY ALL
THE PROCEEDS OF THE LOAN ARE FOR USE OUTSIDE OF THE UNITED STATES;
(B) MAKING OR PLACING DEPOSITS WITH FOREIGN PERSONS WHICH ARE BANKS OR
FOREIGN BRANCHES OF BANKS (INCLUDING FOREIGN SUBSIDIARIES OR FOREIGN
BRANCHES OF THE TAXPAYER) OR WITH OTHER INTERNATIONAL BANKING FACILI-
TIES; OR
(C) ENTERING INTO FOREIGN EXCHANGE TRADING OR HEDGING TRANSACTIONS
RELATED TO ANY OF THE TRANSACTIONS DESCRIBED IN THIS PARAGRAPH.
(3) APPLICABLE EXPENSES SHALL BE ANY EXPENSES OR OTHER DEDUCTIONS
ATTRIBUTABLE, DIRECTLY OR INDIRECTLY, TO THE ELIGIBLE GROSS INCOME
DESCRIBED IN PARAGRAPH TWO OF THIS SUBSECTION.
(4) ADJUSTED ELIGIBLE NET INCOME SHALL BE DETERMINED BY SUBTRACTING
FROM ELIGIBLE NET INCOME THE INELIGIBLE FUNDING AMOUNT, AND BY SUBTRACT-
ING FROM THE AMOUNT THEN REMAINING THE FLOOR AMOUNT.
S. 3456 23
(5) THE INELIGIBLE FUNDING AMOUNT SHALL BE THE AMOUNT, IF ANY, DETER-
MINED BY MULTIPLYING ELIGIBLE NET INCOME BY A FRACTION, THE NUMERATOR OF
WHICH IS THE AVERAGE AGGREGATE AMOUNT FOR THE TAXABLE YEAR OF ALL
LIABILITIES, INCLUDING DEPOSITS, AND OTHER SOURCES OF FUNDS OF THE
INTERNATIONAL BANKING FACILITY WHICH WERE NOT OWED TO OR RECEIVED FROM
FOREIGN PERSONS, AND THE DENOMINATOR OF WHICH IS THE AVERAGE AGGREGATE
AMOUNT FOR THE TAXABLE YEAR OF ALL LIABILITIES, INCLUDING DEPOSITS AND
OTHER SOURCES OF FUNDS OF THE INTERNATIONAL BANKING FACILITY.
(6) THE FLOOR AMOUNT SHALL BE THE AMOUNT, IF ANY, DETERMINED BY MULTI-
PLYING THE AMOUNT REMAINING AFTER SUBTRACTING THE INELIGIBLE FUNDING
AMOUNT FROM THE ELIGIBLE NET INCOME BY A FRACTION, NOT GREATER THAN ONE,
WHICH IS DETERMINED AS FOLLOWS:
(A) THE NUMERATOR SHALL BE
(I) THE PERCENTAGE, AS SET FORTH IN SUBPARAGRAPH (C) OF THIS PARA-
GRAPH, OF THE AVERAGE AGGREGATE AMOUNT OF THE TAXPAYER'S LOANS TO
FOREIGN PERSONS AND DEPOSITS WITH FOREIGN PERSONS WHICH ARE BANKS OR
FOREIGN BRANCHES OF BANKS (INCLUDING FOREIGN SUBSIDIARIES OR FOREIGN
BRANCHES OF THE TAXPAYER), WHICH LOANS AND DEPOSITS WERE RECORDED IN THE
FINANCIAL ACCOUNTS OF THE TAXPAYER FOR ITS BRANCHES, AGENCIES AND
OFFICES WITHIN THE STATE FOR TAXABLE YEARS NINETEEN HUNDRED SEVENTY-
FIVE, NINETEEN HUNDRED SEVENTY-SIX AND NINETEEN HUNDRED SEVENTY-SEVEN,
MINUS
(II) THE AVERAGE AGGREGATE AMOUNT OF SUCH LOANS AND SUCH DEPOSITS FOR
THE TAXABLE YEAR OF THE TAXPAYER (OTHER THAN SUCH LOANS AND DEPOSITS OF
AN INTERNATIONAL BANKING FACILITY), PROVIDED, HOWEVER, THAT IN NO CASE
SHALL THE AMOUNT DETERMINED IN THIS CLAUSE EXCEED THE AMOUNT DETERMINED
IN CLAUSE (I) OF THIS SUBPARAGRAPH; AND
(B) THE DENOMINATOR SHALL BE THE AVERAGE AGGREGATE AMOUNT OF THE LOANS
TO FOREIGN PERSONS AND DEPOSITS WITH FOREIGN PERSONS WHICH ARE BANKS OR
FOREIGN BRANCHES OF BANKS (INCLUDING FOREIGN SUBSIDIARIES OR FOREIGN
BRANCHES OF THE TAXPAYER), WHICH LOANS AND DEPOSITS WERE RECORDED IN THE
FINANCIAL ACCOUNTS OF THE TAXPAYER'S INTERNATIONAL BANKING FACILITY FOR
THE TAXABLE YEAR.
(C) THE PERCENTAGE SHALL BE ONE HUNDRED PERCENT FOR THE FIRST TAXABLE
YEAR IN WHICH THE TAXPAYER ESTABLISHES AN INTERNATIONAL BANKING FACILITY
AND FOR THE NEXT SUCCEEDING FOUR TAXABLE YEARS. THE PERCENTAGE SHALL BE
EIGHTY PERCENT FOR THE FIFTH, SIXTY PERCENT FOR THE SIXTH, FORTY PERCENT
FOR THE SEVENTH, AND TWENTY PERCENT FOR THE EIGHTH TAXABLE YEAR NEXT
SUCCEEDING THE YEAR SUCH TAXPAYER ESTABLISHES SUCH INTERNATIONAL BANKING
FACILITY, AND ZERO IN THE NINTH SUCCEEDING YEAR AND THEREAFTER.
(7) IN THE EVENT ADJUSTED ELIGIBLE NET INCOME IS A LOSS, THE AMOUNT OF
SUCH LOSS SHALL BE ADDED TO ENTIRE NET INCOME.
(8) FOR THE PURPOSES OF THIS SUBSECTION THE TERM "FOREIGN PERSON"
MEANS
(A) AN INDIVIDUAL WHO IS NOT A RESIDENT OF THE UNITED STATES,
(B) A FOREIGN CORPORATION, A FOREIGN PARTNERSHIP OR A FOREIGN TRUST,
AS DEFINED IN SECTION SEVENTY-SEVEN HUNDRED ONE OF THE INTERNAL REVENUE
CODE, OTHER THAN A DOMESTIC BRANCH THEREOF,
(C) A FOREIGN BRANCH OF A DOMESTIC CORPORATION (INCLUDING THE TAXPAY-
ER),
(D) A FOREIGN GOVERNMENT OR AN INTERNATIONAL ORGANIZATION OR AN AGENCY
OF EITHER, OR
(E) AN INTERNATIONAL BANKING FACILITY.
FOR PURPOSES OF THIS PARAGRAPH, THE TERMS "FOREIGN" AND "DOMESTIC"
SHALL HAVE THE SAME MEANING AS SET FORTH IN SECTION SEVENTY-SEVEN
HUNDRED ONE OF THE INTERNAL REVENUE CODE.
S. 3456 24
(G) ENTIRE NET INCOME SHALL BE COMPUTED WITHOUT REGARD TO THE
REDUCTION IN THE BASIS OF PROPERTY THAT IS REQUIRED BY SECTION THREE
HUNDRED SIXTY-TWO OF THE INTERNAL REVENUE CODE, BECAUSE OF ANY AMOUNT OF
MONEY OR OTHER PROPERTY RECEIVED FROM THE FEDERAL DEPOSIT INSURANCE
CORPORATION PURSUANT TO SUBSECTION (C) OF SECTION THIRTEEN OF THE FEDER-
AL DEPOSIT INSURANCE ACT, AS AMENDED, OR FROM 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.
(H) (1) FOR PURPOSES OF THIS SUBSECTION, A "THRIFT INSTITUTION" IS A
BANKING CORPORATION WHICH SATISFIES THE REQUIREMENTS OF SUBPARAGRAPHS
(A) AND (B) OF THIS PARAGRAPH.
(A) SUCH BANKING CORPORATION MUST BE (I) A BANKING CORPORATION AS
DEFINED IN PARAGRAPH ONE OF SUBSECTION (A) OF SECTION FOURTEEN HUNDRED
FIFTY-TWO OF THIS ARTICLE CREATED OR AUTHORIZED TO DO BUSINESS UNDER
ARTICLE SIX OR TEN OF THE BANKING LAW, (II) A BANKING CORPORATION AS
DEFINED IN PARAGRAPH TWO OR SEVEN OF SUBSECTION (A) OF SECTION FOURTEEN
HUNDRED FIFTY-TWO OF THIS ARTICLE WHICH IS DOING A BUSINESS SUBSTANTIAL-
LY SIMILAR TO THE BUSINESS WHICH A CORPORATION OR ASSOCIATION MAY BE
CREATED TO DO UNDER ARTICLE SIX OR TEN OF THE BANKING LAW OR ANY BUSI-
NESS WHICH A CORPORATION OR ASSOCIATION IS AUTHORIZED BY SUCH ARTICLE TO
DO, OR (III) A BANKING CORPORATION AS DEFINED IN PARAGRAPH FOUR OR FIVE
OF SUBSECTION (A) OF SECTION FOURTEEN HUNDRED FIFTY-TWO OF THIS ARTICLE.
(B) AT LEAST SIXTY PERCENT OF THE AMOUNT OF THE TOTAL ASSETS (AT THE
CLOSE OF THE TAXABLE YEAR) OF SUCH BANKING CORPORATION MUST CONSIST OF
(I) CASH; (II) OBLIGATIONS OF THE UNITED STATES OR OF A STATE OR POLI-
TICAL SUBDIVISION THEREOF, AND STOCK OR OBLIGATIONS OF A CORPORATION
WHICH IS AN INSTRUMENTALITY OF THE UNITED STATES OR OF A STATE OR POLI-
TICAL SUBDIVISION THEREOF, BUT NOT INCLUDING OBLIGATIONS THE INTEREST ON
WHICH IS EXCLUDABLE FROM GROSS INCOME UNDER SECTION 103 OF THE INTERNAL
REVENUE CODE; (III) LOANS SECURED BY A DEPOSIT OR SHARE OF A MEMBER;
(IV) LOANS SECURED BY AN INTEREST IN REAL PROPERTY WHICH IS (OR FROM THE
PROCEEDS OF THE LOAN, WILL BECOME) RESIDENTIAL REAL PROPERTY OR REAL
PROPERTY USED PRIMARILY FOR CHURCH PURPOSES, LOANS MADE FOR THE IMPROVE-
MENT OF RESIDENTIAL REAL PROPERTY OR REAL PROPERTY USED PRIMARILY FOR
CHURCH PURPOSES, PROVIDED THAT FOR PURPOSES OF THIS CLAUSE, RESIDENTIAL
REAL PROPERTY SHALL INCLUDE SINGLE OR MULTIFAMILY DWELLINGS, FACILITIES
IN RESIDENTIAL DEVELOPMENTS DEDICATED TO PUBLIC USE OR PROPERTY USED ON
A NONPROFIT BASIS FOR RESIDENTS, AND MOBILE HOMES NOT USED ON A TRAN-
SIENT BASIS; (V) PROPERTY ACQUIRED THROUGH THE LIQUIDATION OF DEFAULTED
LOANS DESCRIBED IN CLAUSE (IV) OF THIS SUBPARAGRAPH; (VI) ANY REGULAR OR
RESIDUAL INTEREST IN A REMIC, AS SUCH TERM IS DEFINED IN SECTION 860D OF
THE INTERNAL REVENUE CODE AND ANY REGULAR INTEREST IN A FASIT, AS SUCH
TERM IS DEFINED IN SECTION 860L OF THE INTERNAL REVENUE CODE, BUT ONLY
IN THE PROPORTION WHICH THE ASSETS OF SUCH REMIC OR FASIT CONSIST OF
PROPERTY DESCRIBED IN ANY OF THE PRECEDING CLAUSES OF THIS SUBPARAGRAPH,
EXCEPT THAT IF NINETY-FIVE PERCENT OR MORE OF THE ASSETS OF SUCH REMIC
OR FASIT ARE ASSETS DESCRIBED IN CLAUSES (I) THROUGH (V) OF THIS SUBPAR-
AGRAPH, THE ENTIRE INTEREST IN THE REMIC OR FASIT SHALL QUALIFY; (VII)
ANY MORTGAGE-BACKED SECURITY WHICH REPRESENTS OWNERSHIP OF A FRACTIONAL
UNDIVIDED INTEREST IN A TRUST, THE ASSETS OF WHICH CONSIST PRIMARILY OF
MORTGAGE LOANS, PROVIDED THAT THE REAL PROPERTY WHICH SERVES AS SECURITY
FOR THE LOANS IS (OR FROM THE PROCEEDS OF THE LOAN, WILL BECOME) THE
TYPE OF PROPERTY DESCRIBED IN CLAUSE (IV) OF THIS SUBPARAGRAPH AND ANY
COLLATERALIZED MORTGAGE OBLIGATION, THE SECURITY FOR WHICH CONSISTS
PRIMARILY OF MORTGAGE LOANS, PROVIDED THAT THE REAL PROPERTY WHICH
S. 3456 25
SERVES AS SECURITY FOR THE LOANS IS (OR FROM THE PROCEEDS OF THE LOAN,
WILL BECOME) THE TYPE OF PROPERTY DESCRIBED IN CLAUSE (IV) OF THIS
SUBPARAGRAPH; (VIII) CERTIFICATES OF DEPOSIT IN, OR OBLIGATIONS OF, A
CORPORATION ORGANIZED UNDER A STATE LAW WHICH SPECIFICALLY AUTHORIZES
SUCH CORPORATION TO INSURE THE DEPOSITS OR SHARE ACCOUNTS OF MEMBER
ASSOCIATIONS; (IX) LOANS SECURED BY AN INTEREST IN REAL PROPERTY LOCATED
WITHIN ANY URBAN RENEWAL AREA TO BE DEVELOPED FOR PREDOMINANTLY RESIDEN-
TIAL USE UNDER AN URBAN RENEWAL PLAN APPROVED BY THE SECRETARY OF HOUS-
ING AND URBAN DEVELOPMENT UNDER PART A OR PART B OF TITLE I OF THE HOUS-
ING ACT OF 1949, AS AMENDED, OR LOCATED WITHIN ANY AREA COVERED BY A
PROGRAM ELIGIBLE FOR ASSISTANCE UNDER SECTION 103 OF THE DEMONSTRATION
CITIES AND METROPOLITAN DEVELOPMENT ACT OF 1966, AS AMENDED, AND LOANS
MADE FOR THE IMPROVEMENT OF ANY SUCH REAL PROPERTY; (X) LOANS SECURED BY
AN INTEREST IN EDUCATIONAL, HEALTH, OR WELFARE INSTITUTIONS OR FACILI-
TIES, INCLUDING STRUCTURES DESIGNED OR USED PRIMARILY FOR RESIDENTIAL
PURPOSES FOR STUDENTS, RESIDENTS, AND PERSONS UNDER CARE, EMPLOYEES, OR
MEMBERS OF THE STAFF OF SUCH INSTITUTIONS OR FACILITIES; (XI) LOANS MADE
FOR THE PAYMENT OF EXPENSES OF COLLEGE OR UNIVERSITY EDUCATION OR VOCA-
TIONAL TRAINING; (XII) PROPERTY USED BY THE TAXPAYER IN THE CONDUCT OF
BUSINESS WHICH CONSISTS PRINCIPALLY OF ACQUIRING THE SAVINGS OF THE
PUBLIC AND INVESTING IN LOANS; (XIII) LOANS FOR WHICH THE TAXPAYER IS
THE CREDITOR AND WHICH ARE WHOLLY SECURED BY LOANS DESCRIBED IN CLAUSE
(IV) OF THIS SUBPARAGRAPH, BUT EXCLUDING LOANS FOR WHICH THE TAXPAYER IS
THE CREDITOR TO ANY BANKING CORPORATION DESCRIBED IN PARAGRAPHS ONE
THROUGH SEVEN OF SUBSECTION (A) OF SECTION FOURTEEN HUNDRED FIFTY-TWO OF
THIS ARTICLE OR A REAL ESTATE INVESTMENT TRUST, AS SUCH TERM IS DEFINED
IN SECTION 856 OF THE INTERNAL REVENUE CODE, AND EXCLUDING LOANS WHICH
ARE TREATED BY THE TAXPAYER AS SUBSIDIARY CAPITAL FOR PURPOSES OF THE
DEDUCTIONS PROVIDED BY PARAGRAPH ELEVEN OF SUBSECTION (E) OF THIS
SECTION; (XIV) SMALL BUSINESS LOANS OR SMALL FARM LOANS LOCATED IN LOW-
INCOME OR MODERATE-INCOME CENSUS TRACTS OR BLOCK NUMBERING AREAS DELINE-
ATED BY THE UNITED STATES BUREAU OF THE CENSUS IN THE MOST RECENT DECEN-
NIAL CENSUS; AND (XV) COMMUNITY DEVELOPMENT LOANS OR COMMUNITY
DEVELOPMENT INVESTMENTS. FOR PURPOSES OF CLAUSE (XV) OF THIS SUBPARA-
GRAPH, A "COMMUNITY DEVELOPMENT LOAN" IS A LOAN THAT (I) HAS AS ITS
PRIMARY PURPOSE COMMUNITY DEVELOPMENT, (II) HAS NOT BEEN REPORTED OR
COLLECTED BY THE TAXPAYER FOR CONSIDERATION IN THE TAXPAYER'S COMMUNITY
REINVESTMENT ACT EVALUATION PURSUANT TO THE FEDERAL COMMUNITY REINVEST-
MENT ACT OF 1977, AS AMENDED, OR SECTION TWENTY-EIGHT-B OF THE BANKING
LAW AS A MORTGAGE LOAN DESCRIBED IN CLAUSE (IV) OF THIS SUBPARAGRAPH OR
A SMALL BUSINESS LOAN, SMALL FARM LOAN, OR CONSUMER LOAN, (III) BENEFITS
THE TAXPAYER'S ASSESSMENT AREA OR AREAS FOR PURPOSES OF THE FEDERAL
COMMUNITY REINVESTMENT ACT OF 1977, AS AMENDED OR SECTION TWENTY-EIGHT-B
OF THE BANKING LAW OR A BROADER STATEWIDE OR REGIONAL AREA THAT INCLUDES
THE TAXPAYER'S ASSESSMENT AREA, AND (IV) IS IDENTIFIED IN THE TAXPAYER'S
BOOKS AND RECORDS AS A COMMUNITY DEVELOPMENT LOAN FOR PURPOSES OF ITS
COMMUNITY REINVESTMENT ACT EVALUATION PURSUANT TO THE FEDERAL COMMUNITY
REINVESTMENT ACT OF 1977, AS AMENDED OR SECTION TWENTY-EIGHT-B OF THE
BANKING LAW. FOR PURPOSES OF CLAUSE (XV) OF THIS SUBPARAGRAPH, A "COMMU-
NITY DEVELOPMENT INVESTMENT" IS AN INVESTMENT IN A SECURITY WHICH HAS AS
ITS PRIMARY PURPOSE COMMUNITY DEVELOPMENT AND WHICH IS IDENTIFIED IN THE
TAXPAYER'S BOOKS AND RECORDS AS A QUALIFIED INVESTMENT FOR PURPOSES OF
ITS COMMUNITY REINVESTMENT ACT EVALUATION PURSUANT TO THE FEDERAL COMMU-
NITY REINVESTMENT ACT OF 1977, AS AMENDED OR SECTION TWENTY-EIGHT-B OF
THE BANKING LAW. FOR PURPOSES OF THE TWO PRECEDING SENTENCES, "COMMUNITY
DEVELOPMENT" MEANS (I) AFFORDABLE HOUSING (INCLUDING MULTIFAMILY RENTAL
S. 3456 26
HOUSING FOR LOW-INCOME OR MODERATE-INCOME INDIVIDUALS); (II) COMMUNITY
SERVICES TARGETED TO LOW-INCOME OR MODERATE-INCOME INDIVIDUALS; (III)
ACTIVITIES THAT PROMOTE ECONOMIC DEVELOPMENT BY FINANCING BUSINESSES OR
FARMS THAT MEET THE SIZE ELIGIBILITY STANDARDS OF THE SMALL BUSINESS
ADMINISTRATION'S DEVELOPMENT COMPANY OR SMALL BUSINESS INVESTMENT COMPA-
NY PROGRAMS OR HAVE GROSS ANNUAL REVENUES OF ONE MILLION DOLLARS OR
LESS; (IV) ACTIVITIES THAT REVITALIZE OR STABILIZE LOW-INCOME OR MODER-
ATE-INCOME CENSUS TRACTS OR BLOCK NUMBERING AREAS DELINEATED BY THE
UNITED STATES BUREAU OF THE CENSUS IN THE MOST RECENT DECENNIAL CENSUS;
OR (V) ACTIVITIES THAT SEEK TO PREVENT DEFAULTS AND/OR FORECLOSURES IN
LOANS INCLUDED IN ITEMS (I) AND (III) OF THIS SENTENCE.
(C) AT THE ELECTION OF THE TAXPAYER, THE PERCENTAGE SPECIFIED IN
SUBPARAGRAPH (B) OF THIS PARAGRAPH SHALL BE APPLIED ON THE BASIS OF THE
AVERAGE ASSETS OUTSTANDING DURING THE TAXABLE YEAR, IN LIEU OF THE CLOSE
OF THE TAXABLE YEAR. FOR PURPOSES OF CLAUSE (IV) OF SUBPARAGRAPH (B) OF
THIS PARAGRAPH, IF A MULTIFAMILY STRUCTURE SECURING A LOAN IS USED IN
PART FOR NONRESIDENTIAL USE PURPOSES, THE ENTIRE LOAN IS DEEMED A RESI-
DENTIAL REAL PROPERTY LOAN IF THE PLANNED RESIDENTIAL USE EXCEEDS EIGHTY
PERCENT OF THE PROPERTY'S PLANNED USE (DETERMINED AS OF THE TIME THE
LOAN IS MADE). ALSO, FOR PURPOSES OF CLAUSE (IV) OF SUBPARAGRAPH (B) OF
THIS PARAGRAPH, LOANS MADE TO FINANCE THE ACQUISITION OR DEVELOPMENT OF
LAND SHALL BE DEEMED TO BE LOANS SECURED BY AN INTEREST IN RESIDENTIAL
REAL PROPERTY IF THERE IS A REASONABLE ASSURANCE THAT THE PROPERTY WILL
BECOME RESIDENTIAL REAL PROPERTY WITHIN A PERIOD OF THREE YEARS FROM THE
DATE OF ACQUISITION OF SUCH LAND; BUT THIS SENTENCE SHALL NOT APPLY FOR
ANY TAXABLE YEAR UNLESS, WITHIN SUCH THREE YEAR PERIOD, SUCH LAND
BECOMES RESIDENTIAL REAL PROPERTY. FOR PURPOSES OF DETERMINING WHETHER
ANY INTEREST IN A REMIC QUALIFIES UNDER CLAUSE (VI) OF SUBPARAGRAPH (B)
OF THIS PARAGRAPH, ANY REGULAR INTEREST IN ANOTHER REMIC HELD BY SUCH
REMIC SHALL BE TREATED AS A LOAN DESCRIBED IN A PRECEDING CLAUSE UNDER
PRINCIPLES SIMILAR TO THE PRINCIPLE OF SUCH CLAUSE (VI); EXCEPT THAT IF
SUCH REMICS ARE PART OF A TIERED STRUCTURE, THEY SHALL BE TREATED AS ONE
REMIC FOR PURPOSES OF SUCH CLAUSE (VI).
(2) FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND
TEN, A THRIFT INSTITUTION MUST EXCLUDE FROM THE COMPUTATION OF ITS
ENTIRE NET INCOME ANY AMOUNT ALLOWED AS A DEDUCTION FOR FEDERAL INCOME
TAX PURPOSES PURSUANT TO SECTIONS 166, 585 OR 593 OF THE INTERNAL REVEN-
UE CODE.
(3) FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND
TEN, A THRIFT INSTITUTION SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING
ENTIRE NET INCOME THE AMOUNT OF A REASONABLE ADDITION TO ITS RESERVE FOR
BAD DEBTS. THIS AMOUNT SHALL BE EQUAL TO THE SUM OF
(A) THE AMOUNT DETERMINED TO BE A REASONABLE ADDITION TO THE RESERVE
FOR LOSSES ON NONQUALIFYING LOANS, COMPUTED IN THE SAME MANNER AS IS
PROVIDED WITH RESPECT TO ADDITIONS TO THE RESERVES FOR LOSSES ON LOANS
OF BANKS UNDER PARAGRAPH ONE OF SUBSECTION (I) OF THIS SECTION, PLUS
(B) THE AMOUNT DETERMINED BY THE TAXPAYER TO BE A REASONABLE ADDITION
TO THE RESERVE FOR LOSSES ON QUALIFYING REAL PROPERTY LOANS, BUT SUCH
AMOUNT SHALL NOT EXCEED THE AMOUNT DETERMINED UNDER PARAGRAPH FOUR OR
FIVE OF THIS SUBSECTION, WHICHEVER IS THE LARGER, BUT THE AMOUNT DETER-
MINED UNDER THIS SUBPARAGRAPH SHALL IN NO CASE BE GREATER THAN THE LARG-
ER OF
(I) THE AMOUNT DETERMINED UNDER SUCH PARAGRAPH FIVE, OR
(II) THE AMOUNT WHICH, WHEN ADDED TO THE AMOUNT DETERMINED UNDER
SUBPARAGRAPH (A) OF THIS PARAGRAPH, EQUALS THE AMOUNT BY WHICH TWELVE
PERCENT OF THE TOTAL DEPOSITS OR WITHDRAWABLE ACCOUNTS OF DEPOSITORS OF
S. 3456 27
THE TAXPAYER AT THE CLOSE OF SUCH YEAR EXCEEDS THE SUM OF ITS SURPLUS,
UNDIVIDED PROFITS AND RESERVES AT THE BEGINNING OF SUCH YEAR (TAKING
INTO ACCOUNT ANY PORTION THEREOF ATTRIBUTABLE TO THE PERIOD BEFORE THE
FIRST TAXABLE YEAR BEGINNING AFTER DECEMBER THIRTY-FIRST, NINETEEN
HUNDRED FIFTY-ONE).
THE TAXPAYER MUST INCLUDE IN ITS TAX RETURN FOR EACH YEAR A COMPUTA-
TION OF THE AMOUNT OF THE ADDITION TO THE BAD DEBT RESERVE DETERMINED
UNDER THIS SUBSECTION. THE USE OF A PARTICULAR METHOD IN THE RETURN FOR
A TAXABLE YEAR IS NOT A BINDING ELECTION BY THE TAXPAYER.
(4) (A) SUBJECT TO SUBPARAGRAPHS (B) AND (C) OF THIS PARAGRAPH, THE
AMOUNT DETERMINED UNDER THIS PARAGRAPH FOR THE TAXABLE YEAR SHALL BE AN
AMOUNT EQUAL TO THIRTY-TWO PERCENT OF THE ENTIRE NET INCOME FOR SUCH
YEAR.
(B) THE AMOUNT DETERMINED UNDER SUBPARAGRAPH (A) OF THIS PARAGRAPH
SHALL BE REDUCED (BUT NOT BELOW 0) BY THE AMOUNT DETERMINED UNDER
SUBPARAGRAPH (A) OF PARAGRAPH THREE OF THIS SUBSECTION.
(C) THE AMOUNT DETERMINED UNDER THIS PARAGRAPH SHALL NOT EXCEED THE
AMOUNT NECESSARY TO INCREASE THE BALANCE AT THE CLOSE OF THE TAXABLE
YEAR OF THE RESERVE FOR LOSSES ON QUALIFYING REAL PROPERTY LOANS TO SIX
PERCENT OF SUCH LOANS OUTSTANDING AT SUCH TIME.
(D) FOR PURPOSES OF THIS PARAGRAPH, ENTIRE NET INCOME SHALL BE
COMPUTED
(I) BY EXCLUDING FROM INCOME ANY AMOUNT INCLUDED THEREIN BY REASON OF
SUBPARAGRAPH (B) OF PARAGRAPH EIGHT OF THIS SUBSECTION,
(II) WITHOUT REGARD TO ANY DEDUCTION ALLOWABLE FOR ANY ADDITION TO THE
RESERVE FOR BAD DEBTS, AND
(III) BY EXCLUDING FROM INCOME AN AMOUNT EQUAL TO THE NET GAIN FOR THE
TAXABLE YEAR ARISING FROM THE SALE OR EXCHANGE OF STOCK OF A CORPORATION
OR OF OBLIGATIONS THE INTEREST ON WHICH IS EXCLUDABLE FROM GROSS INCOME
UNDER SECTION 103 OF THE INTERNAL REVENUE CODE.
(IV) WHENEVER A THRIFT INSTITUTION IS PROPERLY INCLUDABLE IN A
COMBINED RETURN, ENTIRE NET INCOME, FOR PURPOSES OF THIS PARAGRAPH,
SHALL NOT EXCEED THE LESSER OF THE THRIFT INSTITUTION'S SEPARATELY
COMPUTED ENTIRE NET INCOME AS ADJUSTED PURSUANT TO CLAUSES (I) THROUGH
(III) OF THIS SUBPARAGRAPH OR THE COMBINED GROUP'S ENTIRE NET INCOME AS
ADJUSTED PURSUANT TO CLAUSES (I) THROUGH (III) OF THIS SUBPARAGRAPH.
(5) THE AMOUNT DETERMINED UNDER THIS PARAGRAPH FOR THE TAXABLE YEAR
SHALL BE COMPUTED IN THE SAME MANNER AS IS PROVIDED UNDER PARAGRAPH ONE
OF SUBSECTION (I) OF THIS SECTION WITH RESPECT TO ADDITIONS TO RESERVES
FOR LOSSES ON LOANS OF BANKS. PROVIDED, HOWEVER, THAT FOR ANY TAXABLE
YEAR BEGINNING AFTER NINETEEN HUNDRED NINETY-FIVE, FOR PURPOSES OF SUCH
COMPUTATION, THE BASE YEAR SHALL BE THE LATER OF (A) THE LAST TAXABLE
YEAR BEGINNING IN NINETEEN HUNDRED NINETY-FIVE OR (B) THE LAST TAXABLE
YEAR BEFORE THE CURRENT YEAR IN WHICH THE AMOUNT DETERMINED UNDER THE
PROVISIONS OF SUBPARAGRAPH (B) OF PARAGRAPH THREE OF THIS SUBSECTION
EXCEEDED THE AMOUNT ALLOWABLE UNDER THIS SUBPARAGRAPH.
(6) (A) (I) EACH TAXPAYER DESCRIBED IN PARAGRAPH ONE OF THIS
SUBSECTION SHALL ESTABLISH AND MAINTAIN A NEW YORK RESERVE FOR LOSSES ON
QUALIFYING REAL PROPERTY LOANS, A NEW YORK RESERVE FOR LOSSES ON
NONQUALIFYING LOANS AND A SUPPLEMENTAL RESERVE FOR LOSSES ON LOANS. SUCH
RESERVES SHALL BE MAINTAINED FOR ALL SUBSEQUENT TAXABLE YEARS THAT THIS
SUBSECTION APPLIES TO THE TAXPAYER. (II) FOR PURPOSES OF THIS
SUBSECTION, SUCH RESERVES SHALL BE TREATED AS RESERVES FOR BAD DEBTS,
BUT NO DEDUCTION SHALL BE ALLOWED FOR ANY ADDITION TO THE SUPPLEMENTAL
RESERVE FOR LOSSES ON LOANS. (III) EXCEPT AS NOTED BELOW, THE BALANCES
OF EACH SUCH RESERVE AT THE BEGINNING OF THE FIRST DAY OF THE FIRST
S. 3456 28
TAXABLE YEAR BEGINNING AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED
NINETY-FIVE SHALL BE THE SAME AS THE BALANCES MAINTAINED FOR FEDERAL
INCOME TAX PURPOSES IN ACCORDANCE WITH SECTION 593(C)(1) OF THE INTERNAL
REVENUE CODE AS IN EXISTENCE ON DECEMBER THIRTY-FIRST, NINETEEN HUNDRED
NINETY-FIVE FOR THE LAST DAY OF THE LAST TAX YEAR BEGINNING BEFORE JANU-
ARY FIRST, NINETEEN HUNDRED NINETY-SIX. A TAXPAYER WHICH MAINTAINED A
NEW YORK RESERVE FOR LOAN LOSSES ON QUALIFYING REAL PROPERTY LOANS IN
THE LAST TAX YEAR BEGINNING BEFORE JANUARY FIRST, NINETEEN HUNDRED NINE-
TY-SIX SHALL HAVE A CONTINUATION OF SUCH NEW YORK RESERVE BALANCE IN
LIEU OF THE AMOUNT DETERMINED UNDER THE PRECEDING SENTENCE. (IV)
NOTWITHSTANDING CLAUSE (II) OF THIS SUBPARAGRAPH, ANY AMOUNT ALLOCATED
TO THE RESERVE FOR LOSSES ON QUALIFYING REAL PROPERTY LOANS PURSUANT TO
SECTION 593 (C) (5) OF THE INTERNAL REVENUE CODE AS IN EFFECT IMMEDIATE-
LY PRIOR TO THE ENACTMENT OF THE TAX REFORM ACT OF 1976 SHALL NOT BE
TREATED AS A RESERVE FOR BAD DEBTS FOR ANY PURPOSE OTHER THAN DETERMIN-
ING THE AMOUNT REFERRED TO IN SUBPARAGRAPH (B) OF PARAGRAPH THREE OF
THIS SUBSECTION, AND FOR SUCH PURPOSE SUCH AMOUNT SHALL BE TREATED AS
REMAINING IN SUCH RESERVE.
(B) ANY DEBT BECOMING WORTHLESS OR PARTIALLY WORTHLESS IN RESPECT OF A
QUALIFYING REAL PROPERTY LOAN SHALL BE CHARGED TO THE RESERVE FOR LOSSES
ON SUCH LOANS AND ANY DEBT BECOMING WORTHLESS OR PARTIALLY WORTHLESS IN
RESPECT OF A NONQUALIFYING LOAN SHALL BE CHARGED TO THE RESERVE FOR
LOSSES ON NONQUALIFYING LOANS, EXCEPT THAT ANY SUCH DEBT MAY, AT THE
ELECTION OF THE TAXPAYER, BE CHARGED IN WHOLE OR IN PART TO THE SUPPLE-
MENTAL RESERVE FOR LOSSES ON LOANS.
(C) THE NEW YORK RESERVE FOR LOSSES ON QUALIFYING REAL PROPERTY LOANS
SHALL BE INCREASED BY THE AMOUNT DETERMINED UNDER SUBPARAGRAPH (B) OF
PARAGRAPH THREE OF THIS SUBSECTION AND THE NEW YORK RESERVE FOR LOSSES
ON NONQUALIFYING LOANS SHALL BE INCREASED BY THE AMOUNT DETERMINED UNDER
SUBPARAGRAPH (A) OF PARAGRAPH THREE OF THIS SUBSECTION.
(7) (A) FOR PURPOSES OF THIS SUBSECTION, THE TERM "QUALIFYING REAL
PROPERTY LOAN" SHALL MEAN ANY LOAN SECURED BY AN INTEREST IN IMPROVED
REAL PROPERTY OR SECURED BY AN INTEREST IN REAL PROPERTY WHICH IS TO BE
IMPROVED OUT OF THE PROCEEDS OF THE LOAN. SUCH TERM SHALL INCLUDE ANY
MORTGAGE-BACKED SECURITY WHICH REPRESENTS OWNERSHIP OF A FRACTIONAL
UNDIVIDED INTEREST IN A TRUST, THE ASSETS OF WHICH CONSIST PRIMARILY OF
MORTGAGE LOANS, PROVIDED THAT THE REAL PROPERTY WHICH SERVES AS SECURITY
FOR THE LOANS IS (OR FROM THE PROCEEDS OF THE LOAN, WILL BECOME) THE
TYPE OF PROPERTY DESCRIBED IN CLAUSES (I) THROUGH (V) OF SUBPARAGRAPH
(B) OF PARAGRAPH ONE OF THIS SUBDIVISION. HOWEVER, SUCH TERM SHALL NOT
INCLUDE: (I) ANY LOAN EVIDENCED BY A SECURITY (AS DEFINED IN SECTION
165(G) (2) (C) OF THE INTERNAL REVENUE CODE); (II) ANY LOAN, WHETHER OR
NOT EVIDENCED BY A SECURITY (AS DEFINED IN SUCH SECTION 165(G) (2) (C)),
THE PRIMARY OBLIGOR OF WHICH IS (I) A GOVERNMENT OR POLITICAL SUBDIVI-
SION OR INSTRUMENTALITY THEREOF, (II) A BANKING CORPORATION, OR (III)
ANY CORPORATION SIXTY-FIVE PERCENT OR MORE OF WHOSE VOTING STOCK IS
OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE TAXPAYER OR BY A
BANKING CORPORATION OR BANK HOLDING COMPANY THAT OWNS OR CONTROLS,
DIRECTLY OR INDIRECTLY, SIXTY-FIVE PERCENT OR MORE OF THE VOTING STOCK
OF THE TAXPAYER; (III) ANY LOAN, TO THE EXTENT SECURED BY A DEPOSIT IN
OR SHARE OF THE TAXPAYER; OR (IV) ANY LOAN WHICH, WITHIN A SIXTY-DAY
PERIOD BEGINNING IN ONE TAXABLE YEAR OF THE CREDITOR AND ENDING IN ITS
NEXT TAXABLE YEAR, IS MADE OR ACQUIRED AND THEN REPAID OR DISPOSED OF,
UNLESS THE TRANSACTIONS BY WHICH SUCH LOAN WAS MADE OR ACQUIRED AND THEN
REPAID OR DISPOSED OF ARE ESTABLISHED TO BE FOR BONA FIDE BUSINESS
PURPOSES.
S. 3456 29
(B) FOR PURPOSES OF THIS SUBSECTION, THE TERM "NONQUALIFYING LOAN"
SHALL MEAN ANY LOAN WHICH IS NOT A QUALIFYING REAL PROPERTY LOAN.
(C) FOR PURPOSES OF THIS SUBSECTION, THE TERM "LOAN" SHALL MEAN DEBT,
AS THE TERM "DEBT" IS USED IN SECTION 166 OF THE INTERNAL REVENUE CODE.
(D) A REGULAR OR RESIDUAL INTEREST IN A REMIC, AS SUCH TERM IS DEFINED
IN SECTION 860D OF THE INTERNAL REVENUE CODE, SHALL BE TREATED AS A
QUALIFYING REAL PROPERTY LOAN, EXCEPT THAT, IF LESS THAN NINETY-FIVE
PERCENT OF THE ASSETS OF SUCH REMIC ARE QUALIFYING REAL PROPERTY LOANS
(DETERMINED AS IF THE TAXPAYER HELD THE ASSETS OF THE REMIC), SUCH
INTEREST SHALL BE SO TREATED ONLY IN THE PROPORTION WHICH THE ASSETS OF
SUCH REMIC CONSIST OF SUCH LOANS. FOR PURPOSES OF DETERMINING WHETHER
ANY INTEREST IN A REMIC QUALIFIES UNDER THE PRECEDING SENTENCE, ANY
INTEREST IN ANOTHER REMIC HELD BY SUCH REMIC SHALL BE TREATED AS A QUAL-
IFYING REAL PROPERTY LOAN UNDER PRINCIPLES SIMILAR TO THE PRINCIPLES OF
THE PRECEDING SENTENCE, EXCEPT THAT IF SUCH REMICS ARE PART OF A TIERED
STRUCTURE, THEY SHALL BE TREATED AS ONE REMIC FOR PURPOSES OF THIS PARA-
GRAPH.
(8)(A) ANY DISTRIBUTION OF PROPERTY (AS DEFINED IN SECTION 317(A) OF
THE INTERNAL REVENUE CODE) BY A THRIFT INSTITUTION TO A SHAREHOLDER WITH
RESPECT TO ITS STOCK, IF SUCH DISTRIBUTION IS NOT ALLOWABLE AS A
DEDUCTION UNDER SECTION 591 OF SUCH CODE, SHALL BE TREATED AS MADE
(I) FIRST OUT OF ITS NEW YORK EARNINGS AND PROFITS ACCUMULATED IN
TAXABLE YEARS BEGINNING AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED
FIFTY-ONE, TO THE EXTENT THEREOF,
(II) THEN OUT OF THE NEW YORK RESERVE FOR LOSSES ON QUALIFYING REAL
PROPERTY LOANS, TO THE EXTENT ADDITIONS TO SUCH RESERVE EXCEED THE ADDI-
TIONS WHICH WOULD HAVE BEEN ALLOWED UNDER PARAGRAPH FIVE OF THIS
SUBSECTION,
(III) THEN OUT OF THE SUPPLEMENTAL RESERVE FOR LOSSES ON LOANS, TO THE
EXTENT THEREOF,
(IV) THEN OUT OF SUCH OTHER ACCOUNTS AS MAY BE PROPER.
THIS SUBPARAGRAPH SHALL APPLY IN THE CASE OF ANY DISTRIBUTION IN REDEMP-
TION OF STOCK OR IN PARTIAL OR COMPLETE LIQUIDATION OF A THRIFT INSTITU-
TION, EXCEPT THAT ANY SUCH DISTRIBUTION SHALL BE TREATED AS MADE FIRST
OUT OF THE AMOUNT REFERRED TO IN CLAUSE (II) OF THIS SUBPARAGRAPH,
SECOND OUT OF THE AMOUNT REFERRED TO IN CLAUSE (III) OF THIS SUBPARA-
GRAPH, THIRD OUT OF THE AMOUNT REFERRED TO IN CLAUSE (I) OF THIS SUBPAR-
AGRAPH AND THEN OUT OF SUCH OTHER ACCOUNTS AS MAY BE PROPER. THIS
SUBPARAGRAPH SHALL NOT APPLY TO ANY TRANSACTION TO WHICH SECTION 381 OF
SUCH CODE (RELATING TO CARRYOVERS AND CERTAIN CORPORATE ACQUISITIONS)
APPLIES, OR TO ANY DISTRIBUTION TO THE FEDERAL SAVINGS AND LOAN INSUR-
ANCE CORPORATION OR THE FEDERAL DEPOSIT INSURANCE CORPORATION IN REDEMP-
TION OF AN INTEREST IN AN ASSOCIATION OR INSTITUTION, IF SUCH INTEREST
WAS ORIGINALLY RECEIVED BY THE FEDERAL SAVINGS AND LOAN INSURANCE CORPO-
RATION OR THE FEDERAL DEPOSIT INSURANCE CORPORATION IN EXCHANGE FOR
FINANCIAL ASSISTANCE PURSUANT TO SECTION 406(F) OF THE FEDERAL NATIONAL
HOUSING ACT OR PURSUANT TO SUBSECTION (C) OF SECTION THIRTEEN OF THE
FEDERAL DEPOSIT INSURANCE ACT.
(B) IF ANY DISTRIBUTION IS TREATED UNDER SUBPARAGRAPH (A) OF THIS
PARAGRAPH AS HAVING BEEN MADE OUT OF THE RESERVES DESCRIBED IN CLAUSES
(II) AND (III) OF SUCH SUBPARAGRAPH, THE AMOUNT CHARGED AGAINST SUCH
RESERVE SHALL BE THE AMOUNT WHICH, WHEN REDUCED BY THE AMOUNT OF TAX
IMPOSED UNDER THE INTERNAL REVENUE CODE AND ATTRIBUTABLE TO THE INCLU-
SION OF SUCH AMOUNT IN GROSS INCOME, IS EQUAL TO THE AMOUNT OF SUCH
DISTRIBUTION; AND THE AMOUNT SO CHARGED AGAINST SUCH RESERVE SHALL BE
INCLUDED IN THE ENTIRE NET INCOME OF THE TAXPAYER.
S. 3456 30
(C) (I) FOR PURPOSES OF CLAUSE (II) OF SUBPARAGRAPH (A) OF THIS PARA-
GRAPH, ADDITIONS TO THE NEW YORK RESERVE FOR LOSSES ON QUALIFYING REAL
PROPERTY LOANS FOR THE TAXABLE YEAR IN WHICH THE DISTRIBUTION OCCURS
SHALL BE TAKEN INTO ACCOUNT.
(II) FOR PURPOSES OF COMPUTING UNDER THIS SUBSECTION THE AMOUNT OF A
REASONABLE ADDITION TO THE NEW YORK RESERVE FOR LOSSES ON QUALIFYING
REAL PROPERTY LOANS FOR ANY TAXABLE YEAR, THE AMOUNT CHARGED DURING ANY
YEAR TO SUCH RESERVE PURSUANT TO THE PROVISIONS OF SUBPARAGRAPH (B) OF
THIS PARAGRAPH SHALL NOT BE TAKEN INTO ACCOUNT.
(9) A TAXPAYER WHICH MAINTAINS A NEW YORK RESERVE FOR LOSSES ON QUALI-
FYING REAL PROPERTY LOANS AND WHICH CEASES TO MEET THE DEFINITION OF A
THRIFT INSTITUTION AS DEFINED IN PARAGRAPH ONE OF THIS SUBSECTION, MUST
INCLUDE IN ITS ENTIRE NET INCOME FOR THE LAST TAXABLE YEAR SUCH PARA-
GRAPH APPLIED THE EXCESS OF ITS NEW YORK RESERVE FOR LOSSES ON QUALIFY-
ING REAL PROPERTY LOANS OVER THE GREATER OF (A) ITS RESERVE FOR LOSSES
ON QUALIFYING REAL PROPERTY LOANS AS OF THE LAST DAY OF THE LAST TAXABLE
YEAR SUCH RESERVE IS MAINTAINED FOR FEDERAL INCOME TAX PURPOSES OR (B)
THE BALANCE OF THE NEW YORK RESERVE FOR LOSSES ON QUALIFYING REAL PROP-
ERTY LOANS WHICH WOULD BE ALLOWABLE TO THE TAXPAYER FOR THE LAST TAXABLE
YEAR SUCH TAXPAYER MET SUCH DEFINITION OF A THRIFT INSTITUTION IF THE
TAXPAYER HAD COMPUTED ITS RESERVE BALANCE PURSUANT TO THE METHOD
DESCRIBED IN SUBPARAGRAPH (A) OF PARAGRAPH ONE OF SUBSECTION (I) OF THIS
SECTION.
(I) (1) FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND
TEN, A TAXPAYER SUBJECT TO THE PROVISIONS OF SECTION 585(C) OF THE
INTERNAL REVENUE CODE AND NOT SUBJECT TO SUBSECTION (H) OF THIS SECTION
MAY, IN COMPUTING ENTIRE NET INCOME, DEDUCT AN AMOUNT EQUAL TO OR LESS
THAN THE AMOUNT DETERMINED PURSUANT TO SUBPARAGRAPH (A) OF THIS PARA-
GRAPH OR SUBPARAGRAPH (B) OF THIS PARAGRAPH, WHICHEVER IS GREATER.
PROVIDED, HOWEVER, IN NO EVENT SHALL THE DEDUCTION BE LESS THAN THE
AMOUNT DETERMINED PURSUANT TO SUCH SUBPARAGRAPH (A).
(A) THE AMOUNT DETERMINED PURSUANT TO THIS SUBPARAGRAPH SHALL BE THE
AMOUNT NECESSARY TO INCREASE THE BALANCE OF ITS NEW YORK RESERVE FOR
LOSSES ON LOANS (AT THE CLOSE OF THE TAXABLE YEAR) TO THE AMOUNT WHICH
BEARS THE SAME RATIO TO LOANS OUTSTANDING AT THE CLOSE OF THE TAXABLE
YEAR AS (I) THE TOTAL BAD DEBTS SUSTAINED DURING THE TAXABLE YEAR AND
THE FIVE PRECEDING TAXABLE YEARS (OR, WITH THE APPROVAL OF THE COMMIS-
SIONER OF TAXATION AND FINANCE, A SHORTER PERIOD), ADJUSTED FOR RECOV-
ERIES OF BAD DEBTS DURING SUCH PERIOD, BEARS TO (II) THE SUM OF THE
LOANS OUTSTANDING AT THE CLOSE OF SUCH SIX OR FEWER TAXABLE YEARS.
(B) (I) THE AMOUNT DETERMINED PURSUANT TO THIS SUBPARAGRAPH SHALL BE
THE AMOUNT NECESSARY TO INCREASE THE BALANCE OF ITS NEW YORK RESERVE FOR
LOSSES ON LOANS (AT THE CLOSE OF THE TAXABLE YEAR) TO THE LOWER OF --
(I) THE BALANCE OF THE RESERVE AT THE CLOSE OF THE BASE YEAR, OR
(II) IF THE AMOUNT OF LOANS OUTSTANDING AT THE CLOSE OF THE TAXABLE
YEAR IS LESS THAN THE AMOUNT OF LOANS OUTSTANDING AT THE CLOSE OF THE
BASE YEAR, THE AMOUNT WHICH BEARS THE SAME RATIO TO LOANS OUTSTANDING AT
THE CLOSE OF THE TAXABLE YEAR AS THE BALANCE OF THE RESERVE AT THE CLOSE
OF THE BASE YEAR BEARS TO THE AMOUNT OF LOANS OUTSTANDING AT THE CLOSE
OF THE BASE YEAR.
(II) FOR PURPOSES OF THIS PARAGRAPH, THE BASE YEAR SHALL BE (I) FOR
TAXABLE YEARS BEGINNING IN NINETEEN HUNDRED EIGHTY-SEVEN, THE LAST TAXA-
BLE YEAR BEFORE THE MOST RECENT ADOPTION OF THE EXPERIENCE METHOD FOR
FEDERAL INCOME TAX PURPOSES OR FOR PURPOSES OF THIS ARTICLE, WHICHEVER
IS EARLIER, AND (II) FOR TAXABLE YEARS BEGINNING AFTER NINETEEN HUNDRED
S. 3456 31
EIGHTY-SEVEN, THE LAST TAXABLE YEAR BEGINNING BEFORE NINETEEN HUNDRED
EIGHTY-EIGHT.
(2) (A) FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND
TEN, EACH TAXPAYER DESCRIBED IN PARAGRAPH ONE OF THIS SUBSECTION SHALL
ESTABLISH AND MAINTAIN A NEW YORK RESERVE FOR LOSSES ON LOANS. SUCH
RESERVE SHALL BE MAINTAINED FOR ALL SUBSEQUENT TAXABLE YEARS. THE
BALANCE OF THE NEW YORK RESERVE FOR LOSSES ON LOANS AT THE BEGINNING OF
THE FIRST DAY OF THE FIRST TAXABLE YEAR THE TAXPAYER BECOMES SUBJECT TO
THIS SUBSECTION SHALL BE THE SAME AS THE BALANCE AT THE BEGINNING OF
SUCH DAY OF THE RESERVE FOR LOSSES ON LOANS MAINTAINED FOR FEDERAL
INCOME TAX PURPOSES. THE NEW YORK RESERVE FOR LOSSES ON LOANS SHALL BE
REDUCED BY AN AMOUNT EQUAL TO THE DEDUCTION ALLOWED, BUT NOT MORE THAN
THE AMOUNT ALLOWABLE, FOR WORTHLESS DEBTS FOR FEDERAL INCOME TAX
PURPOSES PURSUANT TO SECTION 166 OF THE INTERNAL REVENUE CODE PLUS THE
AMOUNT, IF ANY, CHARGED AGAINST ITS RESERVE FOR LOSSES ON LOANS PURSUANT
TO SECTION 585(C)(4) OF SUCH CODE.
(B) FOR PURPOSES OF SUBPARAGRAPH (A) OF THIS PARAGRAPH, A TAXPAYER
WHICH HAD PREVIOUSLY BEEN SUBJECT TO THE PROVISIONS OF SUBSECTION (H) OF
THIS SECTION SHALL ESTABLISH A NEW YORK RESERVE FOR LOSSES ON LOANS
EQUAL TO THE SUM OF (I) THE GREATER OF (I) THE BALANCE OF ITS FEDERAL
RESERVE FOR LOSSES ON QUALIFYING REAL PROPERTY LOANS AS OF THE FIRST DAY
OF THE FIRST TAXABLE YEAR THE TAXPAYER BECOMES SUBJECT TO THE PROVISIONS
OF THIS SUBSECTION OR (II) THE GREATER OF THE AMOUNTS DETERMINED UNDER
SUBPARAGRAPHS (A) AND (B) OF PARAGRAPH NINE OF SUBSECTION (H) OF THIS
SECTION IN THE YEAR SUCH PARAGRAPH APPLIED TO THE TAXPAYER, (II) THE
GREATER OF (I) THE BALANCE IN ITS FEDERAL RESERVE FOR LOSSES ON NONQUAL-
IFYING LOANS AS OF THE FIRST DAY OF THE FIRST TAXABLE YEAR THE TAXPAYER
BECOMES SUBJECT TO THIS SUBSECTION OR (II) THE BALANCE IN ITS NEW YORK
RESERVE FOR LOSSES ON NONQUALIFYING LOANS AS OF THE LAST DATE THE
TAXPAYER WAS SUBJECT TO THE PROVISIONS OF SUBSECTION (H) OF THIS SECTION
AND (III) THE BALANCE IN ITS SUPPLEMENTAL RESERVE FOR LOSSES ON LOANS AS
OF THE LAST DATE THE TAXPAYER WAS SUBJECT TO THE PROVISIONS OF
SUBSECTION (H) OF THIS SECTION.
(3) THE DETERMINATION AND TREATMENT OF THE NEW YORK RESERVE BALANCE,
INCLUDING ANY ADDITIONS THERETO, SUBTRACTIONS THEREFROM, OR RECAPTURE
THEREOF, FOR
(A) ANY BANKING CORPORATION WHICH WAS SUBJECT TO TAX FOR FEDERAL
INCOME TAX PURPOSES BUT NOT SUBJECT TO TAX UNDER THIS ARTICLE FOR PRIOR
TAXABLE YEARS,
(B) ANY TAXPAYER WHICH CEASES TO BE SUBJECT TO TAX UNDER THIS ARTICLE,
OR
(C) ANY OTHER UNUSUAL CIRCUMSTANCES
SHALL BE DETERMINED BY THE COMMISSIONER OF TAXATION AND FINANCE.
PROVIDED, HOWEVER, ANY BANKING CORPORATION WHICH WAS SUBJECT TO TAX FOR
FEDERAL INCOME TAX PURPOSES BUT NOT SUBJECT TO TAX UNDER THIS ARTICLE
FOR PRIOR TAXABLE YEARS SHALL HAVE AS ITS OPENING NEW YORK RESERVE FOR
LOSSES ON LOANS THE AMOUNT DETERMINED BY APPLYING THE PROVISIONS OF
SUBPARAGRAPH (A) OF PARAGRAPH ONE OF THIS SUBSECTION TO LOANS OUTSTAND-
ING AT THE CLOSE OF ITS LAST TAXABLE YEAR FOR FEDERAL INCOME TAX
PURPOSES ENDING PRIOR TO THE FIRST TAXABLE YEAR FOR WHICH THE TAXPAYER
IS SUBJECT TO TAX UNDER THIS ARTICLE AND PROVIDED, FURTHER, THAT THE
PROVISIONS OF SUBPARAGRAPH (B) OF PARAGRAPH ONE OF THIS SUBSECTION SHALL
NOT APPLY.
(J) (1) IN THE CASE OF PROPERTY PLACED IN SERVICE PRIOR TO JANUARY
FIRST, NINETEEN HUNDRED SEVENTY-THREE, FOR WHICH THE TAXPAYER PROPERLY
ADOPTED A DIFFERENT METHOD OF COMPUTING DEPRECIATION UNDER SECTION TWO
S. 3456 32
HUNDRED NINETEEN-Z OR SECTION TWO HUNDRED NINETEEN-XX OF THIS CHAPTER
(AS SUCH SECTIONS WERE IN EFFECT ON OR BEFORE DECEMBER THIRTY-FIRST,
NINETEEN HUNDRED SEVENTY-TWO) THAN WAS ADOPTED FOR FEDERAL INCOME TAX
PURPOSES WITH RESPECT TO SUCH PROPERTY, ENTIRE NET INCOME UNDER THIS
ARTICLE SHALL BE COMPUTED WITHOUT REGARD TO THE AMOUNT ALLOWABLE AS A
DEDUCTION FOR DEPRECIATION OF SUCH PROPERTY IN COMPUTING FEDERAL TAXABLE
INCOME FOR THE TAXABLE YEAR BUT, IN LIEU THEREOF, SHALL BE COMPUTED AS
IF SUCH DEDUCTION WERE DETERMINED BY THE METHOD OF DEPRECIATION ADOPTED
WITH RESPECT TO SUCH PROPERTY UNDER SECTIONS TWO HUNDRED NINETEEN-Z OR
TWO HUNDRED NINETEEN-XX OF THIS CHAPTER (AS SUCH SECTIONS WERE IN EFFECT
ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SEVENTY-TWO).
(2) IN COMPUTING ENTIRE NET INCOME, THE AMOUNT ALLOWABLE AS A
DEDUCTION FOR CHARITABLE CONTRIBUTIONS FOR FEDERAL INCOME TAX PURPOSES
SHALL BE DECREASED BY ANY AMOUNT ALLOWED AS A DEDUCTION FOR FEDERAL
INCOME TAX PURPOSES FOR THE TAXABLE YEAR UNDER SECTION ONE HUNDRED
SEVENTY OF THE INTERNAL REVENUE CODE AS A CARRYOVER OF EXCESS CONTRIB-
UTIONS WHICH ARE NOT MADE IN SUCH TAXABLE YEAR AND WHICH WERE DEDUCTIBLE
IN COMPUTING THE TAX DUE UNDER ARTICLE NINE-B OR NINE-C OF THIS CHAPTER
(AS SUCH ARTICLES WERE IN EFFECT ON OR BEFORE DECEMBER THIRTY-FIRST,
NINETEEN HUNDRED SEVENTY-TWO).
(3) THERE SHALL BE EXCLUDED FROM THE COMPUTATION OF ENTIRE NET INCOME
ANY AMOUNT ALLOWED AS A DEDUCTION FOR FEDERAL INCOME TAX PURPOSES FOR
THE TAXABLE YEAR UNDER SECTION TWELVE HUNDRED TWELVE OF THE INTERNAL
REVENUE CODE AS A CAPITAL LOSS CARRYFORWARD TO THE TAXABLE YEAR, WHICH
WAS DEDUCTIBLE AS A LOSS IN COMPUTING THE TAX DUE UNDER ARTICLE NINE-B
OR NINE-C OF THIS CHAPTER (AS SUCH ARTICLES WERE IN EFFECT ON DECEMBER
THIRTY-FIRST, NINETEEN HUNDRED SEVENTY-TWO).
(4) THERE SHALL BE EXCLUDED FROM THE COMPUTATION OF ENTIRE NET INCOME
THE AMOUNT OF ANY INCOME OR GAIN FROM THE SALE OF REAL OR PERSONAL PROP-
ERTY WHICH IS INCLUDIBLE IN DETERMINING FEDERAL TAXABLE INCOME FOR THE
TAXABLE YEAR PURSUANT TO THE INSTALLMENT METHOD UNDER SECTION FOUR
HUNDRED FIFTY-THREE OF THE INTERNAL REVENUE CODE, TO THE EXTENT THAT
SUCH INCOME OR GAIN WAS INCLUDIBLE IN THE COMPUTATION OF THE TAX DUE
UNDER ARTICLE NINE-B OR NINE-C OF THIS CHAPTER (AS SUCH ARTICLES WERE IN
EFFECT ON DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SEVENTY-TWO).
(5) TO THE EXTENT NOT OTHERWISE PROVIDED IN THIS ARTICLE, THERE SHALL
BE EXCLUDED FROM ENTIRE NET INCOME THE AMOUNT NECESSARY TO PREVENT THE
TAXATION UNDER THIS ARTICLE OF ANY OTHER AMOUNT OF INCOME OR GAIN WHICH
WAS PROPERLY INCLUDED IN INCOME OR GAIN AND WAS TAXABLE UNDER ARTICLE
NINE-B OR NINE-C OF THIS CHAPTER (AS SUCH ARTICLES WERE IN EFFECT ON OR
BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SEVENTY-TWO) AND THERE
SHALL BE DISALLOWED AS A DEDUCTION IN COMPUTING ENTIRE NET INCOME ANY
AMOUNT WHICH WAS ALLOWABLE AS A DEDUCTION IN COMPUTING THE TAX DUE UNDER
SUCH ARTICLES (AS THEY WERE IN EFFECT ON OR BEFORE DECEMBER THIRTY-
FIRST, NINETEEN HUNDRED SEVENTY-TWO).
(K) (1) AT THE ELECTION OF THE TAXPAYER, THERE SHALL BE DEDUCTED FROM
THE PORTION OF ITS ENTIRE NET INCOME ALLOCATED WITHIN THE STATE, DEPRE-
CIATION WITH RESPECT TO ANY PROPERTY SUCH AS DESCRIBED IN PARAGRAPH TWO
OF THIS SUBSECTION, 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 DEPRECIATION OR AMORTIZATION OF THE
SAME PROPERTY, AND THE TOTAL OF ALL DEDUCTIONS ALLOWED UNDER ARTICLE
NINE-B OR NINE-C OF THIS CHAPTER (AS SUCH ARTICLES WERE IN EFFECT ON OR
BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SEVENTY-TWO) AND THIS
S. 3456 33
ARTICLE IN ANY TAXABLE YEAR OR YEARS WITH RESPECT TO THE DEPRECIATION OF
ANY SUCH PROPERTY SHALL NOT EXCEED ITS COST OR OTHER BASIS.
(2) SUCH DEDUCTION SHALL BE ALLOWED ONLY WITH RESPECT TO TANGIBLE
PROPERTY WHICH IS DEPRECIABLE PURSUANT TO SECTION ONE HUNDRED SIXTY-SEV-
EN OF THE INTERNAL REVENUE CODE, HAVING A SITUS IN THIS STATE AND USED
IN THE TAXPAYER'S BUSINESS, (I) CONSTRUCTED, RECONSTRUCTED OR ERECTED
AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-THREE, PURSUANT TO A
CONTRACT WHICH WAS, ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED
SIXTY-SEVEN, AND AT ALL TIMES THEREAFTER, BINDING ON THE TAXPAYER OR,
PROPERTY, THE PHYSICAL CONSTRUCTION, RECONSTRUCTION OR ERECTION OF WHICH
BEGAN ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-SEVEN
OR WHICH BEGAN AFTER SUCH DATE PURSUANT TO AN ORDER PLACED ON OR BEFORE
DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-SEVEN, AND THEN ONLY WITH
RESPECT TO THAT PORTION OF THE BASIS THEREOF WHICH IS PROPERLY ATTRIBUT-
ABLE TO SUCH CONSTRUCTION, RECONSTRUCTION OR ERECTION AFTER DECEMBER
THIRTY-FIRST, NINETEEN HUNDRED SIXTY-THREE, OR (II) ACQUIRED AFTER
DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-THREE, PURSUANT TO A
CONTRACT WHICH WAS, ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED
SIXTY-SEVEN, AND AT ALL TIMES THEREAFTER, BINDING ON THE TAXPAYER OR
PURSUANT TO AN ORDER PLACED ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN
HUNDRED SIXTY-SEVEN, 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 THIS STATE AND
COMMENCED AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-THREE, OR
(III) ACQUIRED, CONSTRUCTED, RECONSTRUCTED, OR ERECTED SUBSEQUENT TO
DECEMBER THIRTY-FIRST NINETEEN HUNDRED SIXTY-SEVEN, IF SUCH ACQUISITION,
CONSTRUCTION, RECONSTRUCTION OR ERECTION IS PURSUANT TO A PLAN OF THE
TAXPAYER WHICH WAS IN EXISTENCE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED
SIXTY-SEVEN AND NOT THEREAFTER SUBSTANTIALLY MODIFIED, AND SUCH ACQUISI-
TION, CONSTRUCTION, RECONSTRUCTION OR ERECTION WOULD QUALIFY UNDER THE
RULES IN PARAGRAPHS FOUR, FIVE OR SIX OF SUBSECTION (H) OF SECTION
FORTY-EIGHT OF THE INTERNAL REVENUE CODE PROVIDED ALL REFERENCES IN SUCH
PARAGRAPHS FOUR, FIVE AND SIX TO THE DATES OCTOBER NINE, NINETEEN
HUNDRED SIXTY-SIX, AND OCTOBER TEN, NINETEEN HUNDRED SIXTY-SIX, SHALL BE
READ AS DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-SEVEN. A TAXPAYER
SHALL BE ALLOWED A DEDUCTION UNDER CLAUSES (I), (II) OR (III) OF THIS
PARAGRAPH ONLY IF THE TANGIBLE PROPERTY SHALL BE DELIVERED OR THE
CONSTRUCTION, RECONSTRUCTION OR ERECTION SHALL BE COMPLETED ON OR BEFORE
DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-NINE, EXCEPT IN THE CASE
OF TANGIBLE PROPERTY WHICH IS ACQUIRED, CONSTRUCTED, RECONSTRUCTED OR
ERECTED PURSUANT TO A CONTRACT WHICH WAS, ON OR BEFORE DECEMBER THIRTY-
FIRST, NINETEEN HUNDRED SIXTY-SEVEN, AND AT ALL TIMES THEREAFTER, BIND-
ING ON THE TAXPAYER. PROVIDED, HOWEVER, FOR ANY TAXABLE YEAR BEGINNING
ON OR AFTER JANUARY FIRST, NINETEEN HUNDRED SIXTY-EIGHT, A TAXPAYER
SHALL NOT BE ALLOWED A DEDUCTION UNDER PARAGRAPH ONE OF THIS SUBSECTION
WITH RESPECT TO TANGIBLE PERSONAL PROPERTY LEASED BY IT TO ANY OTHER
PERSON OR CORPORATION. FOR PURPOSES OF THE PRECEDING SENTENCE, ANY
CONTRACT OR AGREEMENT TO LEASE OR RENT OR FOR A LICENSE TO USE SUCH
PROPERTY SHALL BE CONSIDERED A LEASE. WITH RESPECT TO PROPERTY WHICH THE
TAXPAYER USES ITSELF FOR PURPOSES OTHER THAN LEASING FOR PART OF A TAXA-
BLE YEAR AND LEASES FOR A PART OF A TAXABLE YEAR, THE TAXPAYER SHALL BE
ALLOWED A DEDUCTION UNDER PARAGRAPH ONE OF THIS SUBSECTION IN PROPORTION
TO THE PART OF THE YEAR IT USES SUCH PROPERTY.
(3) IF THE DEDUCTION ALLOWABLE FOR ANY TAXABLE YEAR PURSUANT TO THIS
SUBSECTION EXCEEDS THE PORTION OF THE TAXPAYER'S ENTIRE NET INCOME ALLO-
CATED TO THIS STATE FOR SUCH YEAR, THE EXCESS MAY BE CARRIED OVER TO THE
S. 3456 34
FOLLOWING TAXABLE YEAR OR YEARS AND MAY BE DEDUCTED FROM THE PORTION OF
THE TAXPAYER'S ENTIRE NET INCOME ALLOCATED TO THIS STATE FOR SUCH YEAR
OR YEARS.
(4) IN ANY TAXABLE YEAR WHEN PROPERTY IS SOLD OR OTHERWISE DISPOSED
OF, WITH RESPECT TO WHICH A DEDUCTION HAS BEEN ALLOWED PURSUANT TO THIS
SUBSECTION, SUBDIVISION TWELVE OF SECTION TWO HUNDRED NINETEEN-Z OR
SUBDIVISION TEN OF SECTION TWO HUNDRED NINETEEN-XX OF THIS CHAPTER (AS
SUCH SUBDIVISIONS WERE IN EFFECT ON OR BEFORE DECEMBER THIRTY-FIRST,
NINETEEN HUNDRED SEVENTY-TWO), THE GAIN OR LOSS ENTERING INTO THE COMPU-
TATION OF FEDERAL TAXABLE INCOME SHALL BE DISREGARDED IN COMPUTING
ENTIRE NET INCOME, AND THERE SHALL BE ADDED OR SUBTRACTED FROM THE
PORTION OF ENTIRE NET INCOME ALLOCATED WITHIN THE STATE 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 PARA-
GRAPH ONE OF THIS SUBSECTION. PROVIDED HOWEVER, THAT NO LOSS SHALL BE
RECOGNIZED FOR THE PURPOSES OF THIS PARAGRAPH 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.
(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 ARTI-
CLE:
(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
ONE, OR DURING ANY TAXABLE YEAR IN WHICH THE TAXPAYER WAS NOT SUBJECT TO
THE TAX IMPOSED BY THIS ARTICLE,
(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 SUBSECTION (H) OR (I) OF THIS SECTION, WHICHEVER IS APPLICABLE,
OVER THE AMOUNT ALLOWED AS A DEDUCTION PURSUANT TO SECTION 166 OR 585 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
SUBSECTION BE DETERMINED AS IF THE TAXPAYER HAD ELECTED UNDER SUCH
SECTION TO RELINQUISH THE ENTIRE CARRYBACK PERIOD WITH RESPECT TO NET
OPERATING LOSSES.
(L) IN THE CASE OF A SAVINGS AND INSURANCE BANK WHICH CONDUCTS A LIFE
INSURANCE BUSINESS THROUGH A LIFE INSURANCE DEPARTMENT UNDER THE AUTHOR-
ITY OF FORMER ARTICLE SIX-A OF THE BANKING LAW, ENTIRE NET INCOME MEANS
THE FEDERAL TAXABLE INCOME WHICH SUCH BANK IS REQUIRED TO REPORT TO THE
UNITED STATES TREASURY DEPARTMENT UNDER PARAGRAPH ONE OF SUBSECTION (A)
OF SECTION FIVE HUNDRED NINETY-FOUR OF THE INTERNAL REVENUE CODE AND THE
MODIFICATIONS REQUIRED BY THIS SECTION IN COMPUTING ENTIRE NET INCOME
SHALL ONLY BE MADE WITH RESPECT TO SUCH FEDERAL TAXABLE INCOME.
S. 3456 35
(M) IF THE PERIOD COVERED BY A RETURN UNDER THIS ARTICLE IS OTHER THAN
THE PERIOD COVERED BY THE RETURN TO THE UNITED STATES TREASURY DEPART-
MENT,
(1) EXCEPT AS PROVIDED IN PARAGRAPH TWO OF THIS SUBSECTION, ENTIRE NET
INCOME AND ALTERNATIVE ENTIRE NET INCOME SHALL BE DETERMINED BY MULTI-
PLYING THE TAXABLE INCOME REPORTED TO SUCH DEPARTMENT (AS ADJUSTED
PURSUANT TO THE PROVISIONS OF THIS ARTICLE) BY THE NUMBER OF CALENDAR
MONTHS OR MAJOR PARTS THEREOF COVERED BY THE RETURN UNDER THIS ARTICLE
AND DIVIDING BY THE NUMBER OF CALENDAR MONTHS OR MAJOR PARTS THEREOF
COVERED BY THE RETURN TO SUCH DEPARTMENT. IF IT SHALL APPEAR THAT SUCH
METHOD OF DETERMINING ENTIRE NET INCOME OR ALTERNATIVE ENTIRE NET INCOME
DOES NOT PROPERLY REFLECT THE TAXPAYER'S INCOME DURING THE PERIOD
COVERED BY THE RETURN UNDER THIS ARTICLE, THE COMMISSIONER SHALL BE
AUTHORIZED IN HIS OR HER DISCRETION TO DETERMINE SUCH ENTIRE NET INCOME
OR ALTERNATIVE ENTIRE NET INCOME SOLELY ON THE BASIS OF THE TAXPAYER'S
INCOME DURING THE PERIOD COVERED BY ITS RETURN UNDER THIS ARTICLE.
(2) IN THE CASE OF A NEW YORK S TERMINATION YEAR, AN EQUAL PORTION OF
ENTIRE NET INCOME SHALL BE ASSIGNED TO EACH DAY OF SUCH YEAR. THE
PORTION OF SUCH ENTIRE NET INCOME THEREBY ASSIGNED TO THE S SHORT YEAR
AND THE C SHORT YEAR SHALL BE INCLUDED IN THE RESPECTIVE RETURNS FOR THE
S SHORT YEAR AND THE C SHORT YEAR UNDER THIS ARTICLE. HOWEVER, WHERE
PARAGRAPH THREE OF SUBSECTION (S) OF SECTION SIX HUNDRED TWELVE OF THIS
CHAPTER APPLIES, THE PORTION OF SUCH ENTIRE NET INCOME ASSIGNED TO THE S
SHORT YEAR AND THE C SHORT YEAR SHALL BE DETERMINED UNDER NORMAL
ACCOUNTING RULES.
(N) THE TAX COMMISSION MAY, WHENEVER NECESSARY IN ORDER PROPERLY TO
REFLECT THE ENTIRE NET INCOME OF ANY TAXPAYER, DETERMINE THE YEAR OR
PERIOD IN WHICH ANY ITEM OF INCOME OR DEDUCTION SHALL BE INCLUDED, WITH-
OUT REGARD TO THE METHOD OF ACCOUNTING EMPLOYED BY THE TAXPAYER.
(O) QSSS. (1) NEW YORK S CORPORATION. IN THE CASE OF A NEW YORK S
CORPORATION WHICH IS THE PARENT OF A QUALIFIED SUBCHAPTER S SUBSIDIARY
(QSSS) WITH RESPECT TO A TAXABLE YEAR:
(A) WHERE THE QSSS IS NOT AN EXCLUDED CORPORATION,
(I) IN DETERMINING THE ENTIRE NET INCOME OF SUCH PARENT CORPORATION,
ALL ASSETS, LIABILITIES, INCOME AND DEDUCTIONS OF THE QSSS SHALL BE
TREATED AS ASSETS, LIABILITIES, INCOME AND DEDUCTIONS OF THE PARENT
CORPORATION, AND
(II) THE QSSS SHALL BE EXEMPT FROM ALL TAXES IMPOSED BY THIS ARTICLE,
AND
(B) WHERE THE QSSS IS AN EXCLUDED CORPORATION, THE ENTIRE NET INCOME
OF THE PARENT CORPORATION SHALL BE DETERMINED AS IF THE FEDERAL QSSS
ELECTION HAD NOT BEEN MADE.
(2) NEW YORK C CORPORATION. IN THE CASE OF A NEW YORK C CORPORATION
WHICH IS THE PARENT OF A QSSS WITH RESPECT TO A TAXABLE YEAR:
(A) WHERE THE QSSS IS A TAXPAYER,
(I) IN DETERMINING THE ENTIRE NET INCOME OF SUCH PARENT CORPORATION,
ALL ASSETS, LIABILITIES, INCOME AND DEDUCTIONS OF THE QSSS SHALL BE
TREATED AS ASSETS, LIABILITIES, INCOME AND DEDUCTIONS OF THE PARENT
CORPORATION, AND
(II) THE QSSS SHALL BE EXEMPT FROM ALL TAXES IMPOSED BY THIS ARTICLE,
AND
(B) WHERE THE QSSS IS NOT A TAXPAYER,
(I) IF THE QSSS IS NOT AN EXCLUDED CORPORATION, THE PARENT CORPORATION
MAY MAKE A QSSS INCLUSION ELECTION TO INCLUDE ALL ASSETS, LIABILITIES,
INCOME AND DEDUCTIONS OF THE QSSS AS ASSETS, LIABILITIES, INCOME AND
DEDUCTIONS OF THE PARENT CORPORATION, AND
S. 3456 36
(II) IN THE ABSENCE OF SUCH ELECTION, OR WHERE THE QSSS IS AN EXCLUDED
CORPORATION, THE ENTIRE NET INCOME OF THE PARENT CORPORATION SHALL BE
DETERMINED AS IF THE FEDERAL QSSS ELECTION HAD NOT BEEN MADE.
(3) NON-NEW YORK S CORPORATION NOT EXCLUDED. IN THE CASE OF AN S
CORPORATION WHICH IS NOT A TAXPAYER AND NOT AN EXCLUDED CORPORATION, AND
WHICH IS THE PARENT OF A QSSS WHICH IS A TAXPAYER, THE SHAREHOLDERS OF
THE PARENT CORPORATION SHALL BE ENTITLED TO MAKE THE NEW YORK S ELECTION
UNDER SUBSECTION (A) OF SECTION SIX HUNDRED SIXTY OF THIS CHAPTER.
(A) FOR ANY TAXABLE YEAR FOR WHICH SUCH ELECTION IS IN EFFECT, THE
PARENT CORPORATION SHALL BE SUBJECT TO TAX UNDER THIS ARTICLE AS A NEW
YORK S CORPORATION, AND THE PROVISIONS OF SUBPARAGRAPH (A) OF PARAGRAPH
ONE OF THIS SUBSECTION SHALL APPLY.
(B) FOR ANY TAXABLE YEAR FOR WHICH SUCH ELECTION IS NOT IN EFFECT, THE
QSSS SHALL BE A NEW YORK C CORPORATION, AND THE ENTIRE NET INCOME OF THE
QSSS SHALL BE DETERMINED AS IF THE FEDERAL QSSS ELECTION HAD NOT BEEN
MADE. FOR PURPOSES OF SUCH DETERMINATION, THE TAXABLE YEAR OF THE PARENT
CORPORATION SHALL CONSTITUTE THE TAXABLE YEAR OF THE QSSS, EXCLUDING,
HOWEVER, ANY PORTION OF SUCH YEAR DURING WHICH THE QSSS IS NOT A TAXPAY-
ER.
(4) S CORPORATION EXCLUDED. IN THE CASE OF AN S CORPORATION WHICH IS
AN EXCLUDED CORPORATION AND WHICH IS THE PARENT OF A QSSS WHICH IS A
TAXPAYER, THE QSSS SHALL BE A NEW YORK C CORPORATION AND THE PROVISIONS
OF SUBPARAGRAPH (B) OF PARAGRAPH THREE OF THIS SUBSECTION SHALL APPLY.
(5) EXCLUDED CORPORATION. THE TERM "EXCLUDED CORPORATION" MEANS A
CORPORATION SUBJECT TO TAX UNDER SECTIONS ONE HUNDRED EIGHTY-THREE
THROUGH ONE HUNDRED EIGHTY-FIVE OF THIS CHAPTER, INCLUSIVE, OR ARTICLE
NINE-A OR THIRTY-THREE OF THIS CHAPTER, OR A FOREIGN CORPORATION NOT
TAXABLE BY THIS STATE WHICH, IF IT WERE TAXABLE, WOULD BE SUBJECT TO TAX
UNDER ANY OF SUCH SECTIONS OR ARTICLES.
(6) TAXPAYER. FOR PURPOSES OF THIS PARAGRAPH, THE TERM "TAXPAYER"
MEANS A PARENT CORPORATION OR QSSS SUBJECT TO TAX UNDER THIS ARTICLE,
DETERMINED WITHOUT REGARD TO THE PROVISIONS OF THIS PARAGRAPH.
(7) QSSS INCLUSION ELECTION. THE ELECTION UNDER CLAUSE (I) OF SUBPARA-
GRAPH (B) OF PARAGRAPH TWO OF THIS SUBSECTION SHALL BE EFFECTIVE FOR THE
TAXABLE YEAR FOR WHICH MADE AND FOR ALL SUCCEEDING TAXABLE YEARS OF THE
CORPORATION UNTIL SUCH ELECTION IS TERMINATED. AN ELECTION OR TERMI-
NATION SHALL BE MADE ON SUCH FORM AND IN SUCH MANNER AS THE COMMISSIONER
MAY PRESCRIBE BY REGULATION OR INSTRUCTION.
(P) EMERGING TECHNOLOGY INVESTMENT DEFERRAL. IN THE CASE OF ANY SALE
OF A QUALIFIED EMERGING TECHNOLOGIES INVESTMENT HELD FOR MORE THAN THIR-
TY-SIX MONTHS AND WITH RESPECT TO WHICH THE TAXPAYER ELECTS THE APPLICA-
TION OF THIS SUBSECTION, GAIN FROM SUCH SALE SHALL BE RECOGNIZED ONLY TO
THE EXTENT THAT THE AMOUNT REALIZED ON SUCH SALE EXCEEDS THE COST OF ANY
QUALIFIED EMERGING TECHNOLOGIES INVESTMENT PURCHASED BY THE TAXPAYER
DURING THE THREE HUNDRED SIXTY-FIVE-DAY PERIOD BEGINNING ON THE DATE OF
SUCH SALE, REDUCED BY ANY PORTION OF SUCH COST PREVIOUSLY TAKEN INTO
ACCOUNT UNDER THIS SUBSECTION. FOR PURPOSES OF THIS SUBSECTION THE
FOLLOWING SHALL APPLY:
(1) A QUALIFIED INVESTMENT IS STOCK OF A CORPORATION OR AN INTEREST,
OTHER THAN AS A CREDITOR, IN A PARTNERSHIP OR LIMITED LIABILITY COMPANY
THAT WAS ACQUIRED BY THE TAXPAYER AS PROVIDED IN INTERNAL REVENUE CODE §
1202(C)(1)(B), EXCEPT THAT THE REFERENCE TO THE TERM "STOCK" IN SUCH
SECTION SHALL BE READ AS "INVESTMENT," OR BY THE TAXPAYER FROM A PERSON
WHO HAD ACQUIRED SUCH STOCK OR INTEREST IN SUCH A MANNER.
(2) A QUALIFIED EMERGING TECHNOLOGY INVESTMENT IS A QUALIFIED INVEST-
MENT, THAT WAS HELD BY THE TAXPAYER FOR AT LEAST THIRTY-SIX MONTHS, IN A
S. 3456 37
COMPANY DEFINED IN PARAGRAPH (C) OF SUBDIVISION ONE OF SECTION THIRTY-
ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW OR AN INVESTMENT IN A
PARTNERSHIP OR LIMITED LIABILITY COMPANY THAT IS TAXED AS A PARTNERSHIP
TO THE EXTENT THAT SUCH PARTNERSHIP OR LIMITED LIABILITY COMPANY INVESTS
IN QUALIFIED EMERGING TECHNOLOGY COMPANIES.
(3) FOR PURPOSES OF DETERMINING WHETHER THE NONRECOGNITION OF GAIN
UNDER THIS SUBSECTION APPLIES TO A QUALIFIED EMERGING TECHNOLOGIES
INVESTMENT THAT IS SOLD, THE TAXPAYER'S HOLDING PERIOD FOR SUCH INVEST-
MENT AND THE QUALIFIED EMERGING TECHNOLOGIES INVESTMENT THAT IS
PURCHASED SHALL BE DETERMINED WITHOUT REGARD TO INTERNAL REVENUE CODE §
1223.
(Q) AMOUNTS DEFERRED. THE AMOUNT DEFERRED UNDER SUBSECTION (P) OF THIS
SECTION SHALL BE ADDED TO ENTIRE NET INCOME WHEN THE REINVESTMENT IN THE
NEW YORK QUALIFIED EMERGING TECHNOLOGY COMPANY WHICH QUALIFIED A TAXPAY-
ER FOR SUCH DEFERRAL IS SOLD.
(R) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER THIRTY-FIRST, TWO THOU-
SAND TWO, IN THE CASE OF QUALIFIED PROPERTY DESCRIBED IN PARAGRAPH TWO
OF SUBSECTION K OF SECTION 168 OF THE INTERNAL REVENUE CODE, OTHER THAN
QUALIFIED RESURGENCE ZONE PROPERTY DESCRIBED IN SUBSECTION (U) OF THIS
SECTION, AND OTHER THAN QUALIFIED NEW YORK LIBERTY ZONE PROPERTY
DESCRIBED IN PARAGRAPH TWO OF SUBSECTION B OF SECTION 1400L OF THE
INTERNAL REVENUE CODE (WITHOUT REGARD TO CLAUSE (I) OF SUBPARAGRAPH (C)
OF SUCH PARAGRAPH), WHICH WAS PLACED IN SERVICE ON OR AFTER JUNE FIRST,
TWO THOUSAND THREE, A TAXPAYER SHALL BE ALLOWED WITH RESPECT TO SUCH
PROPERTY THE DEPRECIATION DEDUCTION ALLOWABLE UNDER SECTION 167 OF THE
INTERNAL REVENUE CODE AS SUCH SECTION WOULD HAVE APPLIED TO SUCH PROPER-
TY HAD IT BEEN ACQUIRED BY THE TAXPAYER ON SEPTEMBER TENTH, TWO THOUSAND
ONE.
(S) RELATED MEMBERS EXPENSE ADD BACK. (1) DEFINITIONS. (A) RELATED
MEMBER. "RELATED MEMBER" MEANS A RELATED PERSON AS DEFINED IN SUBPARA-
GRAPH (C) OF PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED
SIXTY-FIVE OF THE INTERNAL REVENUE CODE, EXCEPT THAT "FIFTY PERCENT"
SHALL BE SUBSTITUTED FOR "TEN PERCENT".
(B) EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF TAX" MEANS, AS TO ANY
STATE OR U.S. POSSESSION, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY
THE STATE OR POSSESSION ON OR MEASURED BY A RELATED MEMBER'S NET INCOME
MULTIPLIED BY THE APPORTIONMENT PERCENTAGE, IF ANY, APPLICABLE TO THE
RELATED MEMBER UNDER THE LAWS OF SAID JURISDICTION. FOR PURPOSES OF THIS
DEFINITION, THE EFFECTIVE RATE OF TAX AS TO ANY STATE OR U.S. POSSESSION
IS ZERO WHERE THE RELATED MEMBER'S NET INCOME TAX LIABILITY IN SAID
JURISDICTION IS REPORTED ON A COMBINED OR CONSOLIDATED RETURN INCLUDING
BOTH THE TAXPAYER AND THE RELATED MEMBER WHERE THE REPORTED TRANSACTIONS
BETWEEN THE TAXPAYER AND THE RELATED MEMBER ARE ELIMINATED OR OFFSET.
ALSO, FOR PURPOSES OF THIS DEFINITION, WHEN COMPUTING THE EFFECTIVE RATE
OF TAX FOR A JURISDICTION IN WHICH A RELATED MEMBER'S NET INCOME IS
ELIMINATED OR OFFSET BY A CREDIT OR SIMILAR ADJUSTMENT THAT IS DEPENDENT
UPON THE RELATED MEMBER EITHER MAINTAINING OR MANAGING INTANGIBLE PROP-
ERTY OR COLLECTING INTEREST INCOME IN THAT JURISDICTION, THE MAXIMUM
STATUTORY RATE OF TAX IMPOSED BY SAID JURISDICTION SHALL BE DECREASED TO
REFLECT THE STATUTORY RATE OF TAX THAT APPLIES TO THE RELATED MEMBER AS
EFFECTIVELY REDUCED BY SUCH CREDIT OR SIMILAR ADJUSTMENT.
(C) ROYALTY PAYMENTS. ROYALTY PAYMENTS ARE PAYMENTS DIRECTLY CONNECTED
TO THE ACQUISITION, USE, MAINTENANCE OR MANAGEMENT, OWNERSHIP, SALE,
EXCHANGE, OR ANY OTHER DISPOSITION OF LICENSES, TRADEMARKS, COPYRIGHTS,
TRADE NAMES, TRADE DRESS, SERVICE MARKS, MASK WORKS, TRADE SECRETS,
PATENTS AND ANY OTHER SIMILAR TYPES OF INTANGIBLE ASSETS AS DETERMINED
S. 3456 38
BY THE COMMISSIONER, AND INCLUDE AMOUNTS ALLOWABLE AS INTEREST
DEDUCTIONS UNDER SECTION ONE HUNDRED SIXTY-THREE OF THE INTERNAL REVENUE
CODE TO THE EXTENT SUCH AMOUNTS ARE DIRECTLY OR INDIRECTLY FOR, RELATED
TO OR IN CONNECTION WITH THE ACQUISITION, USE, MAINTENANCE OR MANAGE-
MENT, OWNERSHIP, SALE, EXCHANGE OR DISPOSITION OF SUCH INTANGIBLE
ASSETS.
(D) VALID BUSINESS PURPOSE. A VALID BUSINESS PURPOSE IS ONE OR MORE
BUSINESS PURPOSES, OTHER THAN THE AVOIDANCE OR REDUCTION OF TAXATION,
WHICH ALONE OR IN COMBINATION CONSTITUTE THE PRIMARY MOTIVATION FOR SOME
BUSINESS ACTIVITY OR TRANSACTION, WHICH ACTIVITY OR TRANSACTION CHANGES
IN A MEANINGFUL WAY, APART FROM TAX EFFECTS, THE ECONOMIC POSITION OF
THE TAXPAYER. THE ECONOMIC POSITION OF THE TAXPAYER INCLUDES AN INCREASE
IN THE MARKET SHARE OF THE TAXPAYER, OR THE ENTRY BY THE TAXPAYER INTO
NEW BUSINESS MARKETS.
(2) ROYALTY EXPENSE ADD BACKS. (A) EXCEPT WHERE A TAXPAYER IS INCLUDED
IN A COMBINED RETURN WITH A RELATED MEMBER PURSUANT TO SUBSECTION (F) OF
SECTION FOURTEEN HUNDRED SIXTY-TWO OF THIS ARTICLE, FOR THE PURPOSE OF
COMPUTING ENTIRE NET INCOME, A TAXPAYER MUST ADD BACK ROYALTY PAYMENTS
DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN CONNECTION WITH ONE
OR MORE DIRECT OR INDIRECT TRANSACTIONS WITH ONE OR MORE RELATED MEMBERS
DURING THE TAXABLE YEAR TO THE EXTENT DEDUCTIBLE IN CALCULATING FEDERAL
TAXABLE INCOME.
(B) EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL
NOT APPLY TO THE PORTION OF THE ROYALTY PAYMENT THAT THE TAXPAYER ESTAB-
LISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND IN THE FORM
SPECIFIED BY THE COMMISSIONER, MEETS ALL OF THE FOLLOWING REQUIREMENTS:
(I) THE RELATED MEMBER WAS SUBJECT TO TAX IN THIS STATE OR ANOTHER STATE
OR POSSESSION OF THE UNITED STATES OR A FOREIGN NATION OR SOME COMBINA-
TION THEREOF ON A TAX BASE THAT INCLUDED THE ROYALTY PAYMENT PAID,
ACCRUED OR INCURRED BY THE TAXPAYER; (II) THE RELATED MEMBER DURING THE
SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, ACCRUED OR INCURRED SUCH
PORTION TO A PERSON THAT IS NOT A RELATED MEMBER; AND (III) THE TRANS-
ACTION GIVING RISE TO THE ROYALTY PAYMENT BETWEEN THE TAXPAYER AND THE
RELATED MEMBER WAS UNDERTAKEN FOR A VALID BUSINESS PURPOSE.
(II) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF THE
TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND
IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE RELATED MEMBER
WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME IN THIS STATE OR
ANOTHER STATE OR POSSESSION OF THE UNITED STATES OR SOME COMBINATION
THEREOF; (II) THE TAX BASE FOR SAID TAX INCLUDED THE ROYALTY PAYMENT
PAID, ACCRUED OR INCURRED BY THE TAXPAYER; AND (III) THE AGGREGATE
EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDIC-
TIONS IS NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT
APPLIED TO THE TAXPAYER UNDER SECTION FOURTEEN HUNDRED FIFTY-FIVE OF
THIS ARTICLE FOR THE TAXABLE YEAR.
(III) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF
THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE
AND IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE ROYALTY
PAYMENT WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGANIZED
UNDER THE LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (II) THE
RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN-
SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III)
THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX BASE
THAT INCLUDED THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE
TAXPAYER; (IV) THE RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS
TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT
S. 3456 39
IMPOSED BY THIS STATE; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR
INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI-
NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
(IV) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF THE
TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE
OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE COMMISSIONER MAY, IN HIS
OR HER DISCRETION, AGREE TO THE APPLICATION OR USE OF ALTERNATIVE
ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE
OF SUCH AGREEMENT THE INCOME OF THE TAXPAYER WOULD NOT BE PROPERLY
REFLECTED.
(T) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER THIRTY-FIRST, TWO THOU-
SAND TWO, UPON THE DISPOSITION OF PROPERTY TO WHICH SUBSECTION (R) OF
THIS SECTION APPLIES, THE AMOUNT OF ANY GAIN OR LOSS INCLUDIBLE IN
ENTIRE NET INCOME SHALL BE ADJUSTED TO REFLECT THE INCLUSIONS AND EXCLU-
SIONS FROM ENTIRE NET INCOME PURSUANT TO PARAGRAPH THIRTEEN OF
SUBSECTION (B) OF THIS SECTION ATTRIBUTABLE TO SUCH PROPERTY.
(U) FOR PURPOSES OF SUBSECTIONS (R) AND (T) OF THIS SECTION, QUALIFIED
RESURGENCE ZONE PROPERTY SHALL MEAN QUALIFIED PROPERTY DESCRIBED IN
PARAGRAPH TWO OF SUBSECTION K OF SECTION 168 OF THE INTERNAL REVENUE
CODE SUBSTANTIALLY ALL OF THE USE OF WHICH IS IN THE RESURGENCE ZONE, AS
DEFINED BELOW, AND IS IN THE ACTIVE CONDUCT OF A TRADE OR BUSINESS BY
THE TAXPAYER IN SUCH ZONE, AND THE ORIGINAL USE OF WHICH IN THE RESUR-
GENCE ZONE COMMENCES WITH THE TAXPAYER AFTER DECEMBER THIRTY-FIRST, TWO
THOUSAND TWO. THE RESURGENCE ZONE SHALL MEAN THE AREA OF NEW YORK COUNTY
BOUNDED ON THE SOUTH BY A LINE RUNNING FROM THE INTERSECTION OF THE
HUDSON RIVER WITH THE HOLLAND TUNNEL, AND RUNNING THENCE EAST TO CANAL
STREET, THEN RUNNING ALONG THE CENTERLINE OF CANAL STREET TO THE INTER-
SECTION OF THE BOWERY AND CANAL STREET, RUNNING THENCE IN A SOUTHEASTER-
LY DIRECTION DIAGONALLY ACROSS MANHATTAN BRIDGE PLAZA, TO THE MANHATTAN
BRIDGE AND THENCE ALONG THE CENTERLINE OF THE MANHATTAN BRIDGE TO THE
POINT WHERE THE CENTERLINE OF THE MANHATTAN BRIDGE WOULD INTERSECT WITH
THE EASTERLY BANK OF THE EAST RIVER, AND BOUNDED ON THE NORTH BY A LINE
RUNNING FROM THE INTERSECTION OF THE HUDSON RIVER WITH THE HOLLAND
TUNNEL AND RUNNING THENCE NORTH ALONG WEST AVENUE TO THE INTERSECTION OF
CLARKSON STREET THEN RUNNING EAST ALONG THE CENTERLINE OF CLARKSON
STREET TO THE INTERSECTION OF WASHINGTON AVENUE, THEN RUNNING SOUTH
ALONG THE CENTERLINE OF WASHINGTON AVENUE TO THE INTERSECTION OF WEST
HOUSTON STREET, THEN EAST ALONG THE CENTERLINE OF WEST HOUSTON STREET,
THEN AT THE INTERSECTION OF THE AVENUE OF THE AMERICAS CONTINUING EAST
ALONG THE CENTERLINE OF EAST HOUSTON STREET TO THE EASTERLY BANK OF THE
EAST RIVER.
(V) DISALLOWED INVESTMENT PROCEEDS FROM A REIT OR RIC. (1)(A) AS USED
IN THIS SUBSECTION, THE TERM "REIT" MEANS A REAL ESTATE INVESTMENT TRUST
AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-SIX OF THE INTERNAL REVENUE
CODE.
(B) AS USED IN THIS SUBSECTION, THE TERM "RIC" MEANS A REGULATED
INVESTMENT COMPANY AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-ONE OF THE
INTERNAL REVENUE CODE.
(C) AS USED IN THIS SUBSECTION, THE TERM "REIT HOLDING COMPANY" MEANS
A CORPORATION THAT (I) OWNS, DIRECTLY OR INDIRECTLY, OVER FIFTY PERCENT
OF THE CAPITAL STOCK OF A REIT, OR (II) IN CONNECTION WITH ONE OR MORE
OTHER CORPORATIONS IN ITS AFFILIATED GROUP (AS SUCH TERM IS DEFINED IN
SECTION FIFTEEN HUNDRED FOUR OF THE INTERNAL REVENUE CODE WITHOUT REGARD
TO THE EXCLUSIONS PROVIDED FOR IN SUBSECTION (B) OF SUCH SECTION FIFTEEN
HUNDRED FOUR), OWNS OVER FIFTY PERCENT OF THE CAPITAL STOCK OF A REIT.
S. 3456 40
(D) AS USED IN THIS SUBSECTION, THE TERM "RIC HOLDING COMPANY" MEANS A
CORPORATION THAT (I) OWNS, DIRECTLY OR INDIRECTLY, OVER FIFTY PERCENT OF
THE CAPITAL STOCK OF A RIC, OR (II) IN CONNECTION WITH ONE OR MORE OTHER
CORPORATIONS IN ITS AFFILIATED GROUP (AS SUCH TERM IS DEFINED IN SECTION
FIFTEEN HUNDRED FOUR OF THE INTERNAL REVENUE CODE WITHOUT REGARD TO THE
EXCLUSIONS PROVIDED FOR IN SUBSECTION (B) OF SUCH SECTION FIFTEEN
HUNDRED FOUR), OWNS OVER FIFTY PERCENT OF THE CAPITAL STOCK OF A RIC.
(2) FOR PURPOSES OF COMPUTING ENTIRE NET INCOME OR OTHER APPLICABLE
TAXABLE BASE, THERE SHALL BE NO DEDUCTION FOR DISALLOWED INVESTMENT
PROCEEDS AS DEFINED IN PARAGRAPHS THREE AND FOUR OF THIS SUBSECTION.
(3) FOR PURPOSES OF THE DEDUCTION OF GAINS IN EXCESS OF LOSSES UNDER
SUBPARAGRAPH (III) OF PARAGRAPH ELEVEN OF SUBSECTION (E) OF THIS
SECTION, DISALLOWED INVESTMENT PROCEEDS MEANS (A) GAIN OR LOSS FROM THE
DISPOSITION OF AN OWNERSHIP INTEREST IN A REIT, (B) GAIN OR LOSS FROM
THE DISPOSITION OF AN OWNERSHIP INTEREST IN A RIC, AND (C) GAIN OR LOSS
FROM THE DISPOSITION OF AN OWNERSHIP INTEREST IN A REIT HOLDING COMPANY
OR A RIC HOLDING COMPANY TO THE EXTENT THE GAIN OR LOSS IS ATTRIBUTABLE
TO SUCH HOLDING COMPANY'S OWNERSHIP INTEREST IN A REIT OR A RIC.
(4) FOR PURPOSES OF THE DEDUCTION OF DIVIDEND INCOME FROM SUBSIDIARY
CAPITAL UNDER SUBPARAGRAPH (II) OF PARAGRAPH ELEVEN OF SUBSECTION (E) OF
THIS SECTION, DISALLOWED INVESTMENT PROCEEDS MEANS (A) DIVIDENDS FROM A
REIT, AND (B) DIVIDENDS FROM A RIC, (C) DIVIDENDS FROM A REIT HOLDING
COMPANY OR A RIC HOLDING COMPANY TO THE EXTENT THE DIVIDENDS ARE ATTRIB-
UTABLE TO SUCH HOLDING COMPANY'S OWNERSHIP INTEREST IN A REIT OR A RIC.
(5) NOTWITHSTANDING PARAGRAPHS THREE AND FOUR OF THIS SUBSECTION,
(A) DISALLOWED INVESTMENT PROCEEDS SHALL NOT INCLUDE ANY DIVIDENDS
FROM, OR ATTRIBUTABLE TO, A REIT OR A RIC REQUIRED TO BE INCLUDED IN A
COMBINED REPORT PURSUANT TO SUBDIVISIONS FIVE OR SEVEN OF SECTION TWO
HUNDRED NINE OF THIS CHAPTER TO THE EXTENT SUCH DIVIDENDS WERE INCLUDED
IN THE COMPUTATION OF COMBINED ENTIRE NET INCOME; AND
(B) A BANKING CORPORATION, OR A GROUP OF BANKING CORPORATIONS PROPERLY
INCLUDED IN A COMBINED RETURN, WITH TAXABLE ASSETS (OR COMBINED TAXABLE
ASSETS IN THE CASE OF A COMBINED RETURN) FOR THE TAXABLE YEAR OF EIGHT
BILLION DOLLARS OR LESS SHALL NOT HAVE ANY DISALLOWED INVESTMENT
PROCEEDS.
§ 1453-A. COMPUTATION OF ALTERNATIVE ENTIRE NET INCOME. (A) ALTERNA-
TIVE ENTIRE NET INCOME MEANS ENTIRE NET INCOME AS DETERMINED PURSUANT TO
SECTION FOURTEEN HUNDRED FIFTY-THREE OF THIS ARTICLE, EXCEPT THAT THE
DEDUCTIONS DESCRIBED IN PARAGRAPHS ELEVEN AND TWELVE OF SUBSECTION (E)
OF SECTION FOURTEEN HUNDRED FIFTY-THREE OF THIS ARTICLE SHALL NOT BE
ALLOWED.
(B) ANY ELECTION MADE PURSUANT TO PARAGRAPH TWO OF SUBSECTION (B) OF
SECTION FOURTEEN HUNDRED FIFTY-FOUR OF THIS ARTICLE WITH RESPECT TO THE
MODIFICATION PROVIDED FOR IN SUBSECTION (F) OF SECTION FOURTEEN HUNDRED
FIFTY-THREE OF THIS ARTICLE SHALL BE DEEMED TO HAVE BEEN MADE FOR
PURPOSES OF COMPUTING ALTERNATIVE ENTIRE NET INCOME.
§ 1454. ALLOCATION. (A) IN GENERAL. IF A TAXPAYER'S ENTIRE NET INCOME,
ALTERNATIVE ENTIRE NET INCOME, OR TAXABLE ASSETS ARE DERIVED FROM BUSI-
NESS CARRIED ON WITHIN AND WITHOUT THE STATE, THE TAXPAYER SHALL, FOR
PURPOSES OF COMPUTING ALLOCATION PERCENTAGES, COMPUTE PAYROLL, RECEIPTS,
AND DEPOSITS PERCENTAGES IN ACCORDANCE WITH THE FOLLOWING RULES:
(1) THE TAXPAYER SHALL ASCERTAIN THE PERCENTAGE WHICH EIGHTY PERCENT
OF THE TOTAL WAGES, SALARIES AND OTHER PERSONAL SERVICE COMPENSATION
DURING THE TAXABLE YEAR OF EMPLOYEES WITHIN THE STATE, EXCEPT WAGES,
SALARIES AND OTHER PERSONAL SERVICE COMPENSATION OF GENERAL EXECUTIVE
OFFICERS, BEARS TO THE TOTAL WAGES, SALARIES AND OTHER PERSONAL SERVICE
S. 3456 41
COMPENSATION DURING THE TAXABLE YEAR OF ALL THE TAXPAYER'S EMPLOYEES
WITHIN AND WITHOUT THE STATE, EXCEPT WAGES, SALARIES AND OTHER PERSONAL
SERVICE COMPENSATION OF GENERAL EXECUTIVE OFFICERS.
(2) (A) THE TAXPAYER SHALL ASCERTAIN THE PERCENTAGE WHICH THE RECEIPTS
OF THE TAXPAYER ARISING DURING THE TAXABLE YEAR FROM:
(I) LOANS (INCLUDING A TAXPAYER'S PORTION OF A PARTICIPATION IN A
LOAN) AND FINANCING LEASES WITHIN THE STATE, AND ALL OTHER BUSINESS
RECEIPTS EARNED WITHIN THE STATE, BEAR TO
(II) THE TOTAL AMOUNT OF THE TAXPAYER'S RECEIPTS FROM LOANS (INCLUDING
A TAXPAYER'S PORTION OF A PARTICIPATION IN A LOAN) AND FINANCING LEASES
AND ALL OTHER BUSINESS RECEIPTS WITHIN AND WITHOUT THE STATE.
(B) ALL INTEREST FROM LOANS AND FINANCING LEASES IS LOCATED WHERE THE
GREATER PORTION OF INCOME PRODUCING ACTIVITY RELATED TO THE LOAN OR
FINANCING LEASE OCCURRED; PROVIDED, HOWEVER:
(I) IN THE CASE OF A TAXPAYER DESCRIBED IN PARAGRAPH ONE, TWO, THREE,
FOUR, FIVE OR SEVEN OF SUBSECTION (A) OF SECTION FOURTEEN HUNDRED
FIFTY-TWO OF THIS ARTICLE, A LOAN OR FINANCING LEASE ATTRIBUTED BY SUCH
TAXPAYER TO A BRANCH WITHOUT THE STATE SHALL BE PRESUMED TO BE PROPERLY
SO ATTRIBUTED PROVIDED THAT SUCH PRESUMPTION MAY BE REBUTTED IF THE TAX
COMMISSION DEMONSTRATES THAT THE GREATER PORTION OF INCOME PRODUCING
ACTIVITY RELATED TO THE LOAN OR FINANCING LEASE DID NOT OCCUR AT SUCH
BRANCH. WHERE SUCH PRESUMPTION HAS BEEN REBUTTED, THE LOAN OR FINANCING
LEASE SHALL BE PRESUMED TO BE WITHIN THIS STATE IF THE TAXPAYER HAD A
BRANCH WITHIN THIS STATE AT THE TIME THE LOAN OR FINANCING LEASE WAS
MADE. THE TAXPAYER MAY REBUT SUCH PRESUMPTION BY DEMONSTRATING THAT THE
GREATER PORTION OF INCOME PRODUCING ACTIVITY RELATED TO THE LOAN OR
FINANCING LEASE DID NOT OCCUR WITHIN THE STATE. IN THE CASE OF A LOAN OR
FINANCING LEASE WHICH IS RECORDED ON THE BOOKS OF A PLACE WITHOUT THE
STATE WHICH IS NOT A BRANCH, IT SHALL BE PRESUMED THAT THE GREATER
PORTION OF INCOME PRODUCING ACTIVITY RELATED TO SUCH LOAN OR FINANCING
LEASE OCCURRED WITHIN THIS STATE IF THE TAXPAYER HAD A BRANCH WITHIN
THIS STATE AT THE TIME THE LOAN OR FINANCING LEASE WAS MADE. THE TAXPAY-
ER MAY REBUT SUCH PRESUMPTION BY DEMONSTRATING THAT THE GREATER PORTION
OF INCOME PRODUCING ACTIVITY RELATED TO THE LOAN OR FINANCING LEASE DID
NOT OCCUR WITHIN THIS STATE.
(II) IN THE CASE OF A TAXPAYER DESCRIBED IN PARAGRAPH SIX OR NINE OF
SUBSECTION (A) OF SECTION FOURTEEN HUNDRED FIFTY-TWO OF THIS ARTICLE, A
LOAN OR FINANCING LEASE ATTRIBUTED BY SUCH TAXPAYER TO A BONA FIDE
OFFICE WITHOUT THE STATE SHALL BE PRESUMED TO BE PROPERLY SO ATTRIBUTED
PROVIDED THAT SUCH PRESUMPTION MAY BE REBUTTED IF THE TAX COMMISSION
DEMONSTRATES THAT THE GREATER PORTION OF INCOME PRODUCING ACTIVITY
RELATED TO THE LOAN OR FINANCING LEASE DID NOT OCCUR WITHOUT THIS STATE.
(C) RECEIPTS FROM LEASE TRANSACTIONS OTHER THAN FINANCING LEASES
REFERRED TO IN SUBPARAGRAPH (B) ARE LOCATED WHERE THE PROPERTY SUBJECT
TO THE LEASE IS LOCATED.
(D) (I) INTEREST, AND FEES AND PENALTIES IN THE NATURE OF INTEREST,
FROM BANK, CREDIT, TRAVEL AND ENTERTAINMENT CARD RECEIVABLES ARE EARNED
WITHIN THE STATE IF THE MAILING ADDRESS OF THE CARD HOLDER IN THE
RECORDS OF THE TAXPAYER IS IN THE STATE;
(II) SERVICE CHARGES AND FEES FROM SUCH CARDS ARE EARNED WITHIN THE
STATE IF THE MAILING ADDRESS OF THE CARD HOLDER IN THE RECORDS OF THE
TAXPAYER IS IN THE STATE; AND
(III) RECEIPTS FROM MERCHANT DISCOUNTS ARE EARNED WITHIN THE STATE IF
THE MERCHANT IS LOCATED WITHIN THE STATE.
(E) THE PORTION OF TOTAL NET GAINS AND OTHER INCOME FROM TRADING
ACTIVITIES (INCLUDING BUT NOT LIMITED TO FOREIGN EXCHANGE, OPTIONS AND
S. 3456 42
FINANCIAL FUTURES), AND FROM INVESTMENT ACTIVITIES WHICH IS ATTRIBUTED
WITHIN THE STATE SHALL BE ASCERTAINED BY MULTIPLYING SUCH TOTAL NET
GAINS AND OTHER INCOME BY A FRACTION THE NUMERATOR OF WHICH IS THE AVER-
AGE VALUE OF TRADING ASSETS AND INVESTMENT ASSETS ATTRIBUTABLE TO THIS
STATE AND THE DENOMINATOR OF WHICH IS THE AVERAGE VALUE OF ALL TRADING
AND INVESTMENT ASSETS. A TRADING ASSET OR INVESTMENT ASSET IS ATTRIBUT-
ABLE TO THIS STATE IF THE GREATER PORTION OF INCOME PRODUCING ACTIVITY
RELATED TO THE TRADING ASSET OR INVESTMENT ASSET OCCURRED WITHIN THE
STATE.
(F) FEES OR CHARGES FROM THE ISSUANCE OF LETTERS OF CREDIT, TRAVELERS
CHECKS AND MONEY ORDERS ARE EARNED WITHIN THE STATE IF SUCH LETTERS OF
CREDIT, TRAVELERS CHECKS OR MONEY ORDERS ARE ISSUED WITHIN THE STATE.
(G) RULES FOR RECEIPTS FROM CERTAIN SERVICES TO INVESTMENT COMPANIES.
(1) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
ONE, THE PORTION OF RECEIPTS RECEIVED FROM AN INVESTMENT COMPANY ARISING
FROM THE SALE OF MANAGEMENT, ADMINISTRATION OR DISTRIBUTION SERVICES TO
SUCH INVESTMENT COMPANY DETERMINED IN ACCORDANCE WITH CLAUSE TWO OF THIS
SUBPARAGRAPH SHALL BE DEEMED TO ARISE FROM SERVICES PERFORMED WITHIN THE
STATE (SUCH PORTION REFERRED TO HEREIN AS THE NEW YORK PORTION).
(2) THE NEW YORK PORTION SHALL BE THE PRODUCT OF (I) THE TOTAL OF SUCH
RECEIPTS FROM THE SALE OF SUCH SERVICES AND (II) A FRACTION. THE NUMERA-
TOR OF THAT FRACTION IS THE SUM OF THE MONTHLY PERCENTAGES (AS DEFINED
HEREINAFTER) DETERMINED FOR EACH MONTH OF THE INVESTMENT COMPANY'S TAXA-
BLE YEAR FOR FEDERAL INCOME TAX PURPOSES WHICH TAXABLE YEAR ENDS WITHIN
THE TAXABLE YEAR OF THE TAXPAYER (BUT EXCLUDING ANY MONTH DURING WHICH
THE INVESTMENT COMPANY HAD NO OUTSTANDING SHARES). THE MONTHLY PERCENT-
AGE FOR EACH SUCH MONTH IS DETERMINED BY DIVIDING (I) THE NUMBER OF
SHARES IN THE INVESTMENT COMPANY WHICH ARE OWNED ON THE LAST DAY OF THE
MONTH BY SHAREHOLDERS WHICH ARE DOMICILED IN THE STATE BY (II) THE TOTAL
NUMBER OF SHARES IN THE INVESTMENT COMPANY OUTSTANDING ON THAT DATE. THE
DENOMINATOR OF THE FRACTION IS THE NUMBER OF SUCH MONTHLY PERCENTAGES.
(3)(I) FOR PURPOSES OF THIS SUBPARAGRAPH THE TERM "DOMICILE", IN THE
CASE OF AN INDIVIDUAL SHALL HAVE THE MEANING ASCRIBED TO IT UNDER ARTI-
CLE TWENTY-TWO OF THIS CHAPTER; AN ESTATE OR TRUST IS DOMICILED IN THE
STATE IF IT IS A RESIDENT ESTATE OR TRUST AS DEFINED IN PARAGRAPH THREE
OF SUBSECTION (B) OF SECTION SIX HUNDRED FIVE OF THIS CHAPTER; A BUSI-
NESS ENTITY IS DOMICILED IN THE STATE IF THE LOCATION OF THE ACTUAL SEAT
OF MANAGEMENT OR CONTROL IS IN THE STATE. IT SHALL BE PRESUMED THAT THE
DOMICILE OF A SHAREHOLDER, WITH RESPECT TO ANY MONTH, IS HIS, HER OR ITS
MAILING ADDRESS ON THE RECORDS OF THE INVESTMENT COMPANY AS OF THE LAST
DAY OF SUCH MONTH.
(II) FOR PURPOSES OF THIS SUBPARAGRAPH, THE TERM "INVESTMENT COMPANY"
SHALL MEAN A REGULATED INVESTMENT COMPANY, AS DEFINED IN SECTION 851 OF
THE INTERNAL REVENUE CODE, AND A PARTNERSHIP TO WHICH SECTION 7704(A) OF
THE INTERNAL REVENUE CODE APPLIES (BY VIRTUE OF SECTION 7704(C)(3) OF
SUCH CODE) AND WHICH MEETS THE REQUIREMENTS OF SECTION 851(B) OF SUCH
CODE. THE PRECEDING SENTENCE SHALL BE APPLIED TO THE TAXABLE YEAR FOR
FEDERAL INCOME TAX PURPOSES OF THE BUSINESS ENTITY WHICH IS ASSERTED TO
CONSTITUTE AN INVESTMENT COMPANY WHICH ENDS WITHIN THE TAXABLE YEAR OF
THE TAXPAYER.
(III) FOR PURPOSES OF THIS SUBPARAGRAPH, THE TERM "RECEIPTS FROM AN
INVESTMENT COMPANY" INCLUDES AMOUNTS RECEIVED DIRECTLY FROM AN INVEST-
MENT COMPANY AS WELL AS AMOUNTS RECEIVED FROM THE SHAREHOLDERS IN SUCH
INVESTMENT COMPANY, IN THEIR CAPACITY AS SUCH.
(IV) FOR PURPOSES OF THIS SUBPARAGRAPH, THE TERM "MANAGEMENT SERVICES"
MEANS THE RENDERING OF INVESTMENT ADVICE TO AN INVESTMENT COMPANY,
S. 3456 43
MAKING DETERMINATIONS AS TO WHEN SALES AND PURCHASES OF SECURITIES ARE
TO BE MADE ON BEHALF OF AN INVESTMENT COMPANY, OR THE SELLING OR
PURCHASING OF SECURITIES CONSTITUTING ASSETS OF AN INVESTMENT COMPANY,
AND RELATED ACTIVITIES, BUT ONLY WHERE SUCH ACTIVITY OR ACTIVITIES ARE
PERFORMED PURSUANT TO A CONTRACT WITH THE INVESTMENT COMPANY ENTERED
INTO PURSUANT TO SECTION 15(A) OF THE FEDERAL INVESTMENT COMPANY ACT OF
NINETEEN HUNDRED FORTY, AS AMENDED.
(V) FOR PURPOSES OF THIS SUBPARAGRAPH, THE TERM "DISTRIBUTION
SERVICES" MEANS THE SERVICES OF ADVERTISING, SERVICING INVESTOR ACCOUNTS
(INCLUDING REDEMPTIONS), MARKETING SHARES OR SELLING SHARES OF AN
INVESTMENT COMPANY, BUT, IN THE CASE OF ADVERTISING, SERVICING INVESTOR
ACCOUNTS (INCLUDING REDEMPTIONS) OR MARKETING SHARES, ONLY WHERE SUCH
SERVICE IS PERFORMED BY A PERSON WHO IS (OR WAS, IN THE CASE OF A CLOSED
END COMPANY) ALSO ENGAGED IN THE SERVICE OF SELLING SUCH SHARES. IN THE
CASE OF AN OPEN END COMPANY, SUCH SERVICE OF SELLING SHARES MUST BE
PERFORMED PURSUANT TO A CONTRACT ENTERED INTO PURSUANT TO SECTION 15(B)
OF THE FEDERAL INVESTMENT COMPANY ACT OF NINETEEN HUNDRED FORTY, AS
AMENDED.
(VI) FOR PURPOSES OF THIS SUBPARAGRAPH, THE TERM "ADMINISTRATION
SERVICES" INCLUDES CLERICAL, ACCOUNTING, BOOKKEEPING, DATA PROCESSING,
INTERNAL AUDITING, LEGAL AND TAX SERVICES PERFORMED FOR AN INVESTMENT
COMPANY BUT ONLY IF THE PROVIDER OF SUCH SERVICE OR SERVICES DURING THE
TAXABLE YEAR IN WHICH SUCH SERVICE OR SERVICES ARE SOLD ALSO SELLS
MANAGEMENT OR DISTRIBUTION SERVICES, AS DEFINED IN ITEM (V) OF THIS
CLAUSE, TO SUCH INVESTMENT COMPANY.
(H) ALL RECEIPTS FROM THE PERFORMANCE OF SERVICES NOT DESCRIBED IN
THIS CLAUSE ARE EARNED WITHIN THE STATE IF THE SERVICES ARE PERFORMED IN
THE STATE. WHEN A SERVICE IS PERFORMED BOTH WITHIN AND WITHOUT THE
STATE, THE RECEIPTS SHALL BE ALLOCATED WITHIN AND WITHOUT THE STATE IN
ACCORDANCE WITH RULES AND REGULATIONS OF THE TAX COMMISSION.
(I) ALL OTHER RECEIPTS NOT DESCRIBED IN SUBPARAGRAPHS (B) THROUGH (H)
OF THIS PARAGRAPH SHALL BE ATTRIBUTABLE WITHIN AND WITHOUT THE STATE IN
ACCORDANCE WITH RULES AND REGULATIONS ISSUED BY THE COMMISSIONER.
(3) THE TAXPAYER SHALL ASCERTAIN THE PERCENTAGE WHICH THE AVERAGE
VALUE OF DEPOSITS MAINTAINED AT BRANCHES WITHIN THE STATE DURING THE
TAXABLE YEAR, BEARS TO THE AVERAGE VALUE OF ALL THE TAXPAYER'S DEPOSITS
MAINTAINED AT BRANCHES WITHIN AND WITHOUT THE STATE DURING THE TAXABLE
YEAR.
(4) EACH PERCENTAGE COMPUTED PURSUANT TO THIS SUBSECTION SHALL BE
COMPUTED ON A CASH OR ACCRUAL BASIS ACCORDING TO THE METHOD OF ACCOUNT-
ING USED FOR THE TAXABLE YEAR. THE RECEIPTS PERCENTAGE SHALL INCLUDE
ONLY RECEIPTS WHICH ARE INCLUDED IN ALTERNATIVE ENTIRE NET INCOME FOR
THE TAXABLE YEAR. THE DEPOSITS AND PAYROLL PERCENTAGES SHALL INCLUDE
ONLY DEPOSITS AND PAYROLL THE EXPENSES OF WHICH ARE INCLUDED IN THE
COMPUTATION OF ALTERNATIVE ENTIRE NET INCOME FOR THE TAXABLE YEAR.
(5) FOR PURPOSES OF THIS SECTION:
(A) THE TERM "BONA FIDE OFFICE" MEANS AN OFFICE AT WHICH THE TAXPAYER
CARRIES ON ITS BUSINESS IN A REGULAR AND SYSTEMATIC MANNER AND WHICH IS
CONTINUOUSLY MAINTAINED, OCCUPIED AND USED BY EMPLOYEES OF THE TAXPAYER.
(B) THE TERM "BRANCH" MEANS A BONA FIDE OFFICE WHICH IS USED BY THE
TAXPAYER ON A REGULAR AND SYSTEMATIC BASIS TO (I) APPROVE LOANS (REGARD-
LESS OF WHETHER THE APPROVAL OF CERTAIN CLASSES OF LOANS REQUIRES REVIEW
OR FINAL APPROVAL BY ANOTHER OFFICE OF THE TAXPAYER), (II) ACCEPT LOAN
REPAYMENTS, (III) DISBURSE FUNDS, AND (IV) CONDUCT ONE OR MORE OTHER
FUNCTIONS OF A BANKING BUSINESS.
S. 3456 44
(6) IF IT SHALL APPEAR TO THE TAX COMMISSION THAT THE ALLOCATION
PERCENTAGE DETERMINED IN SUBSECTION (B), (C), OR (D) OF THIS SECTION
DOES NOT PROPERLY REFLECT THE ACTIVITY, BUSINESS, INCOME OR ASSETS OF A
TAXPAYER WITHIN THE STATE, THE TAX COMMISSION SHALL BE AUTHORIZED IN ITS
DISCRETION TO ADJUST IT BY (1) EXCLUDING ONE OR MORE OF THE FACTORS
THEREIN, (2) INCLUDING ONE OR MORE OTHER FACTORS, OR (3) ANY OTHER SIMI-
LAR OR DIFFERENT METHOD CALCULATED TO EFFECT A FAIR AND PROPER ALLO-
CATION OF THE INCOME OR ASSETS REASONABLY ATTRIBUTABLE TO THE STATE.
(7) THE TAX COMMISSION FROM TIME TO TIME SHALL PUBLISH ALL RULINGS OF
GENERAL PUBLIC INTEREST WITH RESPECT TO ANY APPLICATION OF THE
PROVISIONS OF PARAGRAPH SIX OF THIS SUBSECTION.
(B) ALLOCATION OF ENTIRE NET INCOME.
(1) IF A TAXPAYER'S ENTIRE NET INCOME IS DERIVED FROM BUSINESS CARRIED
ON BOTH WITHIN AND WITHOUT THE STATE, THE PORTION THEREOF WHICH IS
DERIVED FROM BUSINESS CARRIED ON WITHIN THE STATE SHALL BE DETERMINED BY
MULTIPLYING ITS ENTIRE NET INCOME BY THE INCOME ALLOCATION PERCENTAGE
DETERMINED AS FOLLOWS: ADD THE PERCENTAGES ASCERTAINED UNDER PARAGRAPHS
ONE, TWO AND THREE OF SUBSECTION (A) OF THIS SECTION, PLUS, IN THE CASE
OF A TAXPAYER OTHER THAN A NEW YORK S CORPORATION, AN ADDITIONAL
PERCENTAGE EQUAL TO THE RECEIPTS PERCENTAGE ASCERTAINED UNDER PARAGRAPH
TWO OF SUCH SUBSECTION AND AN ADDITIONAL PERCENTAGE EQUAL TO THE DEPOS-
ITS PERCENTAGE ASCERTAINED UNDER PARAGRAPH THREE OF SUCH SUBSECTION, AND
DIVIDE THE RESULT BY THE NUMBER OF PERCENTAGES SO ADDED TOGETHER.
(1-A) NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH ONE OF THIS
SUBSECTION, EACH BANKING CORPORATION DESCRIBED IN PARAGRAPH NINE OF
SUBSECTION (A) OF SECTION FOURTEEN HUNDRED FIFTY-TWO OF THIS ARTICLE
SUBJECT TO THE TAX IMPOSED BY THIS ARTICLE THAT SUBSTANTIALLY PROVIDES
MANAGEMENT, ADMINISTRATIVE OR DISTRIBUTION SERVICES TO AN INVESTMENT
COMPANY, AS SUCH TERMS ARE DEFINED IN SUBPARAGRAPH (G) OF PARAGRAPH TWO
OF SUBSECTION (A) OF THIS SECTION, SHALL DETERMINE THE PORTION OF ITS
ENTIRE NET INCOME DERIVED FROM BUSINESS CARRIED ON WITHIN THE STATE BY
MULTIPLYING SUCH INCOME BY AN INCOME ALLOCATION PERCENTAGE OBTAINED AS
FOLLOWS:
(A) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND SIX AND BEFORE THE FIRST DAY OF JANUARY, TWO THOUSAND SEVEN, BY
ADDING THE FOLLOWING PERCENTAGES:
(I) THE PRODUCT OF SEVENTEEN PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH ONE OF SUBSECTION (A) OF THIS SECTION,
(II) THE PRODUCT OF FIFTY PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH TWO OF SUBSECTION (A) OF THIS SECTION, AND
(III) THE PRODUCT OF THIRTY-THREE PERCENT AND THE PERCENTAGE DETER-
MINED UNDER PARAGRAPH THREE OF SUBSECTION (A) OF THIS SECTION.
(B) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND SEVEN AND BEFORE THE FIRST DAY OF JANUARY, TWO THOUSAND EIGHT, BY
ADDING THE FOLLOWING PERCENTAGES:
(I) THE PRODUCT OF TEN PERCENT AND THE PERCENTAGE DETERMINED UNDER
PARAGRAPH ONE OF SUBSECTION (A) OF THIS SECTION,
(II) THE PRODUCT OF SEVENTY PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH TWO OF SUBSECTION (A) OF THIS SECTION, AND
(III) THE PRODUCT OF TWENTY PERCENT AND THE PERCENTAGE DETERMINED
UNDER PARAGRAPH THREE OF SUBSECTION (A) OF THIS SECTION.
(C) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND EIGHT, BY THE PERCENTAGE ASCERTAINED UNDER PARAGRAPH TWO OF
SUBSECTION (A) OF THIS SECTION.
(2) (A) IN LIEU OF THE MODIFICATION PROVIDED FOR IN SUBSECTION (F) OF
SECTION FOURTEEN HUNDRED FIFTY-THREE OF THIS ARTICLE, (RELATING TO A
S. 3456 45
MODIFICATION FOR THE ADJUSTED ELIGIBLE NET INCOME OF AN INTERNATIONAL
BANKING FACILITY), A TAXPAYER MAY, IN THE MANNER PRESCRIBED BY THE TAX
COMMISSION, ELECT TO MODIFY ON AN ANNUAL BASIS ITS INCOME ALLOCATION
PERCENTAGE IN THE MANNER DESCRIBED IN CLAUSES (I), (II) AND (III) OF
THIS SUBPARAGRAPH:
(I) WAGES, SALARIES AND OTHER PERSONAL SERVICE COMPENSATION PROPERLY
ATTRIBUTABLE TO THE PRODUCTION OF ELIGIBLE GROSS INCOME OF THE TAX-
PAYER'S INTERNATIONAL BANKING FACILITY SHALL NOT BE INCLUDED IN THE
COMPUTATION OF WAGES, SALARIES AND OTHER PERSONAL SERVICE COMPENSATION
OF EMPLOYEES WITHIN THE STATE,
(II) RECEIPTS PROPERLY ATTRIBUTABLE TO THE PRODUCTION OF ELIGIBLE
GROSS INCOME OF THE TAXPAYER'S INTERNATIONAL BANKING FACILITY SHALL NOT
BE INCLUDED IN THE COMPUTATION OF RECEIPTS WITHIN THE STATE, AND
(III) DEPOSITS FROM FOREIGN PERSONS WHICH ARE PROPERLY ATTRIBUTABLE TO
THE PRODUCTION OF ELIGIBLE GROSS INCOME OF THE TAXPAYER'S INTERNATIONAL
BANKING FACILITY SHALL NOT BE INCLUDED IN THE COMPUTATION OF DEPOSITS
MAINTAINED AT BRANCHES WITHIN THE STATE.
(B) FOR PURPOSES OF THIS PARAGRAPH, THE TERM "ELIGIBLE GROSS INCOME"
REFERS TO SUCH TERM AS SET OUT IN SUBSECTION (F) OF SECTION FOURTEEN
HUNDRED FIFTY-THREE OF THIS ARTICLE EXCEPT THAT THE TERM "FOREIGN
PERSON" AS DEFINED IN PARAGRAPH EIGHT OF SUCH SUBSECTION (F) SHALL NOT
INCLUDE A FOREIGN BRANCH OF THE TAXPAYER AND IN NO EVENT SHALL TRANS-
ACTIONS BETWEEN THE TAXPAYER'S INTERNATIONAL BANKING FACILITY AND ITS
FOREIGN BRANCHES BE CONSIDERED.
(C) ALLOCATION OF ALTERNATIVE ENTIRE NET INCOME. IF A TAXPAYER'S
ALTERNATIVE ENTIRE NET INCOME IS DERIVED FROM BUSINESS CARRIED ON BOTH
WITHIN AND WITHOUT THE STATE, THE PORTION THEREOF WHICH IS DERIVED FROM
BUSINESS CARRIED ON WITHIN THE STATE SHALL BE DETERMINED BY MULTIPLYING
ITS ALTERNATIVE ENTIRE NET INCOME BY THE ALTERNATIVE ENTIRE NET INCOME
ALLOCATION PERCENTAGE DETERMINED AS FOLLOWS:
(1) RECOMPUTE THE PAYROLL PERCENTAGE UNDER PARAGRAPH ONE OF SUBSECTION
(A) OF THIS SECTION WITHOUT GIVING CONSIDERATION TO THE PHRASE "EIGHTY
PERCENT OF," ADD TO THE RESULTING PERCENTAGE THE PERCENTAGES ASCERTAINED
UNDER PARAGRAPHS TWO AND THREE OF SUCH SUBSECTION, AND DIVIDE THE RESULT
BY THE NUMBER OF PERCENTAGES SO ADDED TOGETHER.
(2) WHEN AN ELECTION HAS BEEN MADE PURSUANT TO PARAGRAPH TWO OF
SUBSECTION (B) OF THIS SECTION (RELATING TO INTERNATIONAL BANKING FACIL-
ITIES) THE TAXPAYER SHALL MAKE THE MODIFICATIONS DESCRIBED IN SUCH PARA-
GRAPH FOR PURPOSES OF ITS ALTERNATIVE ENTIRE NET INCOME ALLOCATION
PERCENTAGE.
(3) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND SIX, EACH BANKING CORPORATION DESCRIBED IN PARAGRAPH NINE OF
SUBSECTION (A) OF SECTION FOURTEEN HUNDRED FIFTY-TWO OF THIS ARTICLE
SUBJECT TO THE TAX IMPOSED BY THIS ARTICLE THAT SUBSTANTIALLY PROVIDES
MANAGEMENT, ADMINISTRATIVE OR DISTRIBUTION SERVICES TO AN INVESTMENT
COMPANY, AS SUCH TERMS ARE DEFINED IN SUBPARAGRAPH (G) OF PARAGRAPH TWO
OF SUBSECTION (A) OF THIS SECTION, SHALL DETERMINE THE PORTION OF ITS
ALTERNATIVE ENTIRE NET INCOME DERIVED FROM BUSINESS CARRIED ON WITHIN
THE STATE BY MULTIPLYING SUCH INCOME BY THE PERCENTAGE ASCERTAINED FOR
THE TAXABLE YEAR UNDER PARAGRAPH ONE-A OF SUBSECTION (B) OF THIS
SECTION, EXCEPT THAT IN COMPUTING SUCH PERCENTAGE (A) FOR TAXABLE YEARS
BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND EIGHT, NO CONSIDERATION
SHALL BE GIVEN TO THE PHRASE "EIGHTY PERCENT OF" IN PARAGRAPH ONE OF
SUBSECTION (A) OF THIS SECTION, (B) FOR TAXABLE YEARS BEGINNING BEFORE
JANUARY FIRST, TWO THOUSAND EIGHT, WHEN AN ELECTION HAS BEEN MADE PURSU-
ANT TO PARAGRAPH TWO OF SUBSECTION (B) OF THIS SECTION (RELATING TO AN
S. 3456 46
INTERNATIONAL BANKING FACILITY) THE TAXPAYER SHALL MAKE THE MODIFICA-
TIONS DESCRIBED IN SUCH PARAGRAPH, AND (C) FOR TAXABLE YEARS BEGINNING
ON OR AFTER JANUARY FIRST, TWO THOUSAND EIGHT, WHEN AN ELECTION HAS BEEN
MADE PURSUANT TO PARAGRAPH TWO OF SUBSECTION (B) OF THIS SECTION (RELAT-
ING TO AN INTERNATIONAL BANKING FACILITY) THE TAXPAYER SHALL MAKE THE
MODIFICATIONS DESCRIBED IN CLAUSE (II) OF SUBPARAGRAPH (A) OF SUCH PARA-
GRAPH.
(D) ALLOCATION OF TAXABLE ASSETS. IF THE TAXPAYER'S TAXABLE ASSETS ARE
DERIVED FROM BUSINESS CARRIED ON BOTH WITHIN AND WITHOUT THE STATE, THE
PORTION THEREOF WHICH IS DERIVED FROM BUSINESS CARRIED ON WITHIN THE
STATE SHALL BE DETERMINED BY MULTIPLYING ITS TAXABLE ASSETS BY AN ASSET
ALLOCATION PERCENTAGE DETERMINED IN THE SAME MANNER AS THE INCOME ALLO-
CATION PERCENTAGE UNDER SUBSECTION (B) OF THIS SECTION, DETERMINED AS IF
THE ELECTION PROVIDED FOR IN PARAGRAPH TWO OF SUCH SUBSECTION HAS BEEN
MADE, EXCEPT THAT THE MODIFICATIONS DESCRIBED IN CLAUSES (I), (II) AND
(III) OF SUBPARAGRAPH (A) OF SUCH PARAGRAPH SHALL NOT BE MADE.
§ 1455. COMPUTATION OF TAX. THE TAX IMPOSED BY SECTION FOURTEEN
HUNDRED FIFTY-ONE OF THIS ARTICLE SHALL BE, IN THE CASE OF EACH TAXPAYER
OTHER THAN A NEW YORK S CORPORATION, THE GREATER OF THE FOLLOWING COMPU-
TATIONS:
(A) BASIC TAX. FOR TAXABLE YEARS BEGINNING BEFORE JULY FIRST, TWO
THOUSAND, NINE PERCENT OF THE TAXPAYER'S ENTIRE NET INCOME, OR THE
PORTION THEREOF ALLOCATED TO THIS STATE, FOR THE TAXABLE YEAR, OR PART
THEREOF. FOR TAXABLE YEARS BEGINNING AFTER JUNE THIRTIETH, TWO THOUSAND
AND BEFORE JULY FIRST, TWO THOUSAND ONE, EIGHT AND ONE-HALF PERCENT OF
THE TAXPAYER'S ENTIRE NET INCOME, OR PORTION THEREOF ALLOCATED TO THIS
STATE, FOR THE TAXABLE YEAR, OR PART THEREOF. FOR TAXABLE YEARS BEGIN-
NING AFTER JUNE THIRTIETH, TWO THOUSAND ONE AND BEFORE JULY FIRST, TWO
THOUSAND TWO, EIGHT PERCENT OF THE TAXPAYER'S ENTIRE NET INCOME, OR
PORTION THEREOF ALLOCATED TO THIS STATE, FOR THE TAXABLE YEAR, OR PART
THEREOF. FOR TAXABLE YEARS BEGINNING AFTER JUNE THIRTIETH, TWO THOUSAND
TWO AND BEFORE JANUARY FIRST, TWO THOUSAND SEVEN, SEVEN AND ONE-HALF
PERCENT OF THE TAXPAYER'S ENTIRE NET INCOME, OR PORTION THEREOF ALLO-
CATED TO THIS STATE, FOR THE TAXABLE YEAR, OR PART THEREOF. FOR TAXABLE
YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND SEVEN, SEVEN AND
ONE-TENTH PERCENT OF THE TAXPAYER'S ENTIRE NET INCOME, OR THE PORTION
THEREOF ALLOCATED TO THIS STATE, FOR THE TAXABLE YEAR, OR PART THEREOF.
(B) ALTERNATIVE MINIMUM TAX. IF THE TAX UNDER SUBSECTION (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 IN THE CASE OF A TAXPAYER DESCRIBED IN CLAUSE (II),
(III), OR (IV) OF THIS PARAGRAPH, ONE-TENTH OF A MILL UPON EACH DOLLAR
OF TAXABLE ASSETS, OR THE PORTION THEREOF ALLOCATED TO THIS STATE.
(II) IN THE CASE OF A TAXPAYER WHOSE NET WORTH RATIO IS LESS THAN FIVE
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 THEREOF
ALLOCATED TO THIS STATE.
(III) 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 THIS STATE.
(IV) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, NINETEEN
HUNDRED EIGHTY-FIVE, 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
S. 3456 47
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.
(V) FOR THE PURPOSES OF THIS ARTICLE:
(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 FEDER-
AL 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 HOUS-
ING ACT, AS AMENDED. TOTAL ASSETS ARE THOSE ASSETS WHICH ARE PROPERLY
REFLECTED ON A BALANCE SHEET THE INCOME OR EXPENSES OF WHICH ARE PROPER-
LY REFLECTED (OR WOULD HAVE BEEN PROPERLY REFLECTED IF NOT FULLY DEPRE-
CIATED 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 INTERNA-
TIONAL BANKING FACILITY FOR THE TAXABLE YEAR.
(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-
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) THREE PERCENT OF THE TAXPAYER'S ALTERNATIVE ENTIRE NET INCOME, OR
PORTION THEREOF ALLOCATED TO THIS STATE, FOR THE TAXABLE YEAR, OR PART
THEREOF.
(3) TWO HUNDRED FIFTY DOLLARS.
(C) NEW YORK S CORPORATIONS. (1) GENERAL. IN THE CASE OF A NEW YORK S
CORPORATION, THE TAX IMPOSED BY SECTION FOURTEEN HUNDRED FIFTY-ONE OF
THIS ARTICLE SHALL BE THE HIGHER OF (I) THE AMOUNT PRESCRIBED IN
S. 3456 48
SUBSECTION (A) OF THIS SECTION REDUCED BY THE ARTICLE TWENTY-TWO TAX
EQUIVALENT OR (II) THE AMOUNT PRESCRIBED IN PARAGRAPH THREE OF
SUBSECTION (B) OF THIS SECTION.
(2) THE ARTICLE TWENTY-TWO TAX EQUIVALENT IS THE AMOUNT COMPUTED UNDER
SUBSECTION (A) OF THIS SECTION BY SUBSTITUTING FOR THE RATE THEREIN THE
RATE OF 7.875 PERCENT.
(3) TERMINATION YEAR. IN THE CASE OF A TERMINATION YEAR, THE TAX FOR
THE S SHORT YEAR SHALL BE COMPUTED UNDER PARAGRAPH ONE OF THIS
SUBSECTION WITHOUT REGARD TO THE AMOUNT PRESCRIBED IN PARAGRAPH THREE OF
SUBSECTION (B) OF THIS SECTION, AND THE TAX FOR THE C SHORT YEAR SHALL
BE THE LARGER OF THE TAXES COMPUTED UNDER SUBSECTION (A) OF THIS SECTION
OR PARAGRAPH ONE OR TWO OF SUBSECTION (B) OF THIS SECTION, BUT IN NO
EVENT SHALL THE SUM OF THE TAX FOR THE S SHORT YEAR AND THE TAX FOR THE
C SHORT YEAR BE LESS THAN THE TAX PRESCRIBED IN PARAGRAPH THREE OF
SUBSECTION (B) OF THIS SECTION.
§ 1455-A. TAX SURCHARGE. (A) IN ADDITION TO THE TAX IMPOSED UNDER
SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE, THERE IS HEREBY
IMPOSED, (1) FOR TAXABLE YEARS ENDING AFTER JUNE THIRTIETH, NINETEEN
HUNDRED EIGHTY-NINE AND BEFORE JULY FIRST, NINETEEN HUNDRED NINETY, A
TAX SURCHARGE AT THE RATE OF TWO AND ONE-HALF PERCENT OF THE TAX IMPOSED
UNDER SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE, BEFORE
DEDUCTION OF ANY CREDITS AGAINST TAX OTHERWISE ALLOWABLE UNDER THIS
ARTICLE FOR ALL OR ANY PARTS OF SUCH TAXABLE YEARS, (2) FOR TAXABLE
YEARS ENDING AFTER JUNE THIRTIETH, NINETEEN HUNDRED NINETY AND BEFORE
JULY FIRST, NINETEEN HUNDRED NINETY-FOUR, AND UNTIL SUCH RATE IS SUPER-
SEDED, A TAX SURCHARGE AT THE RATE OF FIFTEEN PERCENT OF THE TAX IMPOSED
UNDER SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE, AFTER
DEDUCTION OF ANY CREDITS AGAINST TAX OTHERWISE ALLOWABLE UNDER THIS
ARTICLE, (3) FOR TAXABLE YEARS ENDING AFTER JUNE THIRTIETH, NINETEEN
HUNDRED NINETY-FOUR AND BEFORE JULY FIRST, NINETEEN HUNDRED NINETY-FIVE,
AND UNTIL SUCH RATE IS SUPERSEDED, A TAX SURCHARGE AT THE RATE OF TEN
PERCENT OF THE TAX IMPOSED UNDER SECTION FOURTEEN HUNDRED FIFTY-ONE OF
THIS ARTICLE, AFTER DEDUCTION OF ANY CREDITS AGAINST THE TAX OTHERWISE
ALLOWABLE UNDER THIS ARTICLE, (4) FOR TAXABLE YEARS ENDING AFTER JUNE
THIRTIETH, NINETEEN HUNDRED NINETY-FIVE AND BEFORE JULY FIRST, NINETEEN
HUNDRED NINETY-SIX, AND UNTIL SUCH RATE IS SUPERSEDED, A TAX SURCHARGE
AT THE RATE OF FIVE PERCENT OF THE TAX IMPOSED UNDER SECTION FOURTEEN
HUNDRED FIFTY-ONE OF THIS ARTICLE, AFTER DEDUCTION OF ANY CREDITS
AGAINST THE TAX OTHERWISE ALLOWABLE UNDER THIS ARTICLE AND (5) FOR TAXA-
BLE YEARS ENDING AFTER JUNE THIRTIETH, NINETEEN HUNDRED NINETY-SIX AND
BEFORE JULY FIRST, NINETEEN HUNDRED NINETY-SEVEN, A TAX SURCHARGE AT THE
RATE OF ZERO PERCENT OF THE TAX IMPOSED UNDER SECTION FOURTEEN HUNDRED
FIFTY-ONE OF THIS ARTICLE, AFTER DEDUCTION OF ANY CREDITS AGAINST THE
TAX OTHERWISE ALLOWABLE UNDER THIS ARTICLE. HOWEVER, THE TAX SURCHARGE
IMPOSED BY THIS SECTION AT THE RATE OF TWO AND ONE-HALF PERCENT SHALL
NOT BE IMPOSED UPON ANY TAXPAYER FOR MORE THAN TWELVE MONTHS, THE TAX
SURCHARGE IMPOSED BY THIS SECTION AT THE RATE OF FIFTEEN PERCENT SHALL
NOT BE IMPOSED UPON ANY TAXPAYER FOR MORE THAN FORTY-EIGHT MONTHS, AND
THE TAX SURCHARGES IMPOSED BY THIS SECTION AT THE RATES OF TEN PERCENT,
FIVE PERCENT AND ZERO PERCENT SHALL NOT, RESPECTIVELY, BE IMPOSED UPON
ANY TAXPAYER FOR MORE THAN TWELVE MONTHS, AND THE COMMISSIONER SHALL
PRESCRIBE BY REGULATION OR INSTRUCTIONS A METHOD OF PRORATION DESIGNED
TO EFFECTUATE SUCH RESULT. THE CREDITS AGAINST TAX OTHERWISE ALLOWABLE
UNDER SECTION FOURTEEN HUNDRED FIFTY-SIX OF THIS ARTICLE SHALL NOT BE
ALLOWED AS A CREDIT AGAINST THE TAX SURCHARGE IMPOSED BY THIS SECTION.
S. 3456 49
(B) (1) THE PROVISIONS CONCERNING RETURNS UNDER SECTION FOURTEEN
HUNDRED SIXTY-TWO OF THIS ARTICLE SHALL BE APPLICABLE TO THIS SECTION,
EXCEPT THAT FOR PURPOSES OF AN AUTOMATIC EXTENSION FOR SIX MONTHS FOR
FILING A RETURN COVERING THE TAXES IMPOSED BY THIS ARTICLE, SUCH AUTO-
MATIC EXTENSION SHALL BE ALLOWED, FOR TAXABLE YEARS TO WHICH THE TAX
SURCHARGE IMPOSED BY THIS SECTION APPLY, ONLY IF A TAXPAYER FILES WITH
THE COMMISSIONER AN APPLICATION FOR EXTENSION IN SUCH FORM AS THE
COMMISSIONER MAY PRESCRIBE AND PAYS ON OR BEFORE THE DATE OF SUCH FILING
IN ADDITION TO ANY OTHER AMOUNTS REQUIRED UNDER THIS ARTICLE, TWO AND
ONE-HALF PERCENT, FIFTEEN PERCENT, TEN PERCENT, FIVE PERCENT OR ZERO
PERCENT, WHICHEVER IS THE RATE APPLICABLE TO THE TAXABLE YEAR PURSUANT
TO SUBSECTION (A) OF THIS SECTION, OF THE AMOUNT PROPERLY ESTIMATED AS
PROVIDED IN SUBSECTION (B) OF SECTION FOURTEEN HUNDRED SIXTY-THREE OF
THIS ARTICLE AS ITS TAX PAYABLE UNDER SECTION FOURTEEN HUNDRED FIFTY-ONE
OF THIS ARTICLE, BEFORE DEDUCTION OF ANY CREDITS AGAINST TAX OTHERWISE
ALLOWABLE UNDER SECTION FOURTEEN HUNDRED FIFTY-SIX OF THIS ARTICLE IN
THE CASE OF THE TAX SURCHARGE IMPOSED AT THE RATE OF TWO AND ONE-HALF
PERCENT, AND AFTER DEDUCTION OF ANY CREDITS AGAINST TAX OTHERWISE ALLOW-
ABLE UNDER SECTION FOURTEEN HUNDRED FIFTY-SIX OF THIS ARTICLE IN THE
CASE OF THE TAX SURCHARGE IMPOSED AT THE RATE OF FIFTEEN, TEN, FIVE OR
ZERO PERCENT. THE TAX SURCHARGE IMPOSED BY THIS SECTION SHALL BE PAYA-
BLE TO THE COMMISSIONER IN FULL AT THE TIME THE RETURN IS REQUIRED TO BE
FILED.
(2) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, ALL OF THE
PROVISIONS OF THIS ARTICLE, EXCEPT FOR SECTION FOURTEEN HUNDRED FIFTY-
FIVE-B OF THIS ARTICLE, PRESENTLY APPLICABLE ARE APPLICABLE TO THE TAX
SURCHARGE IMPOSED BY THIS SECTION WITH SUCH MODIFICATIONS AS MAY BE
NECESSARY TO ADAPT SUCH LANGUAGE TO THE TAX SURCHARGE IMPOSED BY THIS
SECTION. SUCH PROVISIONS SHALL APPLY WITH THE SAME FORCE AND EFFECT AS
IF THOSE PROVISIONS HAD BEEN SET FORTH IN FULL IN THIS SECTION EXCEPT TO
THE EXTENT THAT ANY PROVISION IS EITHER INCONSISTENT WITH A PROVISION OF
THIS SECTION OR NOT RELEVANT TO THE TAX SURCHARGE IMPOSED BY THIS
SECTION AND TO THAT END A REFERENCE IN THIS ARTICLE TO THE TAX IMPOSED
BY SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE SHALL BE READ AS A
REFERENCE TO THE TAX SURCHARGE IMPOSED BY THIS SECTION, AND TO THE SUM
OF SUCH TAX AND SUCH TAX SURCHARGE IN THE CASE OF SECTIONS FOURTEEN
HUNDRED SIXTY AND FOURTEEN HUNDRED SIXTY-ONE OF THIS ARTICLE AND SUCH
OTHER PROVISIONS REQUIRING SUCH READING IN ORDER TO EFFECTUATE THE
PURPOSES OF THIS PROVISION, UNLESS A DIFFERENT MEANING IS CLEARLY
REQUIRED.
(C) COORDINATION WITH SECTION FOURTEEN HUNDRED FIFTY-FIVE-B OF THIS
ARTICLE. THE AMOUNT OF TAX SURCHARGE IMPOSED PURSUANT TO THIS SECTION
SHALL NOT BE INCLUDED IN ANY CALCULATION OF A TAX SURCHARGE IMPOSED
PURSUANT TO SECTION FOURTEEN HUNDRED FIFTY-FIVE-B OF THIS ARTICLE.
(D) INSOFAR AS SUBSECTION (A) OF THIS SECTION ESTABLISHES A RATE OF
FIFTEEN PERCENT IN THE CASE OF TAXABLE YEARS ENDING AFTER JUNE THIRTI-
ETH, NINETEEN HUNDRED NINETY AND BEFORE JULY FIRST, NINETEEN HUNDRED
NINETY-FOUR AND UNTIL SUCH RATE IS SUPERSEDED, A RATE OF TEN PERCENT IN
THE CASE OF TAXABLE YEARS ENDING AFTER JUNE THIRTIETH, NINETEEN HUNDRED
NINETY-FOUR AND BEFORE JULY FIRST, NINETEEN HUNDRED NINETY-FIVE AND
UNTIL SUCH RATE IS SUPERSEDED, A RATE OF FIVE PERCENT IN THE CASE OF
TAXABLE YEARS ENDING AFTER JUNE THIRTIETH, NINETEEN HUNDRED NINETY-FIVE
AND BEFORE JULY FIRST, NINETEEN HUNDRED NINETY-SIX AND UNTIL SUCH RATE
IS SUPERSEDED, AND A RATE OF ZERO PERCENT IN THE CASE OF TAXABLE YEARS
ENDING AFTER JUNE THIRTIETH, NINETEEN HUNDRED NINETY-SIX AND BEFORE JULY
FIRST, NINETEEN HUNDRED NINETY-SEVEN, THE TRANSITION FROM SUCH RATE OF
S. 3456 50
FIFTEEN PERCENT TO SUCH RATE OF TEN PERCENT, FROM SUCH RATE OF TEN
PERCENT TO SUCH RATE OF FIVE PERCENT, AND FROM SUCH RATE OF FIVE PERCENT
TO SUCH RATE OF ZERO PERCENT, SHALL BE DEEMED TO OCCUR, RESPECTIVELY, ON
THE FIRST DAY OF THE SEVENTH MONTH OF EACH OF SUCH TAXABLE YEARS, WITH
THE RESULT THAT FOR PURPOSES OF IMPLEMENTATION OF SUCH CHANGES IN RATES,
AND NOTWITHSTANDING SUCH SUBSECTION (A), THERE IS HEREBY IMPOSED WITH
RESPECT TO ALL TAXABLE YEARS ENDING AFTER JUNE THIRTIETH, NINETEEN
HUNDRED NINETY-FOUR AND BEFORE JULY FIRST, NINETEEN HUNDRED NINETY-FIVE,
INCLUDING TAXABLE YEARS OF FEWER THAN TWELVE MONTHS, A TAX SURCHARGE AT
THE RATE OF TWELVE AND ONE-HALF PERCENT; THERE IS HEREBY IMPOSED WITH
RESPECT TO ALL TAXABLE YEARS ENDING AFTER JUNE THIRTIETH, NINETEEN
HUNDRED NINETY-FIVE AND BEFORE JULY FIRST, NINETEEN HUNDRED NINETY-SIX,
INCLUDING TAXABLE YEARS OF FEWER THAN TWELVE MONTHS, A TAX SURCHARGE AT
THE RATE OF SEVEN AND ONE-HALF PERCENT; AND THERE IS HEREBY IMPOSED WITH
RESPECT TO ALL TAXABLE YEARS ENDING AFTER JUNE THIRTIETH, NINETEEN
HUNDRED NINETY-SIX AND BEFORE JULY FIRST, NINETEEN HUNDRED NINETY-SEVEN,
INCLUDING TAXABLE YEARS OF FEWER THAN TWELVE MONTHS, A TAX SURCHARGE AT
THE RATE OF TWO AND ONE-HALF PERCENT. IN ADDITION, FOR PURPOSES OF
IMPLEMENTATION OF ALL THE PROVISIONS OF THIS SECTION REFERENCES TO TEN
PERCENT SHALL BE READ AS REFERENCES TO TWELVE AND ONE-HALF PERCENT,
REFERENCES TO FIVE PERCENT SHALL BE READ AS REFERENCES TO SEVEN AND
ONE-HALF PERCENT AND REFERENCES TO ZERO PERCENT SHALL BE READ AS REFER-
ENCES TO TWO AND ONE-HALF PERCENT.
§ 1455-B. TEMPORARY METROPOLITAN TRANSPORTATION BUSINESS TAX SURCHARGE
ON BANKS. (A) FOR THE PRIVILEGE OF EXERCISING ITS FRANCHISE OR DOING
BUSINESS IN THE METROPOLITAN COMMUTER TRANSPORTATION DISTRICT IN A
CORPORATE OR ORGANIZED CAPACITY, THERE IS HEREBY IMPOSED ON EVERY
TAXPAYER SUBJECT TO TAX UNDER THIS ARTICLE, OTHER THAN A NEW YORK S
CORPORATION, FOR THE TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST,
NINETEEN HUNDRED EIGHTY-TWO BUT ENDING BEFORE DECEMBER THIRTY-FIRST, TWO
THOUSAND NINETEEN, A TAX SURCHARGE, IN ADDITION TO THE TAX IMPOSED UNDER
SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE, AT THE RATE OF EIGH-
TEEN PERCENT OF THE TAX IMPOSED UNDER SUCH SECTION FOURTEEN HUNDRED
FIFTY-ONE OF THIS ARTICLE, FOR SUCH TAXABLE YEARS OR ANY PART OF SUCH
TAXABLE YEARS ENDING BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED
EIGHTY-THREE AFTER THE DEDUCTION OF ANY CREDITS OTHERWISE ALLOWABLE
UNDER THIS ARTICLE, AND AT THE RATE OF SEVENTEEN PERCENT OF THE TAX
IMPOSED UNDER SUCH SECTION FOR SUCH TAXABLE YEARS OR ANY PART OF SUCH
TAXABLE YEARS ENDING ON OR AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED
EIGHTY-THREE AFTER THE DEDUCTION OF ANY CREDITS OTHERWISE ALLOWABLE
UNDER THIS ARTICLE; PROVIDED HOWEVER, THAT SUCH RATES OF TAX SURCHARGE
SHALL BE APPLIED ONLY TO THAT PORTION OF THE TAX IMPOSED UNDER SECTION
FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE AFTER THE DEDUCTION OF ANY
CREDITS OTHERWISE ALLOWABLE UNDER THIS ARTICLE WHICH IS ATTRIBUTABLE TO
THE TAXPAYER'S BUSINESS ACTIVITY CARRIED ON WITHIN THE METROPOLITAN
COMMUTER TRANSPORTATION DISTRICT; AND PROVIDED, FURTHER, THAT THE TAX
SURCHARGE IMPOSED BY THIS SECTION SHALL NOT BE IMPOSED UPON ANY TAXPAYER
FOR MORE THAN FOUR HUNDRED THIRTY-TWO MONTHS. PROVIDED HOWEVER, THAT FOR
TAXABLE YEARS COMMENCING ON OR AFTER JULY FIRST, TWO THOUSAND, SUCH
SURCHARGE SHALL BE CALCULATED AS IF THE RATE OF THE BASIC TAX COMPUTED
UNDER SUBSECTION (A) OF SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS
ARTICLE WAS NINE PERCENT.
(B) IF THE TAX IMPOSED UNDER SECTION FOURTEEN HUNDRED FIFTY-ONE OF
THIS ARTICLE IS DERIVED FROM BUSINESS ACTIVITY CARRIED ON BOTH WITHIN
AND WITHOUT THE METROPOLITAN COMMUTER TRANSPORTATION DISTRICT, THE
PORTION OF THE TAX ATTRIBUTABLE TO BUSINESS ACTIVITY CARRIED ON IN THE
S. 3456 51
METROPOLITAN COMMUTER TRANSPORTATION DISTRICT SHALL BE DETERMINED IN
ACCORDANCE WITH RULES AND REGULATIONS PROMULGATED BY THE TAX COMMISSION.
(C) THE PROVISIONS CONCERNING RETURNS UNDER SECTION FOURTEEN HUNDRED
SIXTY-TWO OF THIS ARTICLE SHALL BE APPLICABLE TO THIS SECTION, EXCEPT
THAT FOR PURPOSES OF AN AUTOMATIC EXTENSION FOR SIX MONTHS FOR FILING A
RETURN COVERING THE TAX SURCHARGE IMPOSED BY THIS SECTION, SUCH AUTOMAT-
IC EXTENSION SHALL BE ALLOWED ONLY IF A TAXPAYER FILES WITH THE COMMIS-
SIONER AN APPLICATION FOR EXTENSION IN SUCH FORM AS SAID COMMISSIONER
MAY PRESCRIBE BY REGULATION AND PAYS ON OR BEFORE THE DATE OF SUCH
FILING IN ADDITION TO ANY OTHER AMOUNTS REQUIRED UNDER THIS ARTICLE,
EITHER NINETY PERCENT OF THE ENTIRE TAX SURCHARGE REQUIRED TO BE PAID
UNDER THIS SECTION FOR THE APPLICABLE PERIOD, OR NOT LESS THAN THE TAX
SURCHARGE SHOWN ON THE TAXPAYER'S RETURN FOR THE PRECEDING TAXABLE YEAR,
IF SUCH PRECEDING TAXABLE YEAR WAS A TAXABLE YEAR OF TWELVE MONTHS. THE
TAX SURCHARGE IMPOSED BY THIS SECTION SHALL BE PAYABLE TO THE COMMIS-
SIONER IN FULL AT THE TIME THE RETURN IS REQUIRED TO BE FILED, AND SUCH
TAX SURCHARGE OR THE BALANCE THEREOF, IMPOSED ON ANY TAXPAYER WHICH
CEASES TO EXERCISE ITS FRANCHISE OR BE SUBJECT TO THE TAX SURCHARGE
IMPOSED BY THIS SECTION SHALL BE PAYABLE TO THE COMMISSIONER AT THE TIME
THE RETURN IS REQUIRED TO BE FILED, PROVIDED SUCH TAX SURCHARGE OF A
DOMESTIC CORPORATION WHICH CONTINUES TO POSSESS ITS FRANCHISE SHALL BE
SUBJECT TO ADJUSTMENT AS THE CIRCUMSTANCES MAY REQUIRE; ALL OTHER TAX
SURCHARGES OF ANY SUCH TAXPAYER, WHICH PURSUANT TO THE FOREGOING
PROVISIONS OF THIS SECTION WOULD OTHERWISE BE PAYABLE SUBSEQUENT TO THE
TIME SUCH RETURN IS REQUIRED TO BE FILED, SHALL NEVERTHELESS BE PAYABLE
AT SUCH TIME. ALL OF THE PROVISIONS OF THIS ARTICLE PRESENTLY APPLICABLE
ARE APPLICABLE TO THE TAX SURCHARGE IMPOSED BY THIS SECTION.
(D) NOTWITHSTANDING ANY CONTRARY PROVISIONS OF STATE OR LOCAL LAW, THE
TAX SURCHARGE IMPOSED UNDER THIS SECTION SHALL NOT BE ALLOWED AS A
DEDUCTION IN THE COMPUTATION OF ANY STATE OR LOCAL TAX IMPOSED UNDER
THIS CHAPTER OR ANY CHAPTER OR LOCAL LAW. FURTHERMORE, THE CREDITS
OTHERWISE ALLOWABLE UNDER THIS ARTICLE SHALL NOT BE ALLOWED AGAINST THE
TAX SURCHARGE IMPOSED BY THIS SECTION.
(E) THE TERM METROPOLITAN COMMUTER TRANSPORTATION DISTRICT AS USED IN
THIS SECTION SHALL BE DEFINED PURSUANT TO SECTION TWELVE HUNDRED SIXTY-
TWO OF THE PUBLIC AUTHORITIES LAW.
§ 1456. CREDITS. (A) CREDIT FOR SERVICING CERTAIN MORTGAGES. EVERY
BANK, AS DEFINED IN SECTION TWO THOUSAND FOUR HUNDRED TWO OF THE PUBLIC
AUTHORITIES LAW, WHICH SHALL HAVE ENTERED INTO A CONTRACT WITH THE STATE
OF NEW YORK MORTGAGE AGENCY TO SERVICE MORTGAGES ACQUIRED BY SUCH AGENCY
PURSUANT TO THE STATE OF NEW YORK MORTGAGE AGENCY ACT, SHALL HAVE CRED-
ITED TO IT ANNUALLY TO APPLY UPON OR IN LIEU OF THE PAYMENT OF ANY TAX
TO WHICH IT MAY BE SUBJECT UNDER THIS ARTICLE AN AMOUNT EQUAL TO TWO AND
NINETY-THREE ONE HUNDREDTHS PERCENTUM OF THE TOTAL PRINCIPAL AND INTER-
EST COLLECTED BY THE BANK DURING ITS TAXABLE YEAR ON EACH SUCH MORTGAGE
SECURED BY A LIEN ON REAL ESTATE IMPROVED BY A ONE-FAMILY TO FOUR-FAMILY
RESIDENTIAL STRUCTURE AND AN AMOUNT EQUAL TO THE INTEREST COLLECTED BY
THE BANK DURING ITS TAXABLE YEAR ON EACH SUCH MORTGAGE SECURED BY A LIEN
ON REAL PROPERTY IMPROVED BY A STRUCTURE OCCUPIED AS THE RESIDENCE OF
FIVE OR MORE FAMILIES LIVING INDEPENDENTLY OF EACH OTHER, MULTIPLIED BY
A FRACTION THE DENOMINATOR OF WHICH SHALL BE THE INTEREST RATE PAYABLE
ON THE MORTGAGE (COMPUTED TO FIVE DECIMAL PLACES) AND THE NUMERATOR OF
WHICH SHALL BE .00125 IN THE CASE OF SUCH A MORTGAGE ACQUIRED BY SUCH
AGENCY FOR LESS THAN ONE MILLION DOLLARS, AND .00100 IN THE CASE OF SUCH
A MORTGAGE ACQUIRED BY SUCH AGENCY FOR ONE MILLION DOLLARS OR MORE;
PROVIDED, HOWEVER, THAT THERE SHALL IN NO CASE BE CREDITED TO ANY SUCH
S. 3456 52
BANK AN AMOUNT IN EXCESS OF THE AMOUNT DUE FROM SUCH BANK FOR TAXES
PAYABLE TO THE STATE UNDER THIS ARTICLE FOR THE TAXABLE YEAR FOR WHICH
SUCH CREDIT IS GIVEN. IN COMPUTING SUCH TAX CREDIT FOR THE SERVICING OF
MORTGAGES ON ONE-FAMILY TO FOUR-FAMILY RESIDENTIAL STRUCTURES, THE BANK
SHALL BE ENTITLED TO NO CREDIT FOR THE COLLECTION OF CURTAILMENTS OR
PAYMENTS IN DISCHARGE OF ANY SUCH MORTGAGE. FOR THE PURPOSES OF THIS
SECTION, (1) A "CURTAILMENT" SHALL MEAN AMOUNTS PAID BY MORTGAGORS (I)
IN EXCESS OF THE MONTHLY CONSTANT DUE DURING THE MONTH OF COLLECTION AND
(II) IN REDUCTION OF THE UNPAID PRINCIPAL BALANCE OF THE MORTGAGE; IN
THE ABSENCE OF CLEAR EVIDENCE TO THE CONTRARY, AMOUNTS PAID IN EXCESS OF
THE MONTHLY CONSTANT DUE DURING THE MONTH OF COLLECTION SHALL BE DEEMED
TO BE IN REDUCTION OF THE UNPAID PRINCIPAL BALANCE OF THE MORTGAGE; AND
(2) "MONTHLY CONSTANT" SHALL MEAN THE AMOUNT OF PRINCIPAL AND INTEREST
WHICH IS DUE AND PAYABLE ACCORDING TO THE MORTGAGE DOCUMENTS ON EACH
PERIODIC PAYMENT DATE.
(B) ELIGIBLE BUSINESS FACILITY CREDIT.
(1) ON OR AFTER APRIL FIRST, NINETEEN HUNDRED EIGHTY-THREE, FOR TAXA-
BLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND, A CREDIT AGAINST
THE TAX IMPOSED BY THIS ARTICLE SHALL BE ALLOWED ONLY TO A TAXPAYER
OWNING OR OPERATING AN ELIGIBLE BUSINESS FACILITY, WHERE SUCH TAXPAYER
HAS RECEIVED A CERTIFICATE OF ELIGIBILITY FOR TAX CREDITS, OR A RENEWAL
OR EXTENSION THEREOF, FOR SUCH FACILITY FROM THE NEW YORK STATE JOB
INCENTIVE BOARD PRIOR TO APRIL FIRST, NINETEEN HUNDRED EIGHTY-THREE, OR
HAS RECEIVED A CERTIFICATE OF ELIGIBILITY FOR TAX CREDITS, OR A RENEWAL
OR EXTENSION THEREOF, FOR SUCH FACILITY FROM THE STATE TAX COMMISSION
SUBSEQUENT TO SUCH DATE PURSUANT TO PARAGRAPH EIGHT OF THIS SUBSECTION,
AND ONLY WITH RESPECT TO SUCH FACILITY, TO BE COMPUTED AS HEREINAFTER
PROVIDED.
(2) THE AMOUNT OF THE CREDIT ALLOWABLE IN ANY TAXABLE YEAR SHALL BE
THE SUM DETERMINED BY MULTIPLYING THE TAX OTHERWISE DUE BY A PERCENTAGE
TO BE DETERMINED BY:
(A) ASCERTAINING THE PERCENTAGE WHICH THE TOTAL OF ELIGIBLE PROPERTY
VALUES DURING THE PERIOD COVERED BY ITS RETURN, AS DEFINED IN PARAGRAPH
FOUR OF THIS SUBSECTION, BEARS TO THE AVERAGE VALUE OF ALL THE TAXPAY-
ER'S REAL AND TANGIBLE PERSONAL PROPERTY EXCEPT FOR INVENTORY WITHIN THE
STATE DURING SUCH PERIOD. FOR THE PURPOSES OF THIS SUBPARAGRAPH ONLY,
THE TAXPAYER'S REAL AND TANGIBLE PERSONAL PROPERTY SHALL INCLUDE NOT
ONLY SUCH PROPERTY OWNED BY THE TAXPAYER BUT ALSO PROPERTY RENTED TO IT,
AND THE VALUE OF RENTED PROPERTY SHALL BE DEEMED TO BE EIGHT TIMES THE
NET ANNUAL RENTAL RATE, THAT IS, THE ANNUAL RENTAL RATE PAID BY THE
TAXPAYER LESS ANY ANNUAL RENTAL RATE RECEIVED BY THE TAXPAYER FROM
SUBRENTALS;
(B) ASCERTAINING THE PERCENTAGE WHICH THE TOTAL WAGES, SALARIES AND
OTHER PERSONAL SERVICE COMPENSATION DURING SUCH PERIOD, OF EMPLOYEES,
EXCEPT GENERAL EXECUTIVE OFFICERS AND THAT PORTION OF EMPLOYEE'S WAGES,
SALARIES AND OTHER PERSONAL SERVICE COMPENSATION ATTRIBUTABLE, DIRECTLY
OR INDIRECTLY, TO THE PRODUCTION OF ADJUSTED ELIGIBLE NET INCOME WHICH
IS ALLOWED AS A DEDUCTION FROM ENTIRE NET INCOME AS SET FORTH IN
SUBSECTION (F) OF SECTION FOURTEEN HUNDRED FIFTY-THREE OF THIS ARTICLE,
SERVING IN JOBS CREATED OR RETAINED IN AN ELIGIBLE AREA (AS THE TERM
"ELIGIBLE AREA" WAS DEFINED BY SECTION ONE HUNDRED FIFTEEN OF THE
COMMERCE LAW AS IT EXISTED ON MARCH THIRTY-FIRST, NINETEEN HUNDRED
EIGHTY-THREE) BY SUCH BUSINESS FACILITY, BEARS TO THE TOTAL WAGES, SALA-
RIES AND OTHER PERSONAL SERVICE COMPENSATION, DURING SUCH PERIOD, OF ALL
THE TAXPAYER'S EMPLOYEES WITHIN THE STATE, EXCEPT GENERAL EXECUTIVE
OFFICERS; AND
S. 3456 53
(C) ADDING TOGETHER THE PERCENTAGES SO DETERMINED AND DIVIDING THE
RESULT BY TWO; PROVIDED, HOWEVER, THAT IF NO WAGES, SALARIES OR OTHER
PERSONAL SERVICE COMPENSATION WERE PAID OR INCURRED BY THE TAXPAYER
DURING SUCH PERIOD TO EMPLOYEES WITHIN THE STATE OTHER THAN GENERAL
EXECUTIVE OFFICERS, SUBPARAGRAPH (B) OF THIS PARAGRAPH SHALL BE DISRE-
GARDED AND THE AMOUNT OF CREDIT ALLOWABLE SHALL BE DETERMINED BY MULTI-
PLYING THE TAX OTHERWISE DUE BY THE PERCENTAGE SPECIFIED IN SUBPARAGRAPH
(A) OF THIS PARAGRAPH.
(3) IN NO EVENT SHALL THE CREDIT HEREIN PROVIDED FOR BE ALLOWED IN ANY
AMOUNT WHICH WILL REDUCE THE TAX PAYABLE TO LESS THAN THE DOLLAR AMOUNT
FIXED AS A MINIMUM TAX BY SUBSECTION (B) OF SECTION FOURTEEN HUNDRED
FIFTY-FIVE.
(4) (A) ELIGIBLE PROPERTY VALUES, FOR THE PURPOSES OF THIS SUBSECTION,
SHALL INCLUDE SUCH PART OF THE VALUE OF DEPRECIABLE REAL AND TANGIBLE
PERSONAL PROPERTY INCLUDED IN AN ELIGIBLE BUSINESS FACILITY AS REPRES-
ENTS:
(I) EXPENDITURES PAID OR INCURRED BY THE TAXPAYER FOR CAPITAL IMPROVE-
MENTS CONSISTING OF THE CONSTRUCTION, RECONSTRUCTION, ERECTION OR
IMPROVEMENT OF REAL PROPERTY INCLUDED IN AN ELIGIBLE FACILITY, WHICH
CONSTRUCTION, RECONSTRUCTION, ERECTION OR IMPROVEMENTS WERE COMMENCED ON
OR AFTER JULY FIRST, NINETEEN HUNDRED SIXTY-EIGHT;
(II) IN THE CASE OF REAL PROPERTY LEASED BY THE TAXPAYER FROM ANOTHER
PARTY, EIGHT TIMES THE PORTION OF THE NET ANNUAL RENTAL RATE ATTRIBUT-
ABLE TO SUCH CONSTRUCTION, RECONSTRUCTION, ERECTION OR IMPROVEMENT
COMMENCED ON OR AFTER JULY FIRST, NINETEEN HUNDRED SIXTY-EIGHT;
(III) EXPENDITURES PAID OR INCURRED BY THE TAXPAYER FOR THE PURCHASE
OF TANGIBLE PERSONAL PROPERTY, OTHER THAN VEHICLES, INCLUDED IN AN
ELIGIBLE BUSINESS FACILITY, PROVIDED SUCH PROPERTY WAS PURCHASED ON OR
AFTER JULY FIRST, NINETEEN HUNDRED SIXTY-EIGHT; AND
(IV) IN THE CASE OF TANGIBLE PERSONAL PROPERTY, OTHER THAN VEHICLES,
LEASED BY THE TAXPAYER FROM ANOTHER PARTY AND INCLUDED IN AN ELIGIBLE
BUSINESS FACILITY, EIGHT TIMES THE NET ANNUAL RENTAL RATE, PROVIDED THE
PERIOD FOR WHICH SUCH PROPERTY WAS LEASED BY THE TAXPAYER BEGAN ON OR
AFTER JULY FIRST, NINETEEN HUNDRED SIXTY-EIGHT.
(B) PROVIDED, HOWEVER, ELIGIBLE PROPERTY VALUES FOR PURPOSES OF THIS
SUBDIVISION SHALL NOT INCLUDE EXPENDITURES PAID OR INCURRED MORE THAN
ONE YEAR PRIOR TO THE FILING OF AN APPLICATION FOR A CERTIFICATE OF
ELIGIBILITY PURSUANT TO SECTION ONE HUNDRED NINETEEN OF THE COMMERCE
LAW, AS SUCH SECTION EXISTED ON MARCH THIRTY-FIRST, NINETEEN HUNDRED
EIGHTY-THREE.
(C) PROVIDED FURTHER THAT, FOR PURPOSES OF THIS SUBSECTION, ELIGIBLE
PROPERTY VALUES SHALL NOT INCLUDE THAT PORTION OF THE VALUE OF PROPERTY
WHICH IS USED IN THE PRODUCTION OF ADJUSTED ELIGIBLE NET INCOME WHICH IS
ALLOWED AS A DEDUCTION FROM ENTIRE NET INCOME AS SET FORTH IN SUBSECTION
(F) OF SECTION FOURTEEN HUNDRED FIFTY-THREE OF THIS ARTICLE.
(5) THE TOTAL OF ALL CREDITS ALLOWED PURSUANT TO THIS SUBSECTION IN
ANY TAXABLE YEAR OR YEARS WITH REFERENCE TO ANY ELIGIBLE BUSINESS FACIL-
ITY SHALL NOT EXCEED THE TOTAL ELIGIBLE PROPERTY VALUES INCLUDED.
(6) IF A CREDIT IS ALLOWED FOR ANY TAXABLE YEAR AS HEREIN PROVIDED ON
THE BASIS OF A CERTIFICATE OF ELIGIBILITY, AND IF SUCH CERTIFICATE IS
REVOKED OR MODIFIED, THE TAXPAYER SHALL REPORT SUCH REVOCATION OR
MODIFICATION IN ITS RETURN FOR THE TAXABLE YEAR DURING WHICH IT OCCURS,
AND THE TAX COMMISSION SHALL RECOMPUTE SUCH CREDIT AND MAY ASSESS ANY
ADDITIONAL TAX RESULTING FROM SUCH RECOMPUTATION WITHIN THE TIME FIXED
BY PARAGRAPH NINE OF SUBSECTION (C) OF SECTION TEN HUNDRED EIGHTY-THREE
OF THIS CHAPTER.
S. 3456 54
(7) IF A BUSINESS FACILITY OWNED OR OPERATED BY A TAXPAYER SHALL BE AN
ELIGIBLE BUSINESS FACILITY FOR ONLY PART OF A TAXABLE YEAR, THE CREDIT
ALLOWED BY THIS SUBDIVISION SHALL BE PRORATED ACCORDING TO THE PERIOD
SUCH FACILITY WAS AN ELIGIBLE BUSINESS FACILITY, AND IF THE TOTAL OF THE
ELIGIBLE PROPERTY VALUES SHALL HAVE CHANGED DURING ANY TAXABLE YEAR, A
PRO-RATA ADJUSTMENT SHALL BE MADE IN COMPUTING SUCH CREDIT.
(8) THE STATE TAX COMMISSION SHALL BE EMPOWERED, ON OR AFTER APRIL
FIRST, NINETEEN HUNDRED EIGHTY-THREE, TO ISSUE A CERTIFICATE OF ELIGI-
BILITY FOR TAX CREDITS TO A TAXPAYER FOR AN ELIGIBLE BUSINESS FACILITY
WITH REGARD TO WHICH SUCH TAXPAYER HAS, PRIOR TO JULY FIRST, NINETEEN
HUNDRED EIGHTY-THREE, RECEIVED FROM THE NEW YORK STATE JOB INCENTIVE
BOARD INITIAL APPROVAL OF AN APPLICATION FOR SUCH CERTIFICATE BY SUCH
BOARD AS EVIDENCED BY THE MINUTES OF THE MEETING OF THE BOARD AT WHICH
SUCH APPLICATION WAS APPROVED, OR A LETTER OF INTENT AUTHORIZED BY
SECTION 102.4 OF PART ONE HUNDRED TWO OF TITLE FIVE OF THE CODES, RULES
AND REGULATIONS OF THE STATE OF NEW YORK REGARDING SUCH CERTIFICATE OF
ELIGIBILITY AND TO RENEW, EXTEND, REVOKE OR MODIFY A CERTIFICATE OF
ELIGIBILITY FOR TAX CREDITS, PURSUANT TO SECTION ONE HUNDRED TWENTY OF
THE COMMERCE LAW AS SUCH SECTION EXISTED ON MARCH THIRTY-FIRST, NINETEEN
HUNDRED EIGHTY-THREE.
(9) FOR PURPOSES OF THE REQUIREMENT FOR ELIGIBILITY FOR THE CREDIT
ALLOWED UNDER THIS SUBDIVISION THAT A BUSINESS FACILITY CREATE OR RETAIN
NOT LESS THAN FIVE JOBS AS PROVIDED IN SUBDIVISION (C) OF SECTION ONE
HUNDRED EIGHTEEN OF THE COMMERCE LAW AS SUCH SECTION EXISTED ON MARCH
THIRTY-FIRST, NINETEEN HUNDRED EIGHTY-THREE, A BUSINESS FACILITY SHALL
HAVE (I) CREATED NOT LESS THAN FIVE JOBS ONLY IF THE NUMBER OF JOBS FOR
THE TAXABLE YEAR EXCEEDS THE NUMBER OF JOBS AT THE TIME OF THE COMMENCE-
MENT OF THE PROJECT AS STATED ON ITS APPLICATION FOR INITIAL APPROVAL BY
FIVE OR MORE; OR (II) RETAINED NOT LESS THAN FIVE JOBS ONLY IF INITIAL
APPROVAL WAS BASED ON THE RETENTION OF FIVE OR MORE JOBS AND (A) THE
NUMBER OF JOBS FOR THE TAXABLE YEAR IS AT LEAST EQUAL TO THE NUMBER OF
JOBS AT THE TIME OF THE COMMENCEMENT OF THE PROJECT AS STATED ON ITS
APPLICATION FOR INITIAL APPROVAL OR (B) WHERE INITIAL APPROVAL WAS BASED
ON THE RETENTION OF FEWER JOBS THAN THE NUMBER OF JOBS AT THE TIME OF
THE COMMENCEMENT OF THE PROJECT AS STATED ON ITS APPLICATION FOR INITIAL
APPROVAL, THE NUMBER OF JOBS FOR THE TAXABLE YEAR IS AT LEAST EQUAL TO
THE NUMBER APPROVED FOR RETENTION. FOR PURPOSES OF THIS PARAGRAPH, THE
PHRASE "INITIAL APPROVAL WAS BASED ON THE RETENTION OF FIVE OR MORE
JOBS" SHALL MEAN THAT SUCH INITIAL APPROVAL WAS GIVEN BY THE JOB INCEN-
TIVE BOARD TO AN APPLICANT THAT HAD NOT STATED IN ITS APPLICATION FOR
INITIAL APPROVAL THAT IT WOULD INCREASE THE NUMBER OF JOBS AT ITS FACIL-
ITY BY AT LEAST FIVE.
(C) MORTGAGE RECORDING TAX CREDIT. (1) A TAXPAYER SHALL BE ALLOWED A
CREDIT, TO BE CREDITED AGAINST THE TAX IMPOSED BY THIS ARTICLE. THE
AMOUNT OF THE CREDIT SHALL BE THE AMOUNT OF THE SPECIAL ADDITIONAL MORT-
GAGE RECORDING TAX PAID BY THE TAXPAYER PURSUANT TO THE PROVISIONS OF
SUBDIVISION ONE-A OF SECTION TWO HUNDRED FIFTY-THREE OF THIS CHAPTER ON
MORTGAGES RECORDED ON AND AFTER JANUARY FIRST, NINETEEN HUNDRED SEVEN-
TY-NINE. PROVIDED, HOWEVER, NO CREDIT SHALL BE ALLOWED WITH RESPECT TO A
MORTGAGE OF REAL PROPERTY PRINCIPALLY IMPROVED OR TO BE IMPROVED BY ONE
OR MORE STRUCTURES CONTAINING IN THE AGGREGATE NOT MORE THAN SIX RESI-
DENTIAL DWELLING UNITS, EACH DWELLING UNIT HAVING ITS OWN SEPARATE COOK-
ING FACILITIES, WHERE THE REAL PROPERTY IS LOCATED IN ONE OR MORE OF THE
COUNTIES COMPRISING THE METROPOLITAN COMMUTER TRANSPORTATION DISTRICT
AND WHERE THE MORTGAGE IS RECORDED ON OR AFTER MAY FIRST, NINETEEN
HUNDRED EIGHTY-SEVEN. PROVIDED, HOWEVER, NO CREDIT SHALL BE ALLOWED WITH
S. 3456 55
RESPECT TO A MORTGAGE OF REAL PROPERTY PRINCIPALLY IMPROVED OR TO BE
IMPROVED BY ONE OR MORE STRUCTURES CONTAINING IN THE AGGREGATE NOT MORE
THAN SIX RESIDENTIAL DWELLING UNITS, EACH DWELLING UNIT HAVING ITS OWN
SEPARATE COOKING FACILITIES, WHERE THE REAL PROPERTY IS LOCATED IN THE
COUNTY OF ERIE AND WHERE THE MORTGAGE IS RECORDED ON OR AFTER MAY FIRST,
NINETEEN HUNDRED EIGHTY-SEVEN.
(2) IN NO EVENT SHALL THE CREDIT HEREIN PROVIDED FOR, AND CARRYOVERS
OF SUCH CREDIT, IN THE AGGREGATE, BE ALLOWED IN AN AMOUNT WHICH WILL
REDUCE THE TAX PAYABLE TO LESS THAN THE DOLLAR AMOUNT FIXED AS A MINIMUM
TAX BY SUBSECTION (B) OF SECTION FOURTEEN HUNDRED FIFTY-FIVE. HOWEVER,
IF THE AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT, OR BOTH, ALLOWABLE
UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH
AMOUNT, ANY AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT THUS NOT
DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING
YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR
OR YEARS.
(D) EMPIRE ZONE CAPITAL CREDIT.
(1) A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY
THIS ARTICLE. THE AMOUNT OF THE CREDIT SHALL BE EQUAL TO TWENTY-FIVE
PERCENT OF THE SUM OF THE FOLLOWING INVESTMENTS AND CONTRIBUTIONS MADE
DURING THE TAXABLE YEAR AND CERTIFIED BY THE COMMISSIONER OF ECONOMIC
DEVELOPMENT: (A) FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO
THOUSAND FIVE, QUALIFIED INVESTMENTS MADE IN, OR CONTRIBUTIONS IN THE
FORM OF DONATIONS MADE TO, ONE OR MORE EMPIRE ZONE CAPITAL CORPORATIONS
ESTABLISHED PURSUANT TO SECTION NINE HUNDRED SIXTY-FOUR OF THE GENERAL
MUNICIPAL LAW PRIOR TO JANUARY FIRST, TWO THOUSAND FIVE, (B) QUALIFIED
INVESTMENTS IN CERTIFIED ZONE BUSINESSES WHICH DURING THE TWELVE MONTH
PERIOD IMMEDIATELY PRECEDING THE MONTH IN WHICH SUCH INVESTMENT IS MADE
EMPLOYED FULL-TIME WITHIN THE STATE AN AVERAGE NUMBER OF INDIVIDUALS,
EXCLUDING GENERAL EXECUTIVE OFFICERS, OF TWO HUNDRED FIFTY OR FEWER,
COMPUTED PURSUANT TO THE PROVISIONS OF SUBPARAGRAPH (C) OF PARAGRAPH TWO
OF SUBSECTION (E) OF THIS SECTION, EXCEPT FOR INVESTMENTS MADE BY OR ON
BEHALF OF AN OWNER OF THE BUSINESS, INCLUDING, BUT NOT LIMITED TO, A
STOCKHOLDER, PARTNER OR SOLE PROPRIETOR, OR ANY RELATED PERSON, AS
DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF SUBSECTION (B) OF
SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVENUE CODE, AND (C)
CONTRIBUTIONS OF MONEY TO COMMUNITY DEVELOPMENT PROJECTS AS DEFINED IN
REGULATIONS PROMULGATED BY THE COMMISSIONER OF ECONOMIC DEVELOPMENT.
"QUALIFIED INVESTMENTS" MEANS THE CONTRIBUTION OF PROPERTY TO A CORPO-
RATION IN EXCHANGE FOR ORIGINAL ISSUE CAPITAL STOCK OR OTHER OWNERSHIP
INTEREST, THE CONTRIBUTION OF PROPERTY TO A PARTNERSHIP IN EXCHANGE FOR
AN INTEREST IN THE PARTNERSHIP, AND SIMILAR CONTRIBUTIONS IN THE CASE OF
A BUSINESS ENTITY NOT IN CORPORATE OR PARTNERSHIP FORM IN EXCHANGE FOR
AN OWNERSHIP INTEREST IN SUCH ENTITY. THE TOTAL AMOUNT OF CREDIT ALLOW-
ABLE TO A TAXPAYER UNDER THIS PROVISION FOR ALL YEARS, TAKEN IN THE
AGGREGATE, SHALL NOT EXCEED THREE HUNDRED THOUSAND DOLLARS, AND SHALL
NOT EXCEED ONE HUNDRED THOUSAND DOLLARS WITH RESPECT TO THE INVESTMENTS
AND CONTRIBUTIONS DESCRIBED IN EACH OF SUBPARAGRAPHS (A), (B) AND (C) OF
THIS PARAGRAPH.
(2) THE CREDIT AND CARRYOVER OF SUCH CREDIT ALLOWED UNDER THIS
SUBSECTION FOR ANY TAXABLE YEAR SHALL NOT, IN THE AGGREGATE, REDUCE THE
TAX DUE FOR SUCH YEAR TO LESS THAN THE MINIMUM TAX FIXED BY SUBSECTION
(B) OF SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF
THE AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT, OR BOTH, ALLOWED
UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH
AMOUNT, OR IF ANY PART OF THE CREDIT OR CARRYOVERS OF SUCH CREDIT MAY
S. 3456 56
NOT BE DEDUCTED FROM THE TAX OTHERWISE DUE BY REASON OF THE FINAL
SENTENCE OF THIS PARAGRAPH, ANY AMOUNT OF CREDIT OR CARRYOVERS OF SUCH
CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO
THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAX FOR SUCH
YEAR OR YEARS. IN ADDITION, THE AMOUNT OF SUCH CREDIT, AND CARRYOVERS OF
SUCH CREDIT TO THE TAXABLE YEAR, DEDUCTED FROM THE TAX OTHERWISE DUE MAY
NOT, IN THE AGGREGATE, EXCEED FIFTY PERCENT OF THE TAX IMPOSED UNDER
SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE COMPUTED WITHOUT
REGARD TO ANY CREDIT PROVIDED FOR UNDER THIS ARTICLE.
(2-A) ANY CARRYOVER OF A CREDIT FROM PRIOR TAXABLE YEARS WILL NOT BE
ALLOWED TO AN EMPIRE ZONE ENTERPRISE WHICH IS THE BASIS OF THE CREDIT,
IF AN EMPIRE ZONE RETENTION CERTIFICATE IS NOT ISSUED TO SUCH ENTITY
PURSUANT TO SUBDIVISION (W) OF SECTION NINE HUNDRED FIFTY-NINE OF THE
GENERAL MUNICIPAL LAW.
(3) WHERE THE STOCK, PARTNERSHIP INTEREST OR OTHER OWNERSHIP INTEREST
ARISING FROM A QUALIFIED INVESTMENT AS DESCRIBED IN SUBPARAGRAPHS (A)
AND (B) OF PARAGRAPH ONE OF THIS SUBSECTION IS DISPOSED OF, THE TAXPAY-
ER'S ENTIRE NET INCOME SHALL BE COMPUTED, PURSUANT TO REGULATIONS
PROMULGATED BY THE COMMISSIONER, SO AS TO PROPERLY REFLECT THE REDUCED
COST THEREOF ARISING FROM THE APPLICATION OF THE CREDIT PROVIDED FOR
HEREIN.
(4)(A) WHERE A TAXPAYER SELLS, TRANSFERS OR OTHERWISE DISPOSES OF
CORPORATE STOCK, A PARTNERSHIP INTEREST OR OTHER OWNERSHIP INTEREST
ARISING FROM THE MAKING OF A QUALIFIED INVESTMENT WHICH WAS THE BASIS,
IN WHOLE OR IN PART, FOR THE ALLOWANCE OF THE CREDIT PROVIDED FOR UNDER
THIS SUBSECTION, OR WHERE A CONTRIBUTION OR INVESTMENT WHICH WAS THE
BASIS FOR SUCH ALLOWANCE IS IN ANY MANNER, IN WHOLE OR IN PART, RECOV-
ERED BY SUCH TAXPAYER, AND SUCH DISPOSITION OR RECOVERY OCCURS DURING
THE TAXABLE YEAR OR WITHIN THIRTY-SIX MONTHS FROM THE CLOSE OF THE TAXA-
BLE YEAR WITH RESPECT TO WHICH SUCH CREDIT IS ALLOWED, SUBPARAGRAPH (B)
OF THIS PARAGRAPH SHALL APPLY.
(B) THE TAXPAYER SHALL ADD BACK WITH RESPECT TO THE TAXABLE YEAR IN
WHICH THE DISPOSITION OR RECOVERY DESCRIBED IN SUBPARAGRAPH (A) OF THIS
PARAGRAPH OCCURRED THE REQUIRED PORTION OF THE CREDIT ORIGINALLY
ALLOWED.
(C) THE REQUIRED PORTION OF THE CREDIT ORIGINALLY ALLOWED SHALL BE THE
PRODUCT OF (I) THE PORTION OF SUCH CREDIT ATTRIBUTABLE TO THE PROPERTY
DISPOSED OF OR THE PAYMENT OR CONTRIBUTION RECOVERED AND (II) THE APPLI-
CABLE PERCENTAGE.
(D) THE APPLICABLE PERCENTAGE SHALL BE:
(I) ONE HUNDRED PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS WITHIN
THE TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED OR WITHIN
TWELVE MONTHS OF THE END OF SUCH TAXABLE YEAR,
(II) SIXTY-SEVEN PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS MORE
THAN TWELVE BUT NOT MORE THAN TWENTY-FOUR MONTHS AFTER THE END OF THE
TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED, OR
(III) THIRTY-THREE PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS MORE
THAN TWENTY-FOUR BUT NOT MORE THAN THIRTY-SIX MONTHS AFTER THE END OF
THE TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED.
(5) IF THE DESIGNATION OF AN AREA AS AN EMPIRE ZONE IS NO LONGER IN
EFFECT BECAUSE THE DESIGNATIONS OF ALL EMPIRE ZONES PURSUANT TO ARTICLE
EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW HAVE EXPIRED, A TAXPAYER THAT
HAS MADE A CONTRIBUTION OF MONEY ON OR BEFORE THE DAY IMMEDIATELY
PRECEDING THE DAY THE EMPIRE ZONES EXPIRED TO A COMMUNITY DEVELOPMENT
PROJECT APPROVED BY THE COMMISSIONER OF ECONOMIC DEVELOPMENT SHALL BE
DEEMED ELIGIBLE TO CLAIM THE EMPIRE ZONE CAPITAL CREDIT UNDER SUBPARA-
S. 3456 57
GRAPH (C) OF PARAGRAPH ONE OF THIS SUBSECTION FOR ADDITIONAL CONTRIB-
UTIONS MADE PRIOR TO APRIL FIRST, TWO THOUSAND FOURTEEN AND CERTIFIED BY
THE COMMISSIONER OF ECONOMIC DEVELOPMENT TO THAT COMMUNITY DEVELOPMENT
PROJECT AS PAYMENT OF A COMMITMENT MADE BY THE TAXPAYER TO THAT COMMUNI-
TY DEVELOPMENT PROJECT BEFORE THE EMPIRE ZONES EXPIRED.
(E) EMPIRE ZONE WAGE TAX CREDIT. (1) A TAXPAYER SHALL BE ALLOWED A
CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED
BY THIS ARTICLE WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO ARTI-
CLE EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW. THE AMOUNT OF SUCH CREDIT
SHALL BE AS PRESCRIBED IN PARAGRAPH FOUR HEREOF.
(2) FOR PURPOSES OF THIS SUBSECTION, THE FOLLOWING TERMS SHALL HAVE
THE FOLLOWING MEANINGS: (A) "EMPIRE ZONE WAGES" MEANS WAGES PAID BY THE
TAXPAYER FOR FULL-TIME EMPLOYMENT, OTHER THAN TO GENERAL EXECUTIVE OFFI-
CERS, DURING THE TAXABLE YEAR IN AN AREA DESIGNATED OR PREVIOUSLY DESIG-
NATED AS AN EMPIRE ZONE OR ZONE EQUIVALENT AREA PURSUANT TO ARTICLE
EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW WHERE SUCH EMPLOYMENT IS IN A
JOB CREATED IN THE AREA (I) DURING THE PERIOD OF ITS DESIGNATION AS AN
EMPIRE ZONE, (II) WITHIN FOUR YEARS OF THE EXPIRATION OF SUCH DESIG-
NATION, OR (III) DURING THE TEN YEAR PERIOD IMMEDIATELY FOLLOWING THE
DATE OF DESIGNATION AS A ZONE EQUIVALENT AREA, PROVIDED, HOWEVER, THAT
IF THE TAXPAYER'S CERTIFICATION UNDER ARTICLE EIGHTEEN-B OF THE GENERAL
MUNICIPAL LAW IS REVOKED WITH RESPECT TO AN EMPIRE ZONE OR ZONE EQUIV-
ALENT AREA, ANY WAGES PAID BY THE TAXPAYER, ON OR AFTER THE EFFECTIVE
DATE OF SUCH DECERTIFICATION, FOR EMPLOYMENT IN SUCH ZONE SHALL NOT
CONSTITUTE EMPIRE ZONE WAGES.
(B) "TARGETED EMPLOYEE" MEANS A NEW YORK RESIDENT WHO RECEIVES EMPIRE
ZONE WAGES AND WHO IS (I) AN ELIGIBLE INDIVIDUAL UNDER THE PROVISIONS OF
THE TARGETED JOBS TAX CREDIT (SECTION FIFTY-ONE OF THE INTERNAL REVENUE
CODE), (II) ELIGIBLE FOR BENEFITS UNDER THE PROVISIONS OF THE WORKFORCE
INVESTMENT ACT AS A DISLOCATED WORKER OR LOW-INCOME INDIVIDUAL (P.L.
105-220, AS AMENDED), (III) A RECIPIENT OF PUBLIC ASSISTANCE BENEFITS,
(IV) AN INDIVIDUAL WHOSE INCOME IS BELOW THE MOST RECENTLY ESTABLISHED
POVERTY RATE PROMULGATED BY THE UNITED STATES DEPARTMENT OF COMMERCE, OR
A MEMBER OF A FAMILY WHOSE FAMILY INCOME IS BELOW THE MOST RECENTLY
ESTABLISHED POVERTY RATE PROMULGATED BY THE APPROPRIATE FEDERAL AGENCY
OR (V) AN HONORABLY DISCHARGED MEMBER OF ANY BRANCH OF THE ARMED FORCES
OF THE UNITED STATES.
AN INDIVIDUAL WHO SATISFIES THE CRITERIA SET FORTH IN CLAUSE (I),
(II), (IV) OR (V) OF THIS SUBPARAGRAPH AT THE TIME OF INITIAL EMPLOYMENT
IN THE JOB WITH RESPECT TO WHICH THE CREDIT IS CLAIMED, OR WHO SATISFIES
THE CRITERION SET FORTH IN CLAUSE (III) OF THIS SUBPARAGRAPH AT SUCH
TIME OR AT ANY TIME WITHIN THE PREVIOUS TWO YEARS, SHALL BE A TARGETED
EMPLOYEE SO LONG AS SUCH INDIVIDUAL CONTINUES TO RECEIVE EMPIRE ZONE
WAGES.
(C) "AVERAGE NUMBER OF INDIVIDUALS, EXCLUDING GENERAL EXECUTIVE OFFI-
CERS, EMPLOYED FULL-TIME" SHALL BE COMPUTED BY ASCERTAINING THE NUMBER
OF SUCH INDIVIDUALS EMPLOYED BY THE TAXPAYER ON THE THIRTY-FIRST DAY OF
MARCH, THE THIRTIETH DAY OF JUNE, THE THIRTIETH DAY OF SEPTEMBER AND THE
THIRTY-FIRST DAY OF DECEMBER DURING EACH TAXABLE YEAR OR OTHER APPLICA-
BLE PERIOD, BY ADDING TOGETHER THE NUMBER OF SUCH INDIVIDUALS ASCER-
TAINED ON EACH OF SUCH DATES AND DIVIDING THE SUM SO OBTAINED BY THE
NUMBER OF SUCH DATES OCCURRING WITHIN SUCH TAXABLE YEAR OR OTHER APPLI-
CABLE PERIOD.
(3) THE CREDIT PROVIDED FOR HEREIN SHALL BE ALLOWED ONLY WHERE THE
AVERAGE NUMBER OF INDIVIDUALS, EXCLUDING GENERAL EXECUTIVE OFFICERS,
EMPLOYED FULL-TIME BY THE TAXPAYER IN (A) (I) THE STATE AND (II) THE
S. 3456 58
EMPIRE ZONE OR AREA PREVIOUSLY CONSTITUTING SUCH ZONE OR ZONE EQUIVALENT
AREA, DURING THE TAXABLE YEAR EXCEEDS THE AVERAGE NUMBER OF SUCH INDI-
VIDUALS EMPLOYED FULL-TIME BY THE TAXPAYER IN (B) (I) THE STATE AND (II)
SUCH ZONE OR AREA SUBSEQUENTLY OR PREVIOUSLY CONSTITUTING SUCH ZONE OR
SUCH ZONE EQUIVALENT AREA, RESPECTIVELY, DURING THE FOUR YEARS IMME-
DIATELY PRECEDING THE FIRST TAXABLE YEAR IN WHICH THE CREDIT IS CLAIMED
WITH RESPECT TO SUCH ZONE OR AREA. WHERE THE TAXPAYER PROVIDED FULL-TIME
EMPLOYMENT WITHIN (C) (I) THE STATE OR (II) SUCH ZONE OR AREA DURING
ONLY A PORTION OF SUCH FOUR-YEAR PERIOD, THEN FOR PURPOSES OF THIS PARA-
GRAPH THE TERM "FOUR YEARS" SHALL BE DEEMED TO REFER INSTEAD TO SUCH
PORTION, IF ANY.
THE CREDIT SHALL BE ALLOWED ONLY WITH RESPECT TO THE FIRST TAXABLE
YEAR DURING WHICH PAYMENTS OF EMPIRE ZONE WAGES ARE MADE AND THE CONDI-
TIONS SET FORTH IN THIS PARAGRAPH ARE SATISFIED, AND WITH RESPECT TO
EACH OF THE FOUR TAXABLE YEARS NEXT FOLLOWING (BUT ONLY, WITH RESPECT TO
EACH OF SUCH YEARS, IF SUCH CONDITIONS ARE SATISFIED), IN ACCORDANCE
WITH PARAGRAPH FOUR OF THIS SUBSECTION. SUBSEQUENT CERTIFICATIONS OF THE
TAXPAYER PURSUANT TO ARTICLE EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW, AT
THE SAME OR A DIFFERENT LOCATION IN THE SAME EMPIRE ZONE OR ZONE EQUIV-
ALENT AREA OR AT A LOCATION IN A DIFFERENT EMPIRE ZONE OR ZONE EQUIV-
ALENT AREA, SHALL NOT EXTEND THE FIVE TAXABLE YEAR TIME LIMITATION ON
THE ALLOWANCE OF THE CREDIT SET FORTH IN THE PRECEDING SENTENCE.
PROVIDED, FURTHER, HOWEVER, THAT NO CREDIT SHALL BE ALLOWED WITH RESPECT
TO ANY TAXABLE YEAR BEGINNING MORE THAN FOUR YEARS FOLLOWING THE TAXABLE
YEAR IN WHICH DESIGNATION AS AN EMPIRE ZONE EXPIRED OR MORE THAN TEN
YEARS AFTER THE DESIGNATION AS A ZONE EQUIVALENT AREA.
(4) THE AMOUNT OF THE CREDIT SHALL EQUAL THE SUM OF (A) THE PRODUCT OF
THREE THOUSAND DOLLARS AND THE AVERAGE NUMBER OF INDIVIDUALS (EXCLUDING
GENERAL EXECUTIVE OFFICERS) EMPLOYED FULL-TIME BY THE TAXPAYER, COMPUTED
PURSUANT TO THE PROVISIONS OF SUBPARAGRAPH (C) OF PARAGRAPH TWO OF THIS
SUBSECTION, WHO (I) RECEIVED EMPIRE ZONE WAGES FOR MORE THAN HALF OF THE
TAXABLE YEAR, (II) RECEIVED, WITH RESPECT TO MORE THAN HALF OF THE PERI-
OD OF EMPLOYMENT BY THE TAXPAYER DURING THE TAXABLE YEAR, AN HOURLY WAGE
WHICH WAS AT LEAST ONE HUNDRED THIRTY-FIVE PERCENT OF THE MINIMUM WAGE
SPECIFIED IN SECTION SIX HUNDRED FIFTY-TWO OF THE LABOR LAW, AND (III)
ARE TARGETED EMPLOYEES; AND
(B) THE PRODUCT OF FIFTEEN HUNDRED DOLLARS AND THE AVERAGE NUMBER OF
INDIVIDUALS (EXCLUDING GENERAL EXECUTIVE OFFICERS AND INDIVIDUALS
DESCRIBED IN SUBPARAGRAPH (A) OF THIS PARAGRAPH) EMPLOYED FULL-TIME BY
THE TAXPAYER, COMPUTED PURSUANT TO THE PROVISIONS OF SUBPARAGRAPH (C) OF
PARAGRAPH TWO OF THIS SUBSECTION, WHO RECEIVED EMPIRE ZONE WAGES FOR
MORE THAN HALF OF THE TAXABLE YEAR.
(C) FOR PURPOSES OF CALCULATING THE AMOUNT OF THE CREDIT, INDIVIDUALS
EMPLOYED WITHIN AN EMPIRE ZONE OR ZONE EQUIVALENT AREA WITHIN THE IMME-
DIATELY PRECEDING SIXTY MONTHS BY A RELATED PERSON, AS SUCH TERM IS
DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF SUBSECTION (B) OF
SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVENUE CODE, SHALL NOT
BE INCLUDED IN THE AVERAGE NUMBER OF INDIVIDUALS DESCRIBED IN SUBPARA-
GRAPH (A) OR SUBPARAGRAPH (B) OF THIS PARAGRAPH, UNLESS SUCH RELATED
PERSON WAS NEVER ALLOWED A CREDIT UNDER THIS SUBSECTION WITH RESPECT TO
SUCH EMPLOYEES. FOR THE PURPOSES OF THIS SUBPARAGRAPH, A "RELATED
PERSON" SHALL INCLUDE AN ENTITY WHICH WOULD HAVE QUALIFIED AS A "RELATED
PERSON" TO THE TAXPAYER IF IT HAD NOT BEEN DISSOLVED, LIQUIDATED, MERGED
WITH ANOTHER ENTITY OR OTHERWISE CEASED TO EXIST OR OPERATE.
(D) IF A TAXPAYER IS CERTIFIED IN AN EMPIRE ZONE DESIGNATED UNDER
SUBDIVISION (A) OR (D) OF SECTION NINE HUNDRED FIFTY-EIGHT OF THE GENER-
S. 3456 59
AL MUNICIPAL LAW, THE DOLLAR AMOUNTS SPECIFIED UNDER SUBPARAGRAPH (A) OR
(B) OF THIS PARAGRAPH SHALL BE INCREASED BY FIVE HUNDRED DOLLARS FOR
EACH QUALIFYING INDIVIDUAL UNDER SUCH SUBPARAGRAPH WHO RECEIVED, DURING
THE TAXABLE YEAR, WAGES IN EXCESS OF FORTY THOUSAND DOLLARS.
(E) THE REQUIREMENT IN THIS PARAGRAPH THAT AN EMPLOYEE MUST RECEIVE
EMPIRE ZONE WAGES FOR MORE THAN HALF THE TAXABLE YEAR SHALL NOT APPLY IN
THE FIRST TAXABLE YEAR OF A TAXPAYER SATISFYING THE CRITERIA SET FORTH
IN THIS SUBPARAGRAPH. IN SUCH A CASE, THE CREDIT ALLOWED UNDER THIS
SUBSECTION SHALL BE COMPUTED BY UTILIZING THE NUMBER OF INDIVIDUALS
(EXCLUDING GENERAL EXECUTIVE OFFICERS) EMPLOYED FULL TIME BY THE TAXPAY-
ER ON THE LAST DAY OF ITS FIRST TAXABLE YEAR. A TAXPAYER SHALL SATISFY
THE FOLLOWING CRITERIA: (I) SUCH TAXPAYER ACQUIRED REAL OR TANGIBLE
PERSONAL PROPERTY DURING ITS FIRST TAXABLE YEAR FROM AN ENTITY WHICH IS
NOT A RELATED PERSON (AS SUCH TERM IS DEFINED IN SUBDIVISION (G) OF
SECTION FOURTEEN OF THIS CHAPTER); (II) THE FIRST TAXABLE YEAR OF SUCH
TAXPAYER SHALL BE A SHORT TAXABLE YEAR OF NOT MORE THAN SEVEN MONTHS IN
DURATION; AND (III) THE NUMBER OF INDIVIDUALS EMPLOYED FULL-TIME ON THE
LAST DAY OF SUCH FIRST TAXABLE YEAR SHALL BE AT LEAST ONE HUNDRED NINETY
AND SUBSTANTIALLY ALL OF SUCH INDIVIDUALS MUST HAVE BEEN PREVIOUSLY
EMPLOYED BY THE ENTITY FROM WHOM SUCH TAXPAYER PURCHASED ITS ASSETS.
PROVIDED, FURTHER, HOWEVER, THAT THE CREDIT PROVIDED FOR HEREIN WITH
RESPECT TO THE TAXABLE YEAR, AND CARRYOVERS OF SUCH CREDIT TO THE TAXA-
BLE YEAR, DEDUCTED FROM THE TAX OTHERWISE DUE, MAY NOT, IN THE AGGRE-
GATE, EXCEED FIFTY PERCENT OF THE TAX IMPOSED UNDER SECTION FOURTEEN
HUNDRED FIFTY-FIVE COMPUTED WITHOUT REGARD TO ANY CREDIT PROVIDED FOR
UNDER THIS ARTICLE.
(5) THE CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED UNDER THIS
SUBSECTION FOR ANY TAXABLE YEAR SHALL NOT, IN THE AGGREGATE, REDUCE THE
TAX DUE FOR SUCH YEAR TO LESS THAN THE MINIMUM TAX FIXED BY SUBSECTION
(B) OF SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF
THE AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT, OR BOTH, ALLOWED
UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH
AMOUNT, OR IF ANY PART OF THE CREDIT OR CARRYOVERS OF SUCH CREDIT MAY
NOT BE DEDUCTED FROM THE TAX OTHERWISE DUE BY REASON OF THE FINAL
SENTENCE IN PARAGRAPH FOUR HEREOF, ANY AMOUNT OF CREDIT OR CARRYOVERS OF
SUCH CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER
TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S
TAX FOR SUCH YEAR OR YEARS.
(5-A) ANY CARRY OVER OF A CREDIT FROM PRIOR TAXABLE YEARS WILL NOT BE
ALLOWED IF AN EMPIRE ZONE RETENTION CERTIFICATE IS NOT ISSUED PURSUANT
TO SUBDIVISION (W) OF SECTION NINE HUNDRED FIFTY-NINE OF THE GENERAL
MUNICIPAL LAW TO THE EMPIRE ZONE ENTERPRISE WHICH IS THE BASIS OF THE
CREDIT.
(E-1) HIRE A VET CREDIT. (1) ALLOWANCE OF CREDIT. FOR TAXABLE YEARS
BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND NINETEEN AND BEFORE
JANUARY FIRST, TWO THOUSAND TWENTY-ONE, A TAXPAYER SHALL BE ALLOWED A
CREDIT, TO BE COMPUTED AS PROVIDED IN THIS SUBSECTION, AGAINST THE TAX
IMPOSED BY THIS ARTICLE, FOR HIRING AND EMPLOYING, FOR NOT LESS THAN ONE
YEAR AND FOR NOT LESS THAN THIRTY-FIVE HOURS EACH WEEK, A QUALIFIED
VETERAN WITHIN THE STATE. THE TAXPAYER MAY CLAIM THE CREDIT IN THE YEAR
IN WHICH THE QUALIFIED VETERAN COMPLETES ONE YEAR OF EMPLOYMENT BY THE
TAXPAYER. IF THE TAXPAYER CLAIMS THE CREDIT ALLOWED UNDER THIS
SUBSECTION, THE TAXPAYER MAY NOT USE THE HIRING OF A QUALIFIED VETERAN
THAT IS THE BASIS FOR THIS CREDIT IN THE BASIS OF ANY OTHER CREDIT
ALLOWED IN THIS ARTICLE.
(2) QUALIFIED VETERAN. A QUALIFIED VETERAN IS AN INDIVIDUAL:
S. 3456 60
(A) WHO SERVED ON ACTIVE DUTY IN THE UNITED STATES ARMY, NAVY, AIR
FORCE, MARINE CORPS, COAST GUARD OR THE RESERVES THEREOF, OR WHO SERVED
IN ACTIVE MILITARY SERVICE OF THE UNITED STATES AS A MEMBER OF THE ARMY
NATIONAL GUARD, AIR NATIONAL GUARD, NEW YORK GUARD OR NEW YORK NAVAL
MILITIA; WHO WAS RELEASED FROM ACTIVE DUTY BY GENERAL OR HONORABLE
DISCHARGE AFTER SEPTEMBER ELEVENTH, TWO THOUSAND ONE;
(B) WHO COMMENCES EMPLOYMENT BY THE QUALIFIED TAXPAYER ON OR AFTER
JANUARY FIRST, TWO THOUSAND FOURTEEN, AND BEFORE JANUARY FIRST, TWO
THOUSAND SEVENTEEN; AND
(C) WHO CERTIFIES BY SIGNED AFFIDAVIT, UNDER PENALTY OF PERJURY, THAT
HE OR SHE HAS NOT BEEN EMPLOYED FOR THIRTY-FIVE OR MORE HOURS DURING ANY
WEEK IN THE ONE HUNDRED EIGHTY DAY PERIOD IMMEDIATELY PRIOR TO HIS OR
HER EMPLOYMENT BY THE TAXPAYER.
(3) EMPLOYER PROHIBITION. AN EMPLOYER SHALL NOT DISCHARGE AN EMPLOYEE
AND HIRE A QUALIFYING VETERAN SOLELY FOR THE PURPOSE OF QUALIFYING FOR
THIS CREDIT.
(4) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL BE TEN PERCENT OF
THE TOTAL AMOUNT OF WAGES PAID TO THE QUALIFIED VETERAN DURING THE
VETERAN'S FIRST FULL YEAR OF EMPLOYMENT. PROVIDED, HOWEVER, THAT, IF THE
QUALIFIED VETERAN IS A DISABLED VETERAN, AS DEFINED IN PARAGRAPH (B) OF
SUBDIVISION ONE OF SECTION EIGHTY-FIVE OF THE CIVIL SERVICE LAW, THE
AMOUNT OF THE CREDIT SHALL BE FIFTEEN PERCENT OF THE TOTAL AMOUNT OF
WAGES PAID TO THE QUALIFIED VETERAN DURING THE VETERAN'S FIRST FULL YEAR
OF EMPLOYMENT. THE CREDIT ALLOWED PURSUANT TO THIS SUBSECTION SHALL NOT
EXCEED IN ANY TAXABLE YEAR, FIVE THOUSAND DOLLARS FOR ANY QUALIFIED
VETERAN AND FIFTEEN THOUSAND DOLLARS FOR ANY QUALIFIED VETERAN WHO IS A
DISABLED VETERAN.
(5) CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXA-
BLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE
AMOUNT PRESCRIBED IN PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR-
TEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
IT ALLOWABLE UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE TAX
TO SUCH AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE YEAR
MAY BE CARRIED OVER TO THE FOLLOWING THREE YEARS AND MAY BE DEDUCTED
FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
(F) CREDIT FOR EMPLOYMENT OF PERSONS WITH DISABILITIES. (1) ALLOWANCE
OF CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS HERE-
INAFTER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE, FOR EMPLOYING
WITHIN THE STATE A QUALIFIED EMPLOYEE.
(2) QUALIFIED EMPLOYEE. A QUALIFIED EMPLOYEE IS AN INDIVIDUAL:
(A) WHO IS CERTIFIED BY THE EDUCATION DEPARTMENT, OR IN THE CASE OF AN
INDIVIDUAL WHO IS BLIND OR VISUALLY HANDICAPPED, BY THE STATE AGENCY
RESPONSIBLE FOR PROVISION OF VOCATIONAL REHABILITATION SERVICES TO THE
BLIND AND VISUALLY HANDICAPPED: (I) AS A PERSON WITH A DISABILITY WHICH
CONSTITUTES OR RESULTS IN A SUBSTANTIAL HANDICAP TO EMPLOYMENT AND (II)
AS HAVING COMPLETED OR AS RECEIVING SERVICES UNDER AN INDIVIDUALIZED
WRITTEN REHABILITATION PLAN APPROVED BY THE EDUCATION DEPARTMENT OR
OTHER STATE AGENCY RESPONSIBLE FOR PROVIDING VOCATIONAL REHABILITATION
SERVICES TO SUCH INDIVIDUAL; AND
(B) WHO HAS WORKED ON A FULL-TIME BASIS FOR THE EMPLOYER WHO IS CLAIM-
ING THE CREDIT FOR AT LEAST ONE HUNDRED EIGHTY DAYS OR FOUR HUNDRED
HOURS.
(3) AMOUNT OF CREDIT. EXCEPT AS PROVIDED IN PARAGRAPH FOUR OF THIS
SUBSECTION, THE AMOUNT OF CREDIT SHALL BE THIRTY-FIVE PERCENT OF THE
FIRST SIX THOUSAND DOLLARS IN QUALIFIED FIRST-YEAR WAGES EARNED BY EACH
QUALIFIED EMPLOYEE. "QUALIFIED FIRST-YEAR WAGES" MEANS WAGES PAID OR
S. 3456 61
INCURRED BY THE TAXPAYER DURING THE TAXABLE YEAR TO QUALIFIED EMPLOYEES
WHICH ARE ATTRIBUTABLE, WITH RESPECT TO ANY SUCH EMPLOYEE, TO SERVICES
RENDERED DURING THE ONE-YEAR PERIOD BEGINNING WITH THE DAY THE EMPLOYEE
BEGINS WORK FOR THE TAXPAYER.
(4) CREDIT WHERE FEDERAL WORK OPPORTUNITY TAX CREDIT APPLIES. WITH
RESPECT TO ANY QUALIFIED EMPLOYEE WHOSE QUALIFIED FIRST-YEAR WAGES UNDER
PARAGRAPH THREE OF THIS SUBSECTION ALSO CONSTITUTE QUALIFIED FIRST-YEAR
WAGES FOR PURPOSES OF THE WORK OPPORTUNITY TAX CREDIT FOR VOCATIONAL
REHABILITATION REFERRALS UNDER SECTION FIFTY-ONE OF THE INTERNAL REVENUE
CODE, THE AMOUNT OF CREDIT UNDER THIS SUBSECTION SHALL BE THIRTY-FIVE
PERCENT OF THE FIRST SIX THOUSAND DOLLARS IN QUALIFIED SECOND-YEAR WAGES
EARNED BY EACH SUCH EMPLOYEE. "QUALIFIED SECOND-YEAR WAGES" MEANS WAGES
PAID OR INCURRED BY THE TAXPAYER DURING THE TAXABLE YEAR TO QUALIFIED
EMPLOYEES WHICH ARE ATTRIBUTABLE, WITH RESPECT TO ANY SUCH EMPLOYEES, TO
SERVICES RENDERED DURING THE ONE-YEAR PERIOD BEGINNING ONE YEAR AFTER
THE EMPLOYEE BEGINS WORK FOR THE TAXPAYER.
(5) CARRYOVER. THE CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL NOT, IN THE AGGREGATE, REDUCE
THE TAX DUE FOR SUCH YEAR TO LESS THAN THE MINIMUM TAX FIXED BY
SUBSECTION (B) OF SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE.
HOWEVER, IF THE AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT, OR BOTH,
ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO
SUCH AMOUNT, THEN ANY AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT THUS
NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING
YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR
OR YEARS.
(6) COORDINATION WITH FEDERAL WORK OPPORTUNITY TAX CREDIT. THE
PROVISIONS OF SECTIONS FIFTY-ONE AND FIFTY-TWO OF THE INTERNAL REVENUE
CODE, AS SUCH SECTIONS APPLIED ON OCTOBER FIRST, NINETEEN HUNDRED NINE-
TY-SIX, THAT APPLY TO THE WORK OPPORTUNITY TAX CREDIT FOR VOCATIONAL
REHABILITATION REFERRALS SHALL APPLY TO THE CREDIT UNDER THIS SUBSECTION
TO THE EXTENT THAT SUCH SECTIONS ARE CONSISTENT WITH THE SPECIFIC
PROVISIONS OF THIS SUBSECTION, PROVIDED THAT IN THE EVENT OF A CONFLICT
THE PROVISIONS OF THIS SUBSECTION SHALL CONTROL.
(G) ORDER OF CREDITS. CREDITS ALLOWABLE UNDER THIS ARTICLE WHICH
CANNOT BE CARRIED OVER AND WHICH ARE NOT REFUNDABLE SHALL BE DEDUCTED
FIRST. CREDITS ALLOWABLE UNDER THIS ARTICLE WHICH CAN BE CARRIED OVER,
AND CARRYOVERS OF SUCH CREDITS, SHALL BE DEDUCTED NEXT, AND AMONG SUCH
CREDITS, THOSE WHOSE CARRYOVER IS OF LIMITED DURATION SHALL BE DEDUCTED
BEFORE THOSE WHOSE CARRYOVER IS OF UNLIMITED DURATION; PROVIDED, HOWEV-
ER, THAT THE CREDIT ALLOWABLE UNDER SUBSECTION (E) OF THIS SECTION SHALL
BE DEDUCTED PRIOR TO ALL OTHER CREDITS DESCRIBED IN THIS SENTENCE.
CREDITS ALLOWABLE UNDER THIS ARTICLE WHICH ARE REFUNDABLE SHALL BE
DEDUCTED LAST.
(H) CREDITS FOR NEW YORK S CORPORATIONS. NOTWITHSTANDING THE
PROVISIONS OF THIS SECTION, NO CARRYOVER OF CREDIT ALLOWABLE IN A NEW
YORK C YEAR SHALL BE DEDUCTED FROM THE TAX OTHERWISE DUE UNDER THIS
ARTICLE IN A NEW YORK S YEAR, AND NO CREDIT ALLOWABLE IN A NEW YORK S
YEAR, OR CARRYOVER OF SUCH CREDIT, SHALL BE DEDUCTED FROM THE TAX
IMPOSED BY THIS ARTICLE. HOWEVER, A NEW YORK S YEAR SHALL BE TREATED AS
A TAXABLE YEAR FOR PURPOSES OF DETERMINING THE NUMBER OF TAXABLE YEARS
TO WHICH A CREDIT MAY BE CARRIED OVER UNDER THIS SECTION. NOTWITHSTAND-
ING THE FIRST SENTENCE OF THIS SUBSECTION, HOWEVER, THE CREDIT FOR THE
SPECIAL ADDITIONAL MORTGAGE RECORDING TAX SHALL BE ALLOWED AS PROVIDED
IN SUBSECTION (C) OF THIS SECTION, AND THE CARRYOVER OF ANY SUCH CREDIT
S. 3456 62
SHALL BE DETERMINED WITHOUT REGARD TO WHETHER THE CREDIT IS CARRIED FROM
A NEW YORK C YEAR TO A NEW YORK S YEAR OR VICE-VERSA.
(I) INVESTMENT TAX CREDIT (ITC). (1) A TAXPAYER SHALL BE ALLOWED A
CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED
BY THIS ARTICLE. PROVIDED, HOWEVER, A TAXPAYER SHALL NOT BE ALLOWED SUCH
CREDIT PROVIDED BY THIS PARAGRAPH UNLESS (I) EIGHTY PERCENT OR MORE OF
THE EMPLOYEES PERFORMING THE ADMINISTRATIVE AND SUPPORT FUNCTIONS
RESULTING FROM OR RELATED TO THE QUALIFYING USES OF SUCH EQUIPMENT ARE
LOCATED IN THIS STATE, OR (II) THE AVERAGE NUMBER OF EMPLOYEES THAT
PERFORM THE ADMINISTRATIVE AND SUPPORT FUNCTIONS RESULTING FROM OR
RELATED TO THE QUALIFYING USES OF SUCH EQUIPMENT AND ARE LOCATED IN THIS
STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT IS CLAIMED IS EQUAL
TO OR GREATER THAN NINETY-FIVE PERCENT OF THE AVERAGE NUMBER OF EMPLOY-
EES THAT PERFORM THESE FUNCTIONS AND ARE LOCATED IN THIS STATE DURING
THE THIRTY-SIX MONTHS IMMEDIATELY PRECEDING THE YEAR FOR WHICH THE CRED-
IT IS CLAIMED, OR (III) THE NUMBER OF EMPLOYEES LOCATED IN THIS STATE
DURING THE TAXABLE YEAR FOR WHICH THE CREDIT IS CLAIMED IS EQUAL TO OR
GREATER THAN NINETY PERCENT OF THE NUMBER OF EMPLOYEES LOCATED IN THIS
STATE ON DECEMBER THIRTY-FIRST, NINETEEN HUNDRED NINETY-EIGHT OR, IF THE
TAXPAYER WAS NOT A CALENDAR YEAR TAXPAYER IN NINETEEN HUNDRED NINETY-
EIGHT, THE LAST DAY OF ITS FIRST TAXABLE YEAR ENDING AFTER DECEMBER
THIRTY-FIRST, NINETEEN HUNDRED NINETY-EIGHT. IF THE TAXPAYER BECOMES
SUBJECT TO TAX IN THIS STATE AFTER THE TAXABLE YEAR BEGINNING IN NINE-
TEEN HUNDRED NINETY-EIGHT, THEN THE TAXPAYER IS NOT REQUIRED TO SATISFY
THE EMPLOYMENT TEST PROVIDED IN THE PRECEDING SENTENCE OF THIS SUBPARA-
GRAPH FOR ITS FIRST TAXABLE YEAR. FOR THE PURPOSES OF SUBPARAGRAPH (III)
OF THIS PARAGRAPH THE EMPLOYMENT TEST WILL BE BASED ON THE NUMBER OF
EMPLOYEES LOCATED IN THIS STATE ON THE LAST DAY OF THE FIRST TAXABLE
YEAR THE TAXPAYER IS SUBJECT TO TAX IN THIS STATE. IF THE USES OF THE
PROPERTY MUST BE AGGREGATED TO DETERMINE WHETHER THE PROPERTY IS PRINCI-
PALLY USED IN QUALIFYING USES, THEN EITHER EACH AFFILIATE USING THE
PROPERTY MUST SATISFY THIS EMPLOYMENT TEST OR THIS EMPLOYMENT TEST MUST
BE SATISFIED THROUGH THE AGGREGATION OF THE EMPLOYEES OF THE TAXPAYER,
ITS AFFILIATED REGULATED BROKER, DEALER, AND REGISTERED INVESTMENT
ADVISER USING THE PROPERTY. THE AMOUNT OF THE CREDIT SHALL BE THE
PERCENT PROVIDED FOR HEREIN BELOW OF THE INVESTMENT CREDIT BASE. THE
INVESTMENT CREDIT BASE IS THE COST OR OTHER BASIS FOR FEDERAL INCOME TAX
PURPOSES OF TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY,
INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS, DESCRIBED IN
PARAGRAPH TWO OF THIS SUBSECTION, LESS THE AMOUNT OF THE NONQUALIFIED
NONRECOURSE FINANCING WITH RESPECT TO SUCH PROPERTY TO THE EXTENT SUCH
FINANCING WOULD BE EXCLUDIBLE FROM THE CREDIT BASE PURSUANT TO SECTION
46(C)(8) OF THE INTERNAL REVENUE CODE (TREATING SUCH PROPERTY AS SECTION
THIRTY-EIGHT PROPERTY IRRESPECTIVE OF WHETHER OR NOT IT IN FACT CONSTI-
TUTES SECTION THIRTY-EIGHT PROPERTY). IF, AT THE CLOSE OF A TAXABLE
YEAR FOLLOWING THE TAXABLE YEAR IN WHICH SUCH PROPERTY WAS PLACED IN
SERVICE, THERE IS A NET DECREASE IN THE AMOUNT OF NONQUALIFIED NONREC-
OURSE FINANCING WITH RESPECT TO SUCH PROPERTY, SUCH NET DECREASE SHALL
BE TREATED AS IF IT WERE THE COST OR OTHER BASIS OF PROPERTY DESCRIBED
IN PARAGRAPH TWO OF THIS SUBSECTION ACQUIRED, CONSTRUCTED, RECONSTRUCTED
OR ERECTED DURING THE YEAR OF THE DECREASE IN THE AMOUNT OF NONQUALIFIED
NONRECOURSE FINANCING. IN THE CASE OF A COMBINED REPORT THE TERM INVEST-
MENT CREDIT BASE SHALL MEAN THE SUM OF THE INVESTMENT CREDIT BASE OF
EACH CORPORATION INCLUDED ON SUCH REPORT. THE PERCENTAGE TO BE USED TO
COMPUTE THE CREDIT ALLOWED PURSUANT TO THIS SUBSECTION SHALL BE
FOR TAXABLE YEARS BEGINNING AFTER
S. 3456 63
1997 .................................. FIVE PERCENT WITH
RESPECT TO THE FIRST THREE HUNDRED FIFTY MILLION DOLLARS OF
THE INVESTMENT CREDIT BASE, AND FOUR PERCENT WITH RESPECT TO
THE INVESTMENT CREDIT BASE IN EXCESS OF THREE HUNDRED FIFTY
MILLION DOLLARS.
(2) A CREDIT SHALL BE ALLOWED UNDER THIS SUBSECTION WITH RESPECT TO
TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY, INCLUDING BUILD-
INGS AND STRUCTURAL COMPONENTS OF BUILDINGS, WHICH ARE: DEPRECIABLE
PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE
CODE, HAVE A USEFUL LIFE OF FOUR YEARS OR MORE, ARE ACQUIRED BY PURCHASE
AS DEFINED IN SECTION ONE HUNDRED SEVENTY-NINE (D) OF THE INTERNAL
REVENUE CODE, HAVE A SITUS IN THIS STATE AND ARE (A) PRINCIPALLY USED IN
THE ORDINARY COURSE OF THE TAXPAYER'S TRADE OR BUSINESS AS A BROKER OR
DEALER IN CONNECTION WITH THE PURCHASE OR SALE (WHICH SHALL INCLUDE BUT
NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO, ASSUMPTION, OFFSET,
ASSIGNMENT, TERMINATION, OR TRANSFER) OF STOCKS, BONDS OR OTHER SECURI-
TIES AS DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (C) (2) OF THE
INTERNAL REVENUE CODE, OR OF COMMODITIES AS DEFINED IN SECTION FOUR
HUNDRED SEVENTY-FIVE (E) OF THE INTERNAL REVENUE CODE, OR (B) PRINCIPAL-
LY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S TRADE OR BUSINESS OF
PROVIDING INVESTMENT ADVISORY SERVICES FOR A REGULATED INVESTMENT COMPA-
NY AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-ONE OF THE INTERNAL REVENUE
CODE, OR LENDING, LOAN ARRANGEMENT OR LOAN ORIGINATION SERVICES TO
CUSTOMERS IN CONNECTION WITH THE PURCHASE OR SALE (WHICH SHALL INCLUDE
BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO, ASSUMPTION, OFFSET,
ASSIGNMENT, TERMINATION, OR TRANSFER) OF SECURITIES AS DEFINED IN
SECTION FOUR HUNDRED SEVENTY-FIVE (C) (2) OF THE INTERNAL REVENUE CODE.
FOR PURPOSES OF SUBPARAGRAPHS (A) AND (B) OF THIS PARAGRAPH, PROPERTY
PURCHASED BY A TAXPAYER AFFILIATED WITH A REGULATED BROKER, DEALER, OR
REGISTERED INVESTMENT ADVISER IS ALLOWED A CREDIT UNDER THIS SUBSECTION
IF THE PROPERTY IS USED BY ITS AFFILIATED REGULATED BROKER, DEALER, OR
REGISTERED INVESTMENT ADVISER IN ACCORDANCE WITH THIS SUBSECTION. FOR
PURPOSES OF DETERMINING IF THE PROPERTY IS PRINCIPALLY USED IN QUALIFY-
ING USES, THE USES BY THE TAXPAYER DESCRIBED IN SUBPARAGRAPHS (A) AND
(B) OF THIS PARAGRAPH MAY BE AGGREGATED. IN ADDITION, THE USES BY THE
TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER AND REGISTERED INVEST-
MENT ADVISER UNDER EITHER OR BOTH OF SUCH SUBPARAGRAPHS MAY BE AGGRE-
GATED.
(3) A TAXPAYER SHALL NOT BE ALLOWED A CREDIT UNDER THIS SUBSECTION
WITH RESPECT TO ANY PROPERTY DESCRIBED IN PARAGRAPH TWO OF THIS
SUBSECTION IF SUCH PROPERTY QUALIFIES FOR THE DEDUCTION ALLOWED UNDER
SUBSECTION (K) OF SECTION ONE THOUSAND FOUR HUNDRED FIFTY-THREE OF THIS
ARTICLE WHETHER OR NOT SUCH AMOUNT SHALL HAVE BEEN DEDUCTED.
(4) A TAXPAYER SHALL NOT BE ALLOWED A CREDIT UNDER THIS SUBSECTION
WITH RESPECT TO TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY,
INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS, WHICH IT
LEASES TO ANY OTHER PERSON OR CORPORATION EXCEPT WHERE A TAXPAYER LEASES
PROPERTY TO AN AFFILIATED BROKER, DEALER, OR REGISTERED INVESTMENT
ADVISER THAT USES SUCH PROPERTY IN ACCORDANCE WITH SUBPARAGRAPH (A) OR
(B) OF PARAGRAPH TWO OF THIS SUBSECTION. FOR PURPOSES OF THE PRECEDING
SENTENCE, ANY CONTRACT OR AGREEMENT TO LEASE OR RENT OR FOR A LICENSE TO
USE SUCH PROPERTY SHALL BE CONSIDERED A LEASE.
(5) EXCEPT AS OTHERWISE PROVIDED IN THIS PARAGRAPH, THE CREDIT ALLOWED
UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE
FOR SUCH YEAR TO LESS THAN THE DOLLAR AMOUNT FIXED AS A MINIMUM TAX BY
SUBSECTION (B) OF SECTION ONE THOUSAND FOUR HUNDRED FIFTY-FIVE OF THIS
S. 3456 64
ARTICLE. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWABLE UNDER THIS
SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY
AMOUNT OF CREDIT ALLOWED FOR A TAXABLE YEAR MAY BE CARRIED OVER TO THE
FIFTEEN TAXABLE YEARS NEXT FOLLOWING SUCH TAXABLE YEAR AND MAY BE
DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. IN LIEU OF SUCH
CARRYOVER, ANY SUCH TAXPAYER WHICH QUALIFIES AS A NEW BUSINESS UNDER
PARAGRAPH EIGHT OF THIS SUBSECTION MAY ELECT TO TREAT THE AMOUNT OF SUCH
CARRYOVER AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORD-
ANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS
CHAPTER, PROVIDED, HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION
ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER NOTWITHSTANDING NO INTEREST
SHALL BE PAID THEREON.
(6) AT THE OPTION OF THE TAXPAYER AN ELIGIBLE BUSINESS FACILITY FOR
WHICH A CREDIT IS ALLOWED UNDER SUBSECTION (B) OF THIS SECTION MAY BE
TREATED AS PROPERTY (A) PRINCIPALLY USED IN THE ORDINARY COURSE OF THE
TAXPAYER'S TRADE OR BUSINESS AS A BROKER OR DEALER IN CONNECTION WITH
THE PURCHASE OR SALE (WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE
ISSUANCE, ENTERING INTO, ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR
TRANSFER) OF STOCKS, BONDS OR OTHER SECURITIES AS DEFINED IN SECTION
FOUR HUNDRED SEVENTY-FIVE (C) (2) OF THE INTERNAL REVENUE CODE, OR OF
COMMODITIES AS DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (E) OF THE
INTERNAL REVENUE CODE, OR (B) PRINCIPALLY USED IN THE ORDINARY COURSE OF
THE TAXPAYER'S TRADE OR BUSINESS OF PROVIDING INVESTMENT ADVISORY
SERVICES FOR A REGULATED INVESTMENT COMPANY AS DEFINED IN SECTION EIGHT
HUNDRED FIFTY-ONE OF THE INTERNAL REVENUE CODE, OR LENDING, LOAN
ARRANGEMENT OR LOAN ORIGINATION SERVICES TO CUSTOMERS IN CONNECTION WITH
THE PURCHASE OR SALE (WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE
ISSUANCE, ENTERING INTO, ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR
TRANSFER) OF SECURITIES AS DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE
(C) (2) OF THE INTERNAL REVENUE CODE PROVIDED THE PROPERTY OTHERWISE
QUALIFIES UNDER PARAGRAPH TWO OF THIS SUBSECTION, IN WHICH EVENT A CRED-
IT SHALL NOT BE ALLOWED UNDER SUBSECTION (B) OF THIS SECTION.
(7)(A) WITH RESPECT TO PROPERTY WHICH IS DEPRECIABLE PURSUANT TO
SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE CODE BUT IS NOT
SUBJECT TO THE PROVISIONS OF SECTION ONE HUNDRED SIXTY-EIGHT OF SUCH
CODE AND WHICH IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO
THE END OF THE TAXABLE YEAR IN WHICH THE CREDIT IS TO BE TAKEN, THE
AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF THE CREDIT PROVIDED FOR IN
THIS SUBSECTION WHICH REPRESENTS THE RATIO WHICH THE MONTHS OF QUALIFIED
USE BEAR TO THE MONTHS OF USEFUL LIFE. IF PROPERTY ON WHICH CREDIT HAS
BEEN TAKEN IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO THE
END OF ITS USEFUL LIFE, THE DIFFERENCE BETWEEN THE CREDIT TAKEN AND THE
CREDIT ALLOWED FOR ACTUAL USE MUST BE ADDED BACK IN THE YEAR OF DISPOSI-
TION. PROVIDED, HOWEVER, IF SUCH PROPERTY IS DISPOSED OF OR CEASES TO BE
IN QUALIFIED USE AFTER IT HAS BEEN IN QUALIFIED USE FOR MORE THAN TWELVE
CONSECUTIVE YEARS, IT SHALL NOT BE NECESSARY TO ADD BACK THE CREDIT AS
PROVIDED IN THIS SUBPARAGRAPH. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL
USE SHALL BE DETERMINED BY MULTIPLYING THE ORIGINAL CREDIT BY THE RATIO
WHICH THE MONTHS OF QUALIFIED USE BEAR TO THE MONTHS OF USEFUL LIFE. FOR
PURPOSES OF THIS SUBPARAGRAPH, USEFUL LIFE OF PROPERTY SHALL BE THE SAME
AS THE TAXPAYER USES FOR DEPRECIATION PURPOSES WHEN COMPUTING HIS FEDER-
AL INCOME TAX LIABILITY.
(B) EXCEPT WITH RESPECT TO THAT PROPERTY TO WHICH SUBPARAGRAPH (D) OF
THIS PARAGRAPH APPLIES, WITH RESPECT TO THREE-YEAR PROPERTY, AS DEFINED
IN SUBSECTION (E) OF SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL
REVENUE CODE, WHICH IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE
S. 3456 65
PRIOR TO THE END OF THE TAXABLE YEAR IN WHICH THE CREDIT IS TO BE TAKEN,
THE AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF THE CREDIT PROVIDED
FOR IN THIS SUBSECTION WHICH REPRESENTS THE RATIO WHICH THE MONTHS OF
QUALIFIED USE BEAR TO THIRTY-SIX. IF PROPERTY ON WHICH CREDIT HAS BEEN
TAKEN IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO THE END
OF THIRTY-SIX MONTHS, THE DIFFERENCE BETWEEN THE CREDIT TAKEN AND THE
CREDIT ALLOWED FOR ACTUAL USE MUST BE ADDED BACK IN THE YEAR OF DISPOSI-
TION. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL USE SHALL BE DETERMINED BY
MULTIPLYING THE ORIGINAL CREDIT BY THE RATIO WHICH THE MONTHS OF QUALI-
FIED USE BEAR TO THIRTY-SIX.
(C) EXCEPT WITH RESPECT TO THAT PROPERTY TO WHICH SUBPARAGRAPH (D) OF
THIS PARAGRAPH APPLIES, WITH RESPECT TO PROPERTY SUBJECT TO THE
PROVISIONS OF SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL REVENUE
CODE, OTHER THAN THREE-YEAR PROPERTY AS DEFINED IN SUBSECTION (E) OF
SUCH SECTION ONE HUNDRED SIXTY-EIGHT WHICH IS DISPOSED OF OR CEASES TO
BE IN QUALIFIED USE PRIOR TO THE END OF THE TAXABLE YEAR IN WHICH THE
CREDIT IS TO BE TAKEN, THE AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF
THE CREDIT PROVIDED FOR IN THIS SUBSECTION WHICH REPRESENTS THE RATIO
WHICH THE MONTHS OF QUALIFIED USE BEAR TO SIXTY. IF PROPERTY ON WHICH
CREDIT HAS BEEN TAKEN IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE
PRIOR TO THE END OF SIXTY MONTHS, THE DIFFERENCE BETWEEN THE CREDIT
TAKEN AND THE CREDIT ALLOWED FOR ACTUAL USE MUST BE ADDED BACK IN THE
YEAR OF DISPOSITION. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL USE SHALL
BE DETERMINED BY MULTIPLYING THE ORIGINAL CREDIT BY THE RATIO WHICH THE
MONTHS OF QUALIFIED USE BEAR TO SIXTY.
(D) WITH RESPECT TO ANY PROPERTY TO WHICH SECTION ONE HUNDRED SIXTY-
EIGHT OF THE INTERNAL REVENUE CODE APPLIES, WHICH IS A BUILDING OR A
STRUCTURAL COMPONENT OF A BUILDING AND WHICH IS DISPOSED OF OR CEASES TO
BE IN A QUALIFIED USE PRIOR TO THE END OF THE TAXABLE YEAR IN WHICH THE
CREDIT IS TO BE TAKEN, THE AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF
THE CREDIT PROVIDED FOR IN THIS SUBSECTION WHICH REPRESENTS THE RATIO
WHICH THE MONTHS OF QUALIFIED USE BEAR TO THE TOTAL NUMBER OF MONTHS
OVER WHICH THE TAXPAYER CHOOSES TO DEDUCT THE PROPERTY UNDER THE INTER-
NAL REVENUE CODE. IF PROPERTY ON WHICH CREDIT HAS BEEN TAKEN IS DISPOSED
OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO THE END OF THE PERIOD OVER
WHICH THE TAXPAYER CHOOSES TO DEDUCT THE PROPERTY UNDER THE INTERNAL
REVENUE CODE, THE DIFFERENCE BETWEEN THE CREDIT TAKEN AND THE CREDIT
ALLOWED FOR ACTUAL USE MUST BE ADDED BACK IN THE YEAR OF DISPOSITION.
PROVIDED, HOWEVER, IF SUCH PROPERTY IS DISPOSED OF OR CEASES TO BE IN
QUALIFIED USE AFTER IT HAS BEEN IN QUALIFIED USE FOR MORE THAN TWELVE
CONSECUTIVE YEARS, IT SHALL NOT BE NECESSARY TO ADD BACK THE CREDIT AS
PROVIDED IN THIS SUBPARAGRAPH. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL
USE SHALL BE DETERMINED BY MULTIPLYING THE ORIGINAL CREDIT BY THE RATIO
WHICH THE MONTHS OF QUALIFIED USE BEAR TO THE TOTAL NUMBER OF MONTHS
OVER WHICH THE TAXPAYER CHOOSES TO DEDUCT THE PROPERTY UNDER THE INTER-
NAL REVENUE CODE.
(E) FOR TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST, NINETEEN
HUNDRED NINETY-EIGHT THE AMOUNT REQUIRED TO BE ADDED BACK PURSUANT TO
THIS PARAGRAPH SHALL BE AUGMENTED BY AN AMOUNT EQUAL TO THE PRODUCT OF
SUCH AMOUNT AND THE UNDERPAYMENT RATE OF INTEREST (WITHOUT REGARD TO
COMPOUNDING), SET BY THE COMMISSIONER PURSUANT TO SUBSECTION (E) OF
SECTION ONE THOUSAND NINETY-SIX OF THIS CHAPTER, IN EFFECT ON THE LAST
DAY OF THE TAXABLE YEAR.
(F) IF, AS OF THE CLOSE OF THE TAXABLE YEAR, THERE IS A NET INCREASE
WITH RESPECT TO THE TAXPAYER IN THE AMOUNT OF NONQUALIFIED NONRECOURSE
FINANCING (WITHIN THE MEANING OF SECTION 46(C)(8) OF THE INTERNAL REVEN-
S. 3456 66
UE CODE) WITH RESPECT TO ANY PROPERTY WITH RESPECT TO WHICH THE CREDIT
UNDER THIS SUBSECTION WAS LIMITED BASED ON ATTRIBUTABLE NONQUALIFIED
NONRECOURSE FINANCING, THEN AN AMOUNT EQUAL TO THE DECREASE IN SUCH
CREDIT WHICH WOULD HAVE RESULTED FROM REDUCING, BY THE AMOUNT OF SUCH
NET INCREASE, THE COST OR OTHER BASIS TAKEN INTO ACCOUNT WITH RESPECT TO
SUCH PROPERTY MUST BE ADDED BACK IN SUCH TAXABLE YEAR. THE AMOUNT OF
NONQUALIFIED NONRECOURSE FINANCING SHALL NOT BE TREATED AS INCREASED BY
REASON OF A TRANSFER OF (OR AGREEMENT TO TRANSFER) ANY EVIDENCE OF AN
INDEBTEDNESS IF SUCH TRANSFER OCCURS (OR SUCH AGREEMENT IS ENTERED INTO)
MORE THAN ONE YEAR AFTER THE DATE SUCH INDEBTEDNESS WAS INCURRED.
(8) FOR PURPOSES OF PARAGRAPH FIVE OF THIS SUBSECTION, A NEW BUSINESS
SHALL INCLUDE ANY CORPORATION, EXCEPT A CORPORATION WHICH:
(A) OVER FIFTY PERCENT OF THE NUMBER OF SHARES OF STOCK ENTITLING THE
HOLDERS THEREOF TO VOTE FOR THE ELECTION OF DIRECTORS OR TRUSTEES IS
OWNED OR CONTROLLED, EITHER DIRECTLY OR INDIRECTLY, BY A TAXPAYER
SUBJECT TO TAX UNDER THIS ARTICLE; SECTION ONE HUNDRED EIGHTY-THREE, ONE
HUNDRED EIGHTY-FOUR OR ONE HUNDRED EIGHTY-FIVE OF ARTICLE NINE; ARTICLE
NINE-A OR ARTICLE THIRTY-THREE OF THIS CHAPTER; OR
(B) IS SUBSTANTIALLY SIMILAR IN OPERATION AND IN OWNERSHIP TO A BUSI-
NESS ENTITY (OR ENTITIES) TAXABLE, OR PREVIOUSLY TAXABLE, UNDER THIS
ARTICLE; SECTION ONE HUNDRED EIGHTY-THREE, ONE HUNDRED EIGHTY-FOUR OR
ONE HUNDRED EIGHTY-FIVE OF ARTICLE NINE; ARTICLE NINE-A OR ARTICLE THIR-
TY-THREE OF THIS CHAPTER; ARTICLE TWENTY-THREE OF THIS CHAPTER OR WHICH
WOULD HAVE BEEN SUBJECT TO TAX UNDER SUCH ARTICLE TWENTY-THREE (AS SUCH
ARTICLE WAS IN EFFECT ON JANUARY FIRST, NINETEEN HUNDRED EIGHTY) OR THE
INCOME (OR LOSSES) OF WHICH IS (OR WAS) INCLUDABLE UNDER ARTICLE TWEN-
TY-TWO OF THIS CHAPTER WHEREBY THE INTENT AND PURPOSE OF THIS PARAGRAPH
AND PARAGRAPH FIVE OF THIS SUBSECTION WITH RESPECT TO REFUNDING OF CRED-
IT TO NEW BUSINESS WOULD BE EVADED; OR
(C) HAS BEEN SUBJECT TO TAX UNDER THIS ARTICLE FOR MORE THAN FIVE
TAXABLE YEARS (EXCLUDING SHORT TAXABLE YEARS).
(9)(A)(I) IF A TAXPAYER IS REQUIRED BY PARAGRAPH SEVEN OF THIS
SUBSECTION TO ADD BACK A PORTION OF THE CREDIT TAKEN BECAUSE PROPERTY
WAS DESTROYED OR CEASED TO BE IN QUALIFIED USE AS A DIRECT RESULT OF THE
SEPTEMBER ELEVENTH, TWO THOUSAND ONE TERRORIST ATTACKS, SUCH TAXPAYER
MAY ELECT TO DEFER THE AMOUNT TO BE RECAPTURED FOR ALL SUCH PROPERTY TO
THE TAXABLE YEAR NEXT SUCCEEDING THE TAXABLE YEAR IN WHICH THE
DESTRUCTION OR CESSATION OF QUALIFIED USE OCCURRED. THE TAXABLE YEAR IN
WHICH THE DESTRUCTION OR CESSATION OF QUALIFIED USE OCCURRED SHALL BE
HEREINAFTER REFERRED TO AS THE "RECAPTURE EVENT TAXABLE YEAR". IF THE
TAXPAYER'S TOTAL EMPLOYMENT NUMBER IN THE STATE ON THE LAST DAY OF THE
TAXABLE YEAR NEXT SUCCEEDING THE RECAPTURE EVENT TAXABLE YEAR IS A
SIGNIFICANT PERCENTAGE OF THE TAXPAYER'S AVERAGE TOTAL EMPLOYMENT NUMBER
IN THE STATE FOR THE TAXPAYER'S RECAPTURE EVENT TAXABLE YEAR AND THE TWO
TAXABLE YEARS IMMEDIATELY PRECEDING THE RECAPTURE EVENT TAXABLE YEAR,
THEN THE TAXPAYER SHALL NOT BE REQUIRED TO RECAPTURE ANY CREDIT WITH
RESPECT TO SUCH PROPERTY. IF THE TAXPAYER'S TOTAL EMPLOYMENT NUMBER IN
THE STATE ON THE LAST DAY OF THE TAXABLE YEAR NEXT SUCCEEDING THE RECAP-
TURE EVENT TAXABLE YEAR IS NOT A SIGNIFICANT PERCENTAGE OF THE TAXPAY-
ER'S AVERAGE TOTAL EMPLOYMENT NUMBER IN THE STATE FOR THE TAXPAYER'S
RECAPTURE EVENT TAXABLE YEAR AND THE TWO TAXABLE YEARS IMMEDIATELY
PRECEDING THE RECAPTURE EVENT TAXABLE YEAR, THE TAXPAYER SHALL BE
REQUIRED TO RECAPTURE THE PORTION OF THE CREDIT TAKEN UNDER THIS
SUBSECTION, AS REQUIRED BY PARAGRAPH SEVEN OF THIS SUBSECTION, FOR ALL
OF ITS PROPERTY DESTROYED OR WHICH CEASED TO BE IN QUALIFIED USE AS A
DIRECT RESULT OF THE SEPTEMBER ELEVENTH, TWO THOUSAND ONE TERRORIST
S. 3456 67
ATTACKS. THE AMOUNT REQUIRED TO BE RECAPTURED SHALL BE AUGMENTED AS
REQUIRED PURSUANT TO SUBPARAGRAPH (E) OF PARAGRAPH SEVEN OF THIS
SUBSECTION BY USING AN INTEREST RATE EQUAL TO TWO TIMES THE RATE OF
INTEREST SPECIFIED IN SUCH SUBPARAGRAPH SEVEN APPLICABLE FOR THE TAXABLE
YEAR IN WHICH THE RECAPTURE OCCURS.
(II) THE TAXPAYER'S TOTAL EMPLOYMENT NUMBER SHALL INCLUDE ALL EMPLOY-
EES OF THE TAXPAYER EMPLOYED FULL-TIME BY THE TAXPAYER IN THE STATE. THE
AVERAGE TOTAL EMPLOYMENT NUMBER FOR THE RECAPTURE EVENT TAXABLE YEAR AND
THE TWO TAXABLE YEARS IMMEDIATELY PRECEDING THE RECAPTURE EVENT TAXABLE
YEAR SHALL BE COMPUTED BY DETERMINING THE TAXPAYER'S TOTAL EMPLOYMENT
NUMBER ON THE THIRTY-FIRST DAY OF MARCH, THE THIRTIETH DAY OF JUNE, THE
THIRTIETH DAY OF SEPTEMBER AND THE THIRTY-FIRST DAY OF DECEMBER DURING
THE APPLICABLE TAXABLE YEARS, ADDING TOGETHER THE NUMBER OF SUCH INDI-
VIDUALS DETERMINED TO BE SO EMPLOYED ON EACH OF SUCH DATES AND DIVIDING
THE SUM SO OBTAINED BY THE NUMBER OF SUCH DATES OCCURRING WITHIN SUCH
APPLICABLE TAXABLE YEARS. HOWEVER, IN THE CASE OF THE TAXABLE YEAR WHICH
INCLUDED SEPTEMBER ELEVENTH, TWO THOUSAND ONE, THE AVERAGE TOTAL EMPLOY-
MENT NUMBER FOR SUCH TAXABLE YEAR SHALL BE DETERMINED BY USING THE TOTAL
EMPLOYMENT NUMBER ON SEPTEMBER FIRST, TWO THOUSAND ONE IN LIEU OF
SEPTEMBER THIRTIETH, TWO THOUSAND ONE AND, IF SUCH TAXABLE YEAR INCLUDED
DECEMBER THIRTY-FIRST, TWO THOUSAND ONE, BY EXCLUDING THE TOTAL EMPLOY-
MENT NUMBER ON DECEMBER THIRTY-FIRST, TWO THOUSAND ONE.
(B) IN LIEU OF SUBPARAGRAPH (A) OF THIS PARAGRAPH, A TAXPAYER MAY
ELECT TO RECAPTURE THE PORTION OF THE CREDIT TAKEN UNDER THIS
SUBSECTION, AS REQUIRED BY PARAGRAPH SEVEN OF THIS SUBSECTION, FOR ALL
OF ITS PROPERTY DESTROYED OR WHICH CEASED TO BE IN QUALIFIED USE AS A
DIRECT RESULT OF THE SEPTEMBER ELEVENTH, TWO THOUSAND ONE TERRORIST
ATTACKS, IN THE TAXABLE YEAR IN WHICH THE DESTRUCTION OR CESSATION OF
QUALIFIED USE OCCURRED. IF THE TAXPAYER MAKES SUCH ELECTION AND ACQUIRES
PROPERTY (HEREINAFTER REFERRED TO AS "REPLACEMENT PROPERTY") TO REPLACE
ANY PROPERTY DESTROYED AS A DIRECT RESULT OF THE SEPTEMBER ELEVENTH, TWO
THOUSAND ONE TERRORIST ATTACKS (REGARDLESS OF WHEN SUCH PROPERTY WAS
PLACED IN SERVICE AND WHETHER A CREDIT WAS CLAIMED ON THAT PROPERTY
PURSUANT TO THIS SUBSECTION), AND SUCH REPLACEMENT PROPERTY IS SIMILAR
OR RELATED IN SERVICE OR USE TO SUCH DESTROYED PROPERTY, THE INVESTMENT
CREDIT BASE OF THE REPLACEMENT PROPERTY SHALL BE DETERMINED WITHOUT
REGARD TO ANY BASIS REDUCTION REQUIRED PURSUANT TO SECTION 1033 OF THE
INTERNAL REVENUE CODE.
(C) THE ELECTION MADE BY THE TAXPAYER UNDER SUBPARAGRAPH (A) OR (B) OF
THIS PARAGRAPH SHALL BE MADE IN THE MANNER AND FORM PRESCRIBED BY THE
COMMISSIONER.
(D) A TAXPAYER, OVER FIFTY PERCENT OF WHOSE EMPLOYEES DIED AS A DIRECT
RESULT OF THE SEPTEMBER ELEVENTH, TWO THOUSAND ONE TERRORIST ATTACKS,
MAY MAKE THE ELECTION PROVIDED FOR IN SUBPARAGRAPH (A) OF THIS PARA-
GRAPH, AND SHALL NOT BE REQUIRED TO RECAPTURE ANY CREDIT WITH RESPECT TO
PROPERTY WHICH WAS DESTROYED OR WHICH CEASED TO BE IN QUALIFIED USE AS A
DIRECT RESULT OF SUCH ATTACKS, WHETHER OR NOT IT MEETS THE EMPLOYMENT
TEST SPECIFIED IN CLAUSE (I) OF SUBPARAGRAPH (A) OF THIS PARAGRAPH.
(J) CREDIT FOR PURCHASE OF AN AUTOMATED EXTERNAL DEFIBRILLATOR. A
TAXPAYER SHALL BE ALLOWED A CREDIT AS HEREINAFTER PROVIDED, AGAINST THE
TAX IMPOSED BY THIS ARTICLE FOR THE PURCHASE, OTHER THAN FOR RESALE, OF
AN AUTOMATED EXTERNAL DEFIBRILLATOR, AS SUCH TERM IS DEFINED IN SECTION
THREE THOUSAND-B OF THE PUBLIC HEALTH LAW. THE AMOUNT OF THE CREDIT
SHALL BE THE COST TO THE TAXPAYER OF AUTOMATED EXTERNAL DEFIBRILLATORS
PURCHASED DURING THE TAXABLE YEAR, SUCH CREDIT NOT TO EXCEED FIVE
HUNDRED DOLLARS WITH RESPECT TO EACH UNIT PURCHASED. THE CREDIT ALLOWED
S. 3456 68
UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE
FOR SUCH YEAR TO LESS THAN THE MINIMUM TAX FIXED BY SUBSECTION (B) OF
SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE.
(K) (1) A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED
BY THIS ARTICLE EQUAL TO TWENTY PERCENT OF THE PREMIUM PAID DURING THE
TAXABLE YEAR FOR LONG-TERM CARE INSURANCE. IN ORDER TO QUALIFY FOR SUCH
CREDIT, THE TAXPAYER'S PREMIUM PAYMENT MUST BE FOR THE PURCHASE OF OR
FOR CONTINUING COVERAGE UNDER A LONG-TERM CARE INSURANCE POLICY THAT
QUALIFIES FOR SUCH CREDIT PURSUANT TO SECTION ONE THOUSAND ONE HUNDRED
SEVENTEEN OF THE INSURANCE LAW.
(2) IN NO EVENT SHALL THE CREDIT HEREIN PROVIDED FOR, AND CARRYOVERS
OF SUCH CREDIT, BE ALLOWED IN AN AMOUNT WHICH WILL REDUCE THE TAX PAYA-
BLE TO LESS THAN THE DOLLAR AMOUNT FIXED AS A MINIMUM TAX BY SUBSECTION
(B) OF SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. IF, HOWEVER,
THE AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT, OR BOTH, ALLOWABLE
UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH
AMOUNT, ANY AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT THUS NOT
DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING
YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR
OR YEARS.
(L) LOW-INCOME HOUSING CREDIT. (1) ALLOWANCE OF CREDIT. A TAXPAYER
SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE WITH
RESPECT TO THE OWNERSHIP OF ELIGIBLE LOW-INCOME BUILDINGS, COMPUTED AS
PROVIDED IN SECTION EIGHTEEN OF THIS CHAPTER.
(2) APPLICATION OF CREDIT. THE CREDIT AND CARRYOVERS OF SUCH CREDIT
ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL NOT, IN THE
AGGREGATE, REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE MINIMUM TAX
FIXED BY SUBSECTION (B) OF SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS
ARTICLE. HOWEVER, IF THE AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT,
OR BOTH, ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE
TAX TO SUCH AMOUNT, THEN ANY AMOUNT OF CREDIT OR CARRYOVERS OF SUCH
CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO
THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX
FOR SUCH YEAR OR YEARS.
(3) CREDIT RECAPTURE. FOR PROVISIONS REQUIRING RECAPTURE OF CREDIT,
SEE SUBDIVISION (B) OF SECTION EIGHTEEN OF THIS CHAPTER.
(M) GREEN BUILDING CREDIT. (1) ALLOWANCE OF CREDIT. A TAXPAYER SHALL
BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION NINETEEN OF
THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
(2) CARRYOVER. THE CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL NOT, IN THE AGGREGATE, REDUCE
THE TAX DUE FOR SUCH YEAR TO LESS THAN THE MINIMUM TAX FIXED BY
SUBSECTION (B) OF SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE.
HOWEVER, IF THE AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT, OR BOTH,
ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE TAX TO
SUCH AMOUNT, THEN ANY AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT THUS
NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING
YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR
OR YEARS.
(N) CREDIT FOR TRANSPORTATION IMPROVEMENT CONTRIBUTIONS. (1) ALLOWANCE
OF CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS
PROVIDED IN SECTION TWENTY OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY
THIS ARTICLE.
(2) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBSECTION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE MINIMUM TAX FIXED BY SUBSECTION (B) OF SECTION FOURTEEN HUNDRED
S. 3456 69
FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED
UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH
AMOUNT, THEN ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE
YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND
EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS OF
SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
(3) CREDIT RECAPTURE. FOR PROVISIONS REQUIRING RECAPTURE OF CREDIT,
SEE SUBDIVISION (C) OF SECTION TWENTY OF THIS CHAPTER.
(O) QEZE CREDIT FOR REAL PROPERTY TAXES. (1) ALLOWANCE OF CREDIT. A
TAXPAYER WHICH IS A QUALIFIED EMPIRE ZONE ENTERPRISE SHALL BE ALLOWED A
CREDIT FOR ELIGIBLE REAL PROPERTY TAXES, TO BE COMPUTED AS PROVIDED IN
SECTION FIFTEEN OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTI-
CLE.
(2) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBSECTION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE MINIMUM TAX FIXED BY SUBSECTION (B) OF SECTION FOURTEEN HUNDRED
FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED
UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH
AMOUNT, THEN ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE
YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND
EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS OF
SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
(P) QEZE TAX REDUCTION CREDIT. (1) ALLOWANCE OF CREDIT. A TAXPAYER
WHICH IS A QUALIFIED EMPIRE ZONE ENTERPRISE SHALL BE ALLOWED A QEZE TAX
REDUCTION CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION SIXTEEN OF THIS
CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
(2) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBSECTION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE MINIMUM TAX FIXED BY PARAGRAPH THREE OF SUBSECTION (B) OF
SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE.
(Q) BROWNFIELD REDEVELOPMENT TAX CREDIT. (1) ALLOWANCE OF CREDIT. A
TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN
SECTION TWENTY-ONE OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS
ARTICLE.
(2) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBSECTION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE MINIMUM TAX FIXED BY PARAGRAPH THREE OF SUBSECTION (B) OF
SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF THE
AMOUNT OF CREDITS ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR
REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE
IN SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE
CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE
THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS
OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
(R) REMEDIATED BROWNFIELD CREDIT FOR REAL PROPERTY TAXES FOR QUALIFIED
SITES. (1) ALLOWANCE OF CREDIT. A TAXPAYER WHICH IS A DEVELOPER OF A
QUALIFIED SITE SHALL BE ALLOWED A CREDIT FOR ELIGIBLE REAL PROPERTY
TAXES, TO BE COMPUTED AS PROVIDED IN SUBDIVISION (B) OF SECTION TWENTY-
TWO OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE. FOR
PURPOSES OF THIS SUBSECTION, THE TERMS "QUALIFIED SITE" AND "DEVELOPER"
S. 3456 70
SHALL HAVE THE SAME MEANING AS SET FORTH IN PARAGRAPHS TWO AND THREE,
RESPECTIVELY, OF SUBDIVISION (A) OF SECTION TWENTY-TWO OF THIS CHAPTER.
(2) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBSECTION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE MINIMUM TAX FIXED BY PARAGRAPH THREE OF SUBSECTION (B) OF
SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF THE
AMOUNT OF CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR
REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE
IN SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE
CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE
THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS
OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
(S) ENVIRONMENTAL REMEDIATION INSURANCE CREDIT. (1) ALLOWANCE OF CRED-
IT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN
SECTION TWENTY-THREE OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS
ARTICLE.
(2) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE MINIMUM TAX FIXED BY PARAGRAPH THREE OF SUBSECTION (B) OF
SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF THE
AMOUNT OF CREDITS ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR
REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE
IN SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE
CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE
THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS
OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
(T) SECURITY TRAINING TAX CREDIT. (1) ALLOWANCE OF CREDIT. A TAXPAYER
SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION TWEN-
TY-SIX OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
(2) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBSECTION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE MINIMUM TAX FIXED BY PARAGRAPH THREE OF SUBSECTION (B) OF
SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF THE
AMOUNT OF CREDITS ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR
REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE
IN SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE
CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE
THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS
OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
(U) CREDIT FOR FUEL CELL ELECTRIC GENERATING EQUIPMENT EXPENDITURES.
(1) ALLOWANCE OF CREDIT. FOR TAXABLE YEARS BEGINNING BEFORE JANUARY
FIRST, TWO THOUSAND NINE, A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST
THE TAX IMPOSED BY THIS ARTICLE, EQUAL TO ITS QUALIFIED FUEL CELL ELEC-
TRIC GENERATING EQUIPMENT EXPENDITURES. THIS CREDIT SHALL NOT EXCEED ONE
THOUSAND FIVE HUNDRED DOLLARS PER GENERATING UNIT WITH RESPECT TO ANY
TAXABLE YEAR. THE CREDIT PROVIDED FOR IN THIS SUBSECTION SHALL BE
ALLOWED WITH RESPECT TO THE TAXABLE YEAR IN WHICH THE FUEL CELL ELECTRIC
GENERATING EQUIPMENT IS PLACED IN SERVICE.
(2) QUALIFIED FUEL CELL ELECTRIC GENERATING EQUIPMENT EXPENDITURES.
(A) QUALIFIED FUEL CELL ELECTRIC GENERATING EQUIPMENT EXPENDITURES ARE
THE COSTS, INCURRED ON OR AFTER JULY FIRST, TWO THOUSAND FIVE, ASSOCI-
ATED WITH THE PURCHASE OF ON-SITE ELECTRICITY GENERATION UNITS UTILIZING
PROTON EXCHANGE MEMBRANE FUEL CELLS, PROVIDING A RATED BASELOAD CAPACITY
S. 3456 71
OF NO LESS THAN ONE KILOWATT AND NO MORE THAN ONE HUNDRED KILOWATTS OF
ELECTRICITY, WHICH ARE LOCATED IN THIS STATE AT THE TIME THE QUALIFIED
FUEL CELL ELECTRIC GENERATING EQUIPMENT IS PLACED IN SERVICE.
(B) QUALIFIED FUEL CELL ELECTRIC GENERATING EQUIPMENT EXPENDITURES
SHALL ALSO INCLUDE COSTS, INCURRED ON OR AFTER JULY FIRST, TWO THOUSAND
FIVE, FOR MATERIALS, LABOR FOR ON-SITE PREPARATION, ASSEMBLY AND
ORIGINAL INSTALLATION, ENGINEERING SERVICES, DESIGNS AND PLANS DIRECTLY
RELATED TO CONSTRUCTION OR INSTALLATION AND UTILITY COMPLIANCE COSTS.
(C) SUCH QUALIFIED EXPENDITURES SHALL NOT INCLUDE INTEREST OR OTHER
FINANCE CHARGES.
(D) THE AMOUNT OF ANY FEDERAL, STATE OR LOCAL GRANT RECEIVED BY THE
TAXPAYER, WHICH WAS USED FOR THE PURPOSE AND/OR INSTALLATION OF SUCH
EQUIPMENT AND WHICH WAS NOT INCLUDED IN THE FEDERAL GROSS INCOME OF THE
TAXPAYER, SHALL NOT BE INCLUDED IN THE AMOUNT OF SUCH QUALIFIED EXPENDI-
TURES.
(3) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBSECTION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE MINIMUM TAX FIXED BY PARAGRAPH THREE OF SUBSECTION (B) OF
SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF THE
AMOUNT OF CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR
REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE
IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS
AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
(V) EXCELSIOR JOBS PROGRAM TAX CREDIT. (1) ALLOWANCE OF CREDIT. A
TAXPAYER WILL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION
THIRTY-ONE OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
(2) THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR WILL
NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE MINIMUM TAX FIXED
BY PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOURTEEN HUNDRED FIFTY-
FIVE OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY
AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR WILL BE TREAT-
ED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE
WITH THE PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER.
PROVIDED, HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOU-
SAND EIGHTY-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST WILL BE
PAID THEREON.
(W) CREDIT FOR REHABILITATION OF HISTORIC PROPERTIES. (1) (A) FOR
TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN AND
BEFORE JANUARY FIRST, TWO THOUSAND TWENTY, A TAXPAYER SHALL BE ALLOWED A
CREDIT AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE,
IN AN AMOUNT EQUAL TO ONE HUNDRED PERCENT OF THE AMOUNT OF CREDIT
ALLOWED THE TAXPAYER WITH RESPECT TO A CERTIFIED HISTORIC STRUCTURE
UNDER SUBSECTION (A)(2) OF SECTION 47 OF THE FEDERAL INTERNAL REVENUE
CODE WITH RESPECT TO A CERTIFIED HISTORIC STRUCTURE LOCATED WITHIN THE
STATE. PROVIDED, HOWEVER, THE CREDIT SHALL NOT EXCEED FIVE MILLION
DOLLARS. FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO
THOUSAND TWENTY, A TAXPAYER SHALL BE ALLOWED A CREDIT AS HEREINAFTER
PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE, IN AN AMOUNT EQUAL TO
THIRTY PERCENT OF THE AMOUNT OF CREDIT ALLOWED THE TAXPAYER WITH RESPECT
TO A CERTIFIED HISTORIC STRUCTURE UNDER SUBSECTION (A)(2) OF SECTION 47
OF THE FEDERAL INTERNAL REVENUE CODE WITH RESPECT TO A CERTIFIED HISTOR-
IC STRUCTURE LOCATED WITHIN THE STATE. PROVIDED, HOWEVER, THE CREDIT
SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS.
(B) IF THE TAXPAYER IS A PARTNER IN A PARTNERSHIP OR A SHAREHOLDER OF
A NEW YORK S CORPORATION, THEN THE CREDIT CAPS IMPOSED IN SUBPARAGRAPH
S. 3456 72
(A) OF THIS PARAGRAPH SHALL BE APPLIED AT THE ENTITY LEVEL, SO THAT THE
AGGREGATE CREDIT ALLOWED TO ALL THE PARTNERS OR SHAREHOLDERS OF EACH
SUCH ENTITY IN THE TAXABLE YEAR DOES NOT EXCEED THE CREDIT CAP THAT IS
APPLICABLE IN THAT TAXABLE YEAR.
(2) TAX CREDITS ALLOWED PURSUANT TO THIS SUBSECTION SHALL BE ALLOWED
IN THE TAXABLE YEAR THAT THE QUALIFIED REHABILITATION IS PLACED IN
SERVICE UNDER SECTION 167 OF THE FEDERAL INTERNAL REVENUE CODE.
(3) IF THE CREDIT ALLOWED THE TAXPAYER PURSUANT TO SECTION 47 OF THE
INTERNAL REVENUE CODE WITH RESPECT TO A QUALIFIED REHABILITATION IS
RECAPTURED PURSUANT TO SUBSECTION (A) OF SECTION 50 OF THE INTERNAL
REVENUE CODE, A PORTION OF THE CREDIT ALLOWED UNDER THIS SUBSECTION MUST
BE ADDED BACK IN THE SAME TAXABLE YEAR AND IN THE SAME PROPORTION AS THE
FEDERAL RECAPTURE.
(4) THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR
SHALL NOT REDUCE THE TAX TO LESS THAN THE DOLLAR AMOUNT FIXED AS A MINI-
MUM TAX BY SUBSECTION (B) OF SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS
ARTICLE. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBSECTION
FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CRED-
IT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVER-
PAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED,
HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHT-
Y-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THER-
EON.
(5) TO BE ELIGIBLE FOR THE CREDIT ALLOWABLE UNDER THIS SUBSECTION THE
REHABILITATION PROJECT SHALL BE IN WHOLE OR IN PART LOCATED WITHIN A
CENSUS TRACT WHICH IS IDENTIFIED AS BEING AT OR BELOW ONE HUNDRED
PERCENT OF THE STATE MEDIAN FAMILY INCOME AS CALCULATED AS OF JANUARY
FIRST OF EACH YEAR USING THE MOST RECENT FIVE YEAR ESTIMATE FROM THE
AMERICAN COMMUNITY SURVEY PUBLISHED BY THE UNITED STATES CENSUS BUREAU.
(X) TEMPORARY DEFERRAL NONREFUNDABLE PAYOUT CREDIT. (1) ALLOWANCE OF
CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED
IN SUBDIVISION ONE OF SECTION THIRTY-FOUR OF THIS CHAPTER, AGAINST THE
TAX IMPOSED BY THIS ARTICLE.
(2) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR THAT YEAR TO LESS
THAN THE MINIMUM TAX FIXED BY SUBSECTION (B) OF SECTION FOURTEEN HUNDRED
FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED
UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH
AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR
MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED
FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
(Y) TEMPORARY DEFERRAL REFUNDABLE PAYOUT CREDIT. (1) ALLOWANCE OF
CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED
IN SUBDIVISION TWO OF SECTION THIRTY-FOUR OF THIS CHAPTER, AGAINST THE
TAX IMPOSED BY THIS ARTICLE.
(2) APPLICATION OF CREDIT. IN NO EVENT SHALL THE CREDIT UNDER THIS
SECTION BE ALLOWED IN AN AMOUNT WHICH WILL REDUCE THE TAX TO LESS THAN
THE MINIMUM TAX FIXED BY SUBSECTION (B) OF SECTION FOURTEEN HUNDRED
FIFTY-FIVE OF THIS ARTICLE. IF, HOWEVER, THE AMOUNT OF CREDIT ALLOWED
UNDER THIS SECTION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT,
ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE YEAR SHALL BE TREAT-
ED AS AN OVERPAYMENT OF TAX TO BE REFUNDED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER, PROVIDED
HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
S. 3456 73
(Z) ECONOMIC TRANSFORMATION AND FACILITY REDEVELOPMENT PROGRAM TAX
CREDIT. (1) ALLOWANCE OF CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT,
TO BE COMPUTED AS PROVIDED IN SECTION THIRTY-FIVE OF THIS CHAPTER,
AGAINST THE TAX IMPOSED BY THIS ARTICLE.
(2) THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR WILL
NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE MINIMUM TAX FIXED
BY PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOURTEEN HUNDRED FIFTY-
FIVE OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY
AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR WILL BE TREAT-
ED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE
WITH THE PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER.
PROVIDED, HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOU-
SAND EIGHTY-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST WILL BE
PAID THEREON.
(AA) EMPIRE STATE JOBS RETENTION PROGRAM CREDIT. (1) ALLOWANCE OF
CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS
PROVIDED IN SECTION THIRTY-SIX OF THIS CHAPTER, AGAINST THE TAXES
IMPOSED BY THIS ARTICLE.
(2) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBSECTION
FOR ANY TAXABLE YEAR WILL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE MINIMUM TAX FIXED BY THIS ARTICLE. HOWEVER, IF THE AMOUNT OF
CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE
TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH
TAXABLE YEAR WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND
EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS OF
SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST WILL BE PAID THEREON.
(BB) MINIMUM WAGE REIMBURSEMENT CREDIT. (1) ALLOWANCE OF CREDIT. A
TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED UNDER
SECTION THIRTY-EIGHT OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS
ARTICLE.
(2) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBSECTION
FOR ANY TAXABLE YEAR SHALL NOT, IN THE AGGREGATE, REDUCE THE TAX DUE FOR
SUCH YEAR TO LESS THAN THE MINIMUM TAX FIXED BY SUBSECTION (B) OF
SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF THE
AMOUNT OF CREDIT OF SUCH CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY
TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, THEN ANY AMOUNT OF CREDIT
THUS NOT DEDUCTIBLE SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE
CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE
THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS
OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
§ 1460. DECLARATIONS OF ESTIMATED TAX. (A) REQUIREMENTS OF DECLARA-
TION. EVERY TAXPAYER SUBJECT TO THE TAX IMPOSED BY SUBSECTION (A) OF
SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE SHALL MAKE A DECLARA-
TION OF ITS ESTIMATED TAX FOR THE CURRENT TAXABLE YEAR, CONTAINING SUCH
INFORMATION AS THE COMMISSIONER OF TAXATION AND FINANCE MAY PRESCRIBE BY
REGULATIONS OR INSTRUCTIONS, IF SUCH ESTIMATED TAX CAN REASONABLY BE
EXPECTED TO EXCEED ONE THOUSAND DOLLARS. IF A TAXPAYER IS SUBJECT TO THE
TAX SURCHARGE IMPOSED BY SECTION FOURTEEN HUNDRED FIFTY-FIVE-B OF THIS
ARTICLE AND SUCH TAXPAYER'S ESTIMATED TAX UNDER SUBSECTION (A) OF
SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE CAN REASONABLY BE
EXPECTED TO EXCEED ONE THOUSAND DOLLARS, SUCH TAXPAYER SHALL ALSO MAKE A
DECLARATION OF ITS ESTIMATED TAX SURCHARGE FOR THE CURRENT TAXABLE YEAR.
S. 3456 74
(B) DEFINITION OF ESTIMATED TAX AND ESTIMATED TAX SURCHARGE. THE TERMS
"ESTIMATED TAX" AND "ESTIMATED TAX SURCHARGE" MEAN THE AMOUNTS WHICH A
TAXPAYER ESTIMATES TO BE THE TAX OR TAX SURCHARGE IMPOSED BY SUBSECTION
(A) OF SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE OR FOURTEEN
HUNDRED FIFTY-FIVE-B OF THIS ARTICLE, RESPECTIVELY, FOR THE CURRENT
TAXABLE YEAR, LESS THE AMOUNT WHICH IT ESTIMATES TO BE THE SUM OF ANY
CREDITS ALLOWABLE AGAINST THE TAX OR TAX SURCHARGE, RESPECTIVELY.
(C) TIME FOR FILING DECLARATION. A DECLARATION OF ESTIMATED TAX AND A
DECLARATION OF ESTIMATED TAX SURCHARGE SHALL BE FILED ON OR BEFORE JUNE
FIFTEENTH OF THE CURRENT TAXABLE YEAR IN THE CASE OF A TAXPAYER WHICH
REPORTS ON THE BASIS OF A CALENDAR YEAR, EXCEPT THAT IF THE REQUIREMENTS
OF SUBSECTION (A) OF THIS SECTION ARE FIRST MET:
(1) AFTER MAY THIRTY-FIRST AND BEFORE SEPTEMBER FIRST OF SUCH CURRENT
TAXABLE YEAR, THE DECLARATION SHALL BE FILED ON OR BEFORE SEPTEMBER
FIFTEENTH, OR
(2) AFTER AUGUST THIRTY-FIRST AND BEFORE DECEMBER FIRST OF SUCH
CURRENT TAXABLE YEAR, THE DECLARATION SHALL BE FILED ON OR BEFORE DECEM-
BER FIFTEENTH.
(D) AMENDMENTS OF DECLARATION. A TAXPAYER MAY AMEND A DECLARATION
UNDER REGULATIONS OF THE TAX COMMISSION.
(E) RETURN AS DECLARATION. IF, ON OR BEFORE FEBRUARY FIFTEENTH OF THE
SUCCEEDING YEAR IN THE CASE OF A TAXPAYER WHOSE TAXABLE YEAR IS A CALEN-
DAR YEAR, A TAXPAYER FILES ITS RETURN FOR THE YEAR FOR WHICH THE DECLA-
RATION IS REQUIRED, AND PAYS THEREWITH THE BALANCE, IF ANY, OF THE FULL
AMOUNT OF THE TAX OR TAX SURCHARGE SHOWN TO BE DUE ON THE RETURN:
(1) SUCH RETURN SHALL BE CONSIDERED AS ITS DECLARATION IF NO DECLARA-
TION WAS REQUIRED TO BE FILED DURING THE TAXABLE YEAR FOR WHICH THE TAX
OR TAX SURCHARGE WAS IMPOSED, BUT IS OTHERWISE REQUIRED TO BE FILED ON
OR BEFORE DECEMBER FIFTEENTH PURSUANT TO PARAGRAPH TWO OF SUBSECTION (C)
OF THIS SECTION, AND
(2) SUCH RETURN SHALL BE CONSIDERED AS THE AMENDMENT PERMITTED BY
SUBSECTION (D) OF THIS SECTION TO BE FILED ON OR BEFORE DECEMBER
FIFTEENTH IF THE TAX OR TAX SURCHARGE SHOWN ON THE RETURN IS GREATER
THAN THE ESTIMATED TAX OR ESTIMATED TAX SURCHARGE, AS THE CASE MAY BE,
SHOWN ON A DECLARATION PREVIOUSLY MADE.
(F) FISCAL YEAR. THIS SECTION SHALL APPLY TO TAXABLE YEARS OF TWELVE
MONTHS OTHER THAN A CALENDAR YEAR BY THE SUBSTITUTIONS OF THE MONTHS OF
SUCH FISCAL YEAR FOR THE CORRESPONDING MONTHS SPECIFIED IN THIS SECTION.
(G) SHORT TAXABLE PERIOD. IF THE TAXABLE PERIOD FOR WHICH A TAX OR TAX
SURCHARGE IS IMPOSED BY SUBSECTION (A) OF SECTION FOURTEEN HUNDRED
FIFTY-ONE OF THIS ARTICLE OR SECTION FOURTEEN HUNDRED FIFTY-FIVE-B OF
THIS ARTICLE, RESPECTIVELY, IS LESS THAN TWELVE MONTHS, EVERY TAXPAYER
REQUIRED TO MAKE A DECLARATION OF ESTIMATED TAX OR A DECLARATION OF
ESTIMATED TAX SURCHARGE FOR SUCH TAXABLE PERIOD SHALL MAKE SUCH A DECLA-
RATION IN ACCORDANCE WITH REGULATIONS OF THE COMMISSIONER OF TAXATION
AND FINANCE.
(H) EXTENSION OF TIME. THE TAX COMMISSION MAY GRANT A REASONABLE
EXTENSION OF TIME, NOT TO EXCEED THREE MONTHS, FOR THE FILING OF ANY
DECLARATION REQUIRED PURSUANT TO THIS SECTION, ON SUCH TERMS AND CONDI-
TIONS AS IT MAY REQUIRE.
§ 1461. PAYMENTS OF ESTIMATED TAX. (A) EVERY TAXPAYER SUBJECT TO THE
TAX IMPOSED BY SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE MUST
PAY AN AMOUNT EQUAL TO (I) TWENTY-FIVE PERCENT OF THE PRECEDING YEAR'S
TAX IF THE PRECEDING YEAR'S TAX EXCEEDED ONE THOUSAND DOLLARS BUT WAS
EQUAL TO OR LESS THAN ONE HUNDRED THOUSAND DOLLARS, OR (II) FORTY
PERCENT OF THE PRECEDING YEAR'S TAX IF THE PRECEDING YEAR'S TAX EXCEEDED
S. 3456 75
ONE HUNDRED THOUSAND DOLLARS. THE AMOUNT MUST BE PAID WITH THE RETURN
REQUIRED TO BE FILED FOR THE PRECEDING TAXABLE YEAR OR WITH AN APPLICA-
TION FOR AN EXTENSION OF THE TIME FOR FILING THE RETURN. IF THE PRECED-
ING YEAR'S TAX UNDER SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE
EXCEEDED ONE THOUSAND DOLLARS AND THE TAXPAYER IS SUBJECT TO THE TAX
SURCHARGE IMPOSED BY SECTION FOURTEEN HUNDRED FIFTY-FIVE-B OF THIS ARTI-
CLE, THE TAXPAYER MUST ALSO PAY WITH THE TAX SURCHARGE RETURN REQUIRED
TO BE FILED FOR THE PRECEDING TAXABLE YEAR, OR WITH AN APPLICATION FOR
AN EXTENSION OF THE TIME FOR FILING THE RETURN, AN AMOUNT EQUAL TO (I)
TWENTY-FIVE PERCENT OF THE TAX SURCHARGE IMPOSED FOR THE PRECEDING YEAR
IF THE PRECEDING YEAR'S TAX WAS EQUAL TO OR LESS THAN ONE HUNDRED THOU-
SAND DOLLARS, OR (II) FORTY PERCENT OF THE TAX SURCHARGE IMPOSED FOR THE
PRECEDING YEAR IF THE PRECEDING YEAR'S TAX EXCEEDED ONE HUNDRED THOUSAND
DOLLARS.
(B) OTHER INSTALLMENTS. THE ESTIMATED TAX OR ESTIMATED TAX SURCHARGE
FOR EACH TAXABLE YEAR WITH RESPECT TO WHICH A DECLARATION OF ESTIMATED
TAX OR A DECLARATION OF ESTIMATED TAX SURCHARGE, RESPECTIVELY, IS
REQUIRED TO BE FILED UNDER THIS ARTICLE SHALL BE PAID, IN THE CASE OF A
TAXPAYER WHICH REPORTS ON THE BASIS OF A CALENDAR YEAR, AS FOLLOWS:
(1) IF THE DECLARATION IS FILED ON OR BEFORE JUNE FIFTEENTH, THE ESTI-
MATED TAX OR ESTIMATED TAX SURCHARGE SHOWN THEREON, AFTER APPLYING THER-
ETO THE AMOUNT, IF ANY, PAID DURING THE SAME TAXABLE YEAR PURSUANT TO
SUBSECTION (A) OF THIS SECTION, SHALL BE PAID IN THREE EQUAL INSTALL-
MENTS. ONE OF SUCH INSTALLMENTS SHALL BE PAID AT THE TIME OF THE FILING
OF THE DECLARATION, ONE SHALL BE PAID ON THE FOLLOWING SEPTEMBER
FIFTEENTH, AND ONE ON THE FOLLOWING DECEMBER FIFTEENTH.
(2) IF THE DECLARATION IS FILED AFTER JUNE FIFTEENTH AND NOT AFTER
SEPTEMBER FIFTEENTH OF SUCH TAXABLE YEAR, AND IS NOT REQUIRED TO BE
FILED ON OR BEFORE JUNE FIFTEENTH OF SUCH YEAR THE ESTIMATED TAX OR
ESTIMATED TAX SURCHARGE SHOWN ON SUCH DECLARATION, AFTER APPLYING THERE-
TO THE AMOUNT, IF ANY, PAID DURING THE SAME TAXABLE YEAR PURSUANT TO
SUBSECTION (A) OF THIS SECTION, SHALL BE PAID IN TWO EQUAL INSTALLMENTS.
ONE OF SUCH INSTALLMENTS SHALL BE PAID AT THE TIME OF THE FILING OF THE
DECLARATION AND ONE SHALL BE PAID ON THE FOLLOWING DECEMBER FIFTEENTH.
(3) IF THE DECLARATION IS FILED AFTER SEPTEMBER FIFTEENTH OF SUCH
TAXABLE YEAR, AND IS NOT REQUIRED TO BE FILED ON OR BEFORE SEPTEMBER
FIFTEENTH OF SUCH YEAR, THE ESTIMATED TAX OR ESTIMATED TAX SURCHARGE
SHOWN ON SUCH DECLARATION, AFTER APPLYING THERETO THE AMOUNT, IF ANY,
PAID IN RESPECT OF SUCH YEAR PURSUANT TO SUBSECTION (A) OF THIS SECTION
SHALL BE PAID IN FULL AT THE TIME OF THE FILING OF THE DECLARATION.
(4) IF THE DECLARATION IS FILED AFTER THE TIME PRESCRIBED THEREFOR, OR
AFTER THE EXPIRATION OF ANY EXTENSION OF TIME THEREFOR, PARAGRAPHS TWO
AND THREE OF THIS SUBSECTION SHALL NOT APPLY AND THERE SHALL BE PAID AT
THE TIME OF SUCH FILING ALL INSTALLMENTS OF ESTIMATED TAX OR ESTIMATED
TAX SURCHARGE PAYABLE AT OR BEFORE SUCH TIME, AND THE REMAINING INSTALL-
MENTS SHALL BE PAID AT THE TIMES AT WHICH, AND IN THE AMOUNTS IN WHICH,
THEY WOULD HAVE BEEN PAYABLE IF THE DECLARATION HAD BEEN FILED WHEN DUE.
(C) AMENDMENTS OF DECLARATIONS. IF ANY AMENDMENT OF A DECLARATION IS
FILED, THE REMAINING INSTALLMENTS, IF ANY, SHALL BE RATABLY INCREASED OR
DECREASED (AS THE CASE MAY BE) TO REFLECT ANY INCREASE OR DECREASE IN
THE ESTIMATED TAX OR ESTIMATED TAX SURCHARGE BY REASON OF SUCH AMEND-
MENT, AND IF ANY AMENDMENT IS MADE AFTER SEPTEMBER FIFTEENTH OF THE
TAXABLE YEAR, ANY INCREASE IN THE ESTIMATED TAX OR ESTIMATED TAX
SURCHARGE BY REASON THEREOF SHALL BE PAID AT THE TIME OF MAKING SUCH
AMENDMENT.
S. 3456 76
(D) APPLICATION OF INSTALLMENTS BASED ON THE PRECEDING YEAR'S TAX. (1)
ANY AMOUNT PAID PURSUANT TO SUBSECTION (A) OF THIS SECTION SHALL BE
APPLIED AS A FIRST INSTALLMENT AGAINST THE ESTIMATED TAX OR ESTIMATED
TAX SURCHARGE, RESPECTIVELY, OF THE TAXPAYER FOR THE TAXABLE YEAR SHOWN
ON THE DECLARATION REQUIRED TO BE FILED PURSUANT TO SECTION FOURTEEN
HUNDRED SIXTY OF THIS ARTICLE, OR IF NO DECLARATION OF ESTIMATED TAX OR
A DECLARATION OF ESTIMATED TAX SURCHARGE IS REQUIRED TO BE FILED BY THE
TAXPAYER PURSUANT TO SUCH SECTION, ANY SUCH AMOUNT SHALL BE CONSIDERED A
PAYMENT ON ACCOUNT OF THE TAX OR TAX SURCHARGE SHOWN ON THE RETURN
REQUIRED TO BE FILED BY THE TAXPAYER FOR SUCH TAXABLE YEAR.
(2) ANY AMOUNT PAID PURSUANT TO PARAGRAPH FOUR OF SUBSECTION (C) OF
SECTION SIX HUNDRED FIFTY-EIGHT OF THIS CHAPTER ON BEHALF OF A TAXPAYER
SUBJECT TO TAX UNDER THIS ARTICLE SHALL BE APPLIED AGAINST THE ESTIMATED
TAX OF THE TAXPAYER FOR THE TAXABLE YEAR SHOWN ON THE DECLARATION
REQUIRED TO BE FILED PURSUANT TO SECTION FOURTEEN HUNDRED SIXTY OF THIS
ARTICLE, OR IF NO DECLARATION IS FILED PURSUANT TO SUCH SECTION, ANY
SUCH AMOUNT SHALL BE CONSIDERED A PAYMENT ON ACCOUNT OF TAX SHOWN ON THE
RETURN REQUIRED TO BE FILED BY THE TAXPAYER FOR SUCH TAXABLE YEAR.
(E) INTEREST ON CERTAIN INSTALLMENTS BASED ON THE PRECEDING YEAR'S
TAX. NOTWITHSTANDING THE PROVISIONS OF SECTION ONE THOUSAND EIGHTY-EIGHT
OF THIS CHAPTER OR OF SECTION SIXTEEN OF THE STATE FINANCE LAW, IF AN
AMOUNT PAID PURSUANT TO SUBSECTION (A) OF THIS SECTION EXCEEDS THE TAX
OR TAX SURCHARGE, RESPECTIVELY, SHOWN ON THE RETURN REQUIRED TO BE FILED
BY THE TAXPAYER FOR THE TAXABLE YEAR DURING WHICH THE AMOUNT WAS PAID,
INTEREST SHALL BE ALLOWED AND PAID ON THE AMOUNT BY WHICH THE AMOUNT SO
PAID PURSUANT TO SUCH SUBSECTION EXCEEDS SUCH TAX OR TAX SURCHARGE, AT
THE OVERPAYMENT RATE SET BY THE COMMISSIONER OF TAXATION AND FINANCE
PURSUANT TO SECTION ONE THOUSAND NINETY-SIX OF THIS CHAPTER, OR IF NO
RATE IS SET, AT THE RATE OF SIX PER CENT PER ANNUM FROM THE DATE OF
PAYMENT OF THE AMOUNT SO PAID PURSUANT TO SUCH SUBSECTION TO THE
FIFTEENTH DAY OF THE THIRD MONTH FOLLOWING THE CLOSE OF THE TAXABLE
YEAR, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE ALLOWED OR PAID UNDER
THIS SUBSECTION IF THE AMOUNT THEREOF IS LESS THAN ONE DOLLAR.
(F) THE PRECEDING YEAR'S TAX DEFINED. AS USED IN THIS SECTION, "THE
PRECEDING YEAR'S TAX" MEANS THE TAX IMPOSED UPON THE TAXPAYER BY
SUBSECTION (A) OF SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE FOR
THE PRECEDING TAXABLE YEAR, OR, FOR PURPOSES OF COMPUTING THE FIRST
INSTALLMENT OF ESTIMATED TAX WHEN AN APPLICATION HAS BEEN FILED FOR
EXTENSION OF THE TIME FOR FILING THE RETURN REQUIRED TO BE FILED FOR
SUCH PRECEDING TAXABLE YEAR, THE AMOUNT PROPERLY ESTIMATED PURSUANT TO
PARAGRAPH ONE OF SUBSECTION (B) OF SECTION FOURTEEN HUNDRED SIXTY-THREE
OF THIS ARTICLE AS THE TAX IMPOSED UPON THE TAXPAYER FOR SUCH TAXABLE
YEAR.
(G) APPLICATION TO SHORT TAXABLE PERIOD. THIS SECTION SHALL APPLY TO A
TAXABLE PERIOD OF LESS THAN TWELVE MONTHS IN ACCORDANCE WITH REGULATIONS
OF THE TAX COMMISSION.
(H) FISCAL YEAR. THE PROVISIONS OF THIS SECTION SHALL APPLY TO TAXABLE
YEARS OF TWELVE MONTHS OTHER THAN A CALENDAR YEAR BY THE SUBSTITUTION OF
THE MONTHS OF SUCH FISCAL YEAR FOR THE CORRESPONDING MONTHS SPECIFIED IN
SUCH PROVISIONS.
(I) EXTENSION OF TIME. THE COMMISSIONER OF TAXATION AND FINANCE MAY
GRANT A REASONABLE EXTENSION OF TIME, NOT TO EXCEED SIX MONTHS, FOR
PAYMENT OF ANY INSTALLMENT OF ESTIMATED TAX OR ESTIMATED TAX SURCHARGE
REQUIRED PURSUANT TO THIS SECTION, ON SUCH TERMS AND CONDITIONS AS HE
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
S. 3456 77
EXTENSION OF TIME FOR PAYMENT IS GRANTED, PROVIDED, HOWEVER, THAT INTER-
EST AT THE UNDERPAYMENT RATE SET BY THE COMMISSIONER PURSUANT TO SECTION
ONE THOUSAND NINETY-SIX OF THIS CHAPTER, OR IF NO RATE IS SET, AT THE
RATE OF SIX PER CENTUM 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 SUBSECTION.
(J) PAYMENT OF INSTALLMENTS IN ADVANCE. A TAXPAYER MAY ELECT TO PAY
ANY INSTALLMENT OF ESTIMATED TAX OR ESTIMATED TAX SURCHARGE PRIOR TO THE
DATE PRESCRIBED IN THIS SECTION FOR PAYMENT THEREOF.
§ 1462. RETURNS. (A) EVERY TAXPAYER, AS WELL AS EVERY OTHER BANKING
CORPORATION HAVING AN EMPLOYEE, INCLUDING ANY OFFICER, WITHIN THE STATE,
SHALL ANNUALLY ON OR BEFORE THE FIFTEENTH DAY OF THE THIRD MONTH FOLLOW-
ING THE CLOSE OF EACH OF ITS TAXABLE YEARS TRANSMIT TO THE TAX COMMIS-
SION A RETURN IN A FORM PRESCRIBED BY IT SETTING FORTH SUCH INFORMATION
AS THE TAX COMMISSION MAY PRESCRIBE AND EVERY TAXPAYER WHICH CEASES TO
EXERCISE ITS FRANCHISE OR TO BE SUBJECT TO THE TAX IMPOSED BY THIS ARTI-
CLE SHALL TRANSMIT TO THE TAX COMMISSION A RETURN ON THE DATE OF SUCH
CESSATION OR AT SUCH OTHER TIME AS THE TAX COMMISSION MAY REQUIRE COVER-
ING EACH YEAR OR PERIOD FOR WHICH NO RETURN WAS THERETOFORE FILED. IN
THE CASE OF A TERMINATION YEAR OF AN S CORPORATION, THE S SHORT YEAR AND
THE C SHORT YEAR SHALL BE TREATED AS SEPARATE SHORT TAXABLE YEARS,
PROVIDED, HOWEVER, THE DUE DATE OF THE REPORT FOR THE S SHORT YEAR SHALL
BE THE SAME AS THE DUE DATE OF THE REPORT FOR THE C SHORT YEAR.
(B) EVERY TAXPAYER SHALL ALSO TRANSMIT SUCH OTHER RETURNS AND SUCH
FACTS AND INFORMATION AS THE TAX COMMISSION MAY REQUIRE IN THE ADMINIS-
TRATION OF THIS ARTICLE.
(C) THE TAX COMMISSION MAY GRANT A REASONABLE EXTENSION OF TIME FOR
FILING RETURNS WHENEVER GOOD CAUSE EXISTS. AN AUTOMATIC EXTENSION OF SIX
MONTHS FOR THE FILING OF ITS ANNUAL RETURN SHALL BE ALLOWED ANY TAXPAY-
ER, IF WITHIN THE TIME PRESCRIBED BY SUBSECTION (A) OF THIS SECTION,
SUCH TAXPAYER FILES WITH THE TAX COMMISSION AN APPLICATION FOR EXTENSION
IN SUCH FORM AS SAID COMMISSION MAY PRESCRIBE BY REGULATION AND PAYS ON
OR BEFORE THE DATE OF SUCH FILING THE AMOUNT PROPERLY ESTIMATED AS ITS
TAX.
(D) EVERY RETURN SHALL HAVE ANNEXED THERETO A CERTIFICATION BY THE
PRESIDENT, VICE PRESIDENT, TREASURER, ASSISTANT TREASURER, CHIEF
ACCOUNTING OFFICER OR ANY OTHER OFFICER OF THE TAXPAYER DULY AUTHORIZED
SO TO ACT TO THE EFFECT THAT THE STATEMENTS CONTAINED THEREIN ARE TRUE.
THE FACT THAT AN INDIVIDUAL'S NAME IS SIGNED ON A CERTIFICATION OF THE
RETURN SHALL BE PRIMA FACIE EVIDENCE THAT SUCH INDIVIDUAL IS AUTHORIZED
TO SIGN AND CERTIFY THE RETURN ON BEHALF OF THE CORPORATION. IN THE CASE
OF AN ASSOCIATION OR PUBLICLY TRADED PARTNERSHIP REFERRED TO IN PARA-
GRAPH ONE OF SUBSECTION (F) OF THIS SECTION, SUCH CERTIFICATION SHALL BE
MADE BY ANY PERSON DULY AUTHORIZED SO TO ACT ON BEHALF OF SUCH ASSOCI-
ATION OR PUBLICLY TRADED PARTNERSHIP.
(E) IF THE AMOUNT OF TAXABLE INCOME OR ALTERNATIVE MINIMUM TAXABLE
INCOME FOR ANY YEAR OF ANY TAXPAYER (INCLUDING ANY TAXPAYER WHICH HAS
ELECTED TO BE TAXED UNDER SUBCHAPTER S OF CHAPTER ONE OF THE INTERNAL
REVENUE CODE) AS RETURNED TO THE UNITED STATES TREASURY DEPARTMENT IS
CHANGED OR CORRECTED BY THE COMMISSIONER OF INTERNAL REVENUE OR OTHER
OFFICER OF THE UNITED STATES OR OTHER COMPETENT AUTHORITY, SUCH TAXPAYER
SHALL REPORT SUCH CHANGE OR CORRECTED TAXABLE INCOME OR ALTERNATIVE
MINIMUM TAXABLE INCOME WITHIN NINETY DAYS (OR ONE HUNDRED TWENTY DAYS,
IN THE CASE OF A TAXPAYER MAKING A COMBINED RETURN UNDER THIS ARTICLE
FOR SUCH YEAR) AFTER THE FINAL DETERMINATION OF SUCH CHANGE OR
CORRECTION OR AS REQUIRED BY THE COMMISSIONER, AND SHALL CONCEDE THE
S. 3456 78
ACCURACY OF SUCH DETERMINATION OR STATE WHEREIN IT IS ERRONEOUS. ANY
TAXPAYER FILING AN AMENDED RETURN WITH SUCH DEPARTMENT SHALL ALSO FILE
WITHIN NINETY DAYS (OR ONE HUNDRED TWENTY DAYS, IN THE CASE OF A TAXPAY-
ER MAKING A COMBINED RETURN UNDER THIS ARTICLE FOR SUCH YEAR) THEREAFTER
AN AMENDED RETURN WITH THE COMMISSIONER WHICH SHALL CONTAIN SUCH INFOR-
MATION AS THE COMMISSIONER SHALL REQUIRE. THE ALLOWANCE OF A TENTATIVE
CARRYBACK ADJUSTMENT BASED UPON A NET CAPITAL LOSS CARRYBACK PURSUANT TO
SECTION SIXTY-FOUR HUNDRED ELEVEN OF THE INTERNAL REVENUE CODE, SHALL BE
TREATED AS A FINAL DETERMINATION FOR PURPOSES OF THIS SUBSECTION.
(F) (1) FOR PURPOSES OF THIS SUBSECTION, THE TERM "BANK HOLDING COMPA-
NY" MEANS ANY CORPORATION 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 HOLD-
ING COMPANY (BUT EXCLUDING A DIVERSIFIED SAVINGS AND LOAN HOLDING COMPA-
NY) UNDER THE FEDERAL NATIONAL HOUSING ACT, AS AMENDED. FOR PURPOSES OF
THE PRECEDING SENTENCE, THE TERM "CORPORATION" SHALL INCLUDE AN ASSOCI-
ATION, WITHIN THE MEANING OF PARAGRAPH THREE OF SUBSECTION (A) OF
SECTION SEVENTY-SEVEN HUNDRED ONE OF THE INTERNAL REVENUE CODE, AND A
PUBLICLY TRADED PARTNERSHIP TREATED AS A CORPORATION FOR PURPOSES OF THE
INTERNAL REVENUE CODE PURSUANT TO SECTION SEVENTY-SEVEN HUNDRED FOUR
THEREOF.
(2) (I) ANY BANKING CORPORATION OR BANK HOLDING COMPANY WHICH IS EXER-
CISING ITS CORPORATE FRANCHISE OR DOING BUSINESS IN THIS STATE IN A
CORPORATE OR ORGANIZED CAPACITY, AND
(A) WHICH OWNS OR CONTROLS, DIRECTLY OR INDIRECTLY, EIGHTY PERCENT OR
MORE OF THE VOTING STOCK OF ONE OR MORE BANKING CORPORATIONS OR BANK
HOLDING COMPANIES, OR
(B) WHOSE VOTING STOCK IS EIGHTY PERCENT OR MORE OWNED OR CONTROLLED,
DIRECTLY OR INDIRECTLY, BY A BANKING CORPORATION OR A BANK HOLDING
COMPANY, SHALL MAKE A RETURN ON A COMBINED BASIS UNDER THIS ARTICLE
COVERING ITSELF AND SUCH CORPORATIONS DESCRIBED IN CLAUSE (A) OR (B) AND
SHALL SET FORTH SUCH INFORMATION AS THE TAX COMMISSION MAY REQUIRE
UNLESS THE TAXPAYER OR THE TAX COMMISSION SHOWS THAT THE INCLUSION OF
SUCH A CORPORATION IN THE COMBINED RETURN FAILS TO PROPERLY REFLECT THE
TAX LIABILITY OF SUCH CORPORATION UNDER THIS ARTICLE. PROVIDED, HOWEVER,
THAT NO BANKING CORPORATION OR BANK HOLDING COMPANY NOT A TAXPAYER SHALL
BE SUBJECT TO THE REQUIREMENTS OF THIS SUBPARAGRAPH UNLESS THE TAX
COMMISSION DEEMS THAT THE APPLICATION OF SUCH REQUIREMENTS IS NECESSARY
IN ORDER TO PROPERLY REFLECT THE TAX LIABILITY UNDER THIS ARTICLE,
BECAUSE OF INTERCOMPANY TRANSACTIONS OR SOME AGREEMENT, UNDERSTANDING,
ARRANGEMENT OR TRANSACTION OF THE TYPE REFERRED TO IN SUBSECTION (G) OF
THIS SECTION.
(II) IN THE DISCRETION OF THE TAX COMMISSION, ANY BANKING CORPORATION
OR BANK HOLDING COMPANY WHICH IS EXERCISING ITS CORPORATE FRANCHISE OR
DOING BUSINESS IN THIS STATE IN A CORPORATE OR ORGANIZED CAPACITY, AND
(A) WHICH OWNS OR CONTROLS, DIRECTLY OR INDIRECTLY, SIXTY-FIVE PERCENT
OR MORE OF THE VOTING STOCK OF ONE OR MORE BANKING CORPORATIONS OR BANK
HOLDING COMPANIES, OR
(B) WHOSE VOTING STOCK IS SIXTY-FIVE PERCENT OR MORE OWNED OR
CONTROLLED, DIRECTLY OR INDIRECTLY, BY A BANKING CORPORATION OR A BANK
HOLDING COMPANY, MAY BE REQUIRED OR PERMITTED TO MAKE A RETURN ON A
COMBINED BASIS UNDER THIS ARTICLE COVERING ITSELF AND SUCH CORPORATIONS
DESCRIBED IN CLAUSE (A) OR (B) AND SHALL SET FORTH SUCH INFORMATION AS
THE TAX COMMISSION MAY REQUIRE; PROVIDED, HOWEVER, THAT NO COMBINED
RETURN SHALL BE REQUIRED OR PERMITTED UNLESS THE TAX COMMISSION DEEMS
SUCH REPORT NECESSARY IN ORDER TO PROPERLY REFLECT THE TAX LIABILITY
S. 3456 79
UNDER THIS ARTICLE OF ANY ONE OR MORE OF SUCH BANKING CORPORATIONS OR
BANK HOLDING COMPANIES.
(III) IN THE DISCRETION OF THE TAX COMMISSION, BANKING CORPORATIONS OR
BANK HOLDING COMPANIES WHICH ARE SIXTY-FIVE PERCENT OR MORE OWNED OR
CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE SAME INTEREST MAY BE PERMIT-
TED OR REQUIRED TO MAKE A RETURN ON A COMBINED BASIS UNDER THIS ARTICLE
AND SHALL SET FORTH SUCH INFORMATION AS THE TAX COMMISSION MAY REQUIRE,
IF AT LEAST ONE SUCH BANKING CORPORATION OR BANK HOLDING COMPANY IS
EXERCISING ITS CORPORATE FRANCHISE OR DOING BUSINESS IN THIS STATE IN A
CORPORATE OR ORGANIZED CAPACITY. NO COMBINED RETURN SHALL BE REQUIRED OR
PERMITTED UNLESS THE TAX COMMISSION DEEMS SUCH REPORT NECESSARY IN ORDER
TO PROPERLY REFLECT THE TAX LIABILITY UNDER THIS ARTICLE OF ANY ONE OR
MORE OF SUCH BANKING CORPORATIONS OR BANK HOLDING COMPANIES.
(IV) (A) NOTWITHSTANDING ANY PROVISION OF THIS PARAGRAPH, ANY BANK
HOLDING COMPANY EXERCISING ITS CORPORATE FRANCHISE OR DOING BUSINESS IN
THE STATE MAY MAKE A RETURN ON A COMBINED BASIS WITHOUT SEEKING THE
PERMISSION OF THE COMMISSIONER WITH ANY BANKING CORPORATION EXERCISING
ITS CORPORATE FRANCHISE OR DOING BUSINESS IN THE STATE IN A CORPORATE OR
ORGANIZED CAPACITY SIXTY-FIVE PERCENT OR MORE OF WHOSE VOTING STOCK IS
OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY SUCH BANK HOLDING COMPA-
NY, FOR THE FIRST TAXABLE YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO
THOUSAND AND BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN DURING WHICH
SUCH BANK HOLDING COMPANY REGISTERS FOR THE FIRST TIME UNDER THE FEDERAL
BANK HOLDING COMPANY ACT, AS AMENDED, AND ALSO ELECTS TO BE A FINANCIAL
HOLDING COMPANY. IN ADDITION, FOR EACH SUBSEQUENT TAXABLE YEAR BEGINNING
AFTER JANUARY FIRST, TWO THOUSAND AND BEFORE JANUARY FIRST, TWO THOUSAND
NINETEEN, ANY SUCH BANK HOLDING COMPANY MAY FILE ON A COMBINED BASIS
WITHOUT SEEKING THE PERMISSION OF THE COMMISSIONER WITH ANY BANKING
CORPORATION THAT IS EXERCISING ITS CORPORATE FRANCHISE OR DOING BUSINESS
IN THE STATE AND SIXTY-FIVE PERCENT OR MORE OF WHOSE VOTING STOCK IS
OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY SUCH BANK HOLDING COMPA-
NY IF EITHER SUCH BANKING CORPORATION IS EXERCISING ITS CORPORATE FRAN-
CHISE OR DOING BUSINESS IN THE STATE IN A CORPORATE OR ORGANIZED CAPACI-
TY FOR THE FIRST TIME DURING SUCH SUBSEQUENT TAXABLE YEAR, OR SIXTY-FIVE
PERCENT OR MORE OF THE VOTING STOCK OF SUCH BANKING CORPORATION IS OWNED
OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY SUCH BANK HOLDING COMPANY FOR
THE FIRST TIME DURING SUCH SUBSEQUENT TAXABLE YEAR. PROVIDED HOWEVER,
FOR EACH SUBSEQUENT TAXABLE YEAR BEGINNING AFTER JANUARY FIRST, TWO
THOUSAND AND BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN, A BANKING
CORPORATION DESCRIBED IN EITHER OF THE TWO PRECEDING SENTENCES WHICH
FILED ON A COMBINED BASIS WITH ANY SUCH BANK HOLDING COMPANY IN A PREVI-
OUS TAXABLE YEAR, MUST CONTINUE TO FILE ON A COMBINED BASIS WITH SUCH
BANK HOLDING COMPANY IF SUCH BANKING CORPORATION, DURING SUCH SUBSEQUENT
TAXABLE YEAR, CONTINUES TO EXERCISE ITS CORPORATE FRANCHISE OR DO BUSI-
NESS IN THE STATE IN A CORPORATE OR ORGANIZED CAPACITY AND SIXTY-FIVE
PERCENT OR MORE OF SUCH BANKING CORPORATION'S VOTING STOCK CONTINUES TO
BE OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY SUCH BANK HOLDING
COMPANY, UNLESS THE PERMISSION OF THE COMMISSIONER HAS BEEN OBTAINED TO
FILE ON A SEPARATE BASIS FOR SUCH SUBSEQUENT TAXABLE YEAR. PROVIDED
FURTHER, HOWEVER, FOR EACH SUBSEQUENT TAXABLE YEAR BEGINNING AFTER JANU-
ARY FIRST, TWO THOUSAND AND BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN,
A BANKING CORPORATION DESCRIBED IN EITHER OF THE FIRST TWO SENTENCES OF
THIS CLAUSE WHICH DID NOT FILE ON A COMBINED BASIS WITH ANY SUCH BANK
HOLDING COMPANY IN A PREVIOUS TAXABLE YEAR, MAY NOT FILE ON A COMBINED
BASIS WITH SUCH BANK HOLDING COMPANY DURING ANY SUCH SUBSEQUENT TAXABLE
S. 3456 80
YEAR UNLESS THE PERMISSION OF THE COMMISSIONER HAS BEEN OBTAINED TO FILE
ON A COMBINED BASIS FOR SUCH SUBSEQUENT TAXABLE YEAR.
(B) NOTWITHSTANDING ANY PROVISION OF THIS PARAGRAPH OTHER THAN CLAUSE
(A) OF THIS SUBPARAGRAPH, THE COMMISSIONER MAY NOT REQUIRE A BANK HOLD-
ING COMPANY WHICH, DURING A TAXABLE YEAR BEGINNING ON OR AFTER JANUARY
FIRST, TWO THOUSAND AND BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN,
REGISTERS FOR THE FIRST TIME DURING SUCH TAXABLE YEAR UNDER THE FEDERAL
BANK HOLDING COMPANY ACT, AS AMENDED, AND ALSO ELECTS TO BE A FINANCIAL
HOLDING COMPANY, TO MAKE A RETURN ON A COMBINED BASIS FOR ANY TAXABLE
YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND AND BEFORE JANU-
ARY FIRST, TWO THOUSAND NINETEEN WITH A BANKING CORPORATION SIXTY-FIVE
PERCENT OR MORE OF WHOSE VOTING STOCK IS OWNED OR CONTROLLED, DIRECTLY
OR INDIRECTLY, BY SUCH BANK HOLDING COMPANY.
(V) A BANKING CORPORATION DOING BUSINESS IN THIS STATE SOLELY BECAUSE
IT MEETS ONE OR MORE OF THE TESTS IN SUBPARAGRAPHS (I) THROUGH (V) OF
PARAGRAPH ONE OF SUBSECTION (C) OF SECTION FOURTEEN HUNDRED FIFTY-ONE OF
THIS ARTICLE (REFERRED TO IN THIS SUBPARAGRAPH AS THE "CREDIT CARD
BANK") WILL NOT BE INCLUDED IN A COMBINED RETURN PURSUANT TO SUBPARA-
GRAPH (I) OF THIS PARAGRAPH WITH ANOTHER BANKING CORPORATION OR BANK
HOLDING COMPANY WHICH IS EXERCISING ITS CORPORATE FRANCHISE OR DOING
BUSINESS IN THIS STATE UNLESS THE CREDIT CARD BANK OR THE COMMISSIONER
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 ARTI-
CLE. 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 FOURTEEN HUNDRED FIFTY-ONE AND WAS INCLUDED IN A COMBINED
RETURN FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY FIRST, TWO
THOUSAND EIGHT MAY CONTINUE TO BE INCLUDED IN A COMBINED RETURN FOR
FUTURE TAXABLE YEARS, PROVIDED THAT ONCE THAT BANKING CORPORATION HAS
BEEN INCLUDED IN A COMBINED RETURN FOR ANY TAXABLE YEAR BEGINNING ON OR
AFTER JANUARY FIRST, TWO THOUSAND EIGHT, 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 LIABILITY UNDER THIS ARTICLE OF ANY OF
THE CORPORATIONS INCLUDED IN THE COMBINED RETURN. FURTHER, THE CREDIT
CARD BANK WILL BE INCLUDED IN A COMBINED RETURN WITH (I) ANY BANKING
CORPORATION NOT SUBJECT TO TAX UNDER THIS ARTICLE SIXTY-FIVE PERCENT OR
MORE OF WHOSE VOTING STOCK IS OWNED OR CONTROLLED, DIRECTLY OR INDIRECT-
LY, BY THE CREDIT CARD BANK, OR (II) ANY BANKING CORPORATION OR BANK
HOLDING COMPANY NOT SUBJECT TO TAX UNDER THIS ARTICLE WHICH OWNS OR
CONTROLS, DIRECTLY OR INDIRECTLY, SIXTY-FIVE PERCENT OR MORE OF THE
VOTING STOCK OF THE CREDIT CARD BANK, OR (III) ANY BANKING CORPORATION
NOT SUBJECT TO TAX UNDER THIS ARTICLE 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 (I),
(II) AND (III) 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 INVESTIGATION AND REPORTING, MARKETING, RESEARCH, ADVER-
TISING, MAILING, CUSTOMER SERVICE, INFORMATION TECHNOLOGY, LENDING AND
S. 3456 81
FINANCING SERVICES, AND COMMUNICATIONS SERVICES, BUT WILL NOT INCLUDE
ACCOUNTING, LEGAL OR PERSONNEL SERVICES.
(VI)(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 ARTICLE, ARTICLE NINE-A OR ARTICLE THIRTY-
THREE OF THIS CHAPTER OR OTHERWISE REQUIRED TO BE INCLUDED IN A COMBINED
RETURN UNDER THIS ARTICLE, ARTICLE NINE-A OR ARTICLE THIRTY-THREE OF
THIS CHAPTER, AND IS THE FEWEST TIERS OF CORPORATIONS AWAY IN THE OWNER-
SHIP 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 CONTROLLING 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 ARTICLE.
(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 ARTICLE, THEN THE CAPTIVE REIT
OR CAPTIVE RIC MUST BE INCLUDED IN A COMBINED RETURN OR REPORT 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 ARTICLE, THEN THE CAPTIVE REIT OR CAPTIVE RIC
MUST BE INCLUDED IN A COMBINED RETURN UNDER THIS ARTICLE.
(D) IF THE CORPORATION WHICH DIRECTLY OWNS OR CONTROLS THE VOTING
STOCK OF THE CAPTIVE REIT OR CAPTIVE RIC IS DESCRIBED IN SUBPARAGRAPH
(II) OR (IV) OF PARAGRAPH FOUR OF THIS SUBSECTION AS A CORPORATION NOT
PERMITTED 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 OR REPORT THE CAPTIVE REIT OR CAPTIVE RIC SHOULD
BE INCLUDED. IF, UNDER CLAUSE (C) OF THIS SUBPARAGRAPH, THE CORPORATION
THAT IS THE CLOSEST CONTROLLING STOCKHOLDER OF THE CAPTIVE REIT OR
CAPTIVE RIC IS DESCRIBED IN SUBPARAGRAPH (II) OR (IV) OF PARAGRAPH FOUR
OF THIS SUBSECTION 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 CONTROL-
LING 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 SUBSECTION, 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-
S. 3456 82
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 MINIMUS, 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 ARTICLE OR ARTICLE
NINE-A OR ARTICLE THIRTY-THREE OF THIS CHAPTER. IN THAT INSTANCE, THE
CAPTIVE REIT OR CAPTIVE RIC IS SUBJECT TO THE PROVISIONS OF SUBDIVISION
FIVE OR SEVEN OF SECTION TWO HUNDRED NINE 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.
(VII) (A) FOR PURPOSES OF THIS SUBPARAGRAPH, THE TERM "CLOSEST
CONTROLLING STOCKHOLDER" MEANS THE CORPORATION THAT INDIRECTLY OWNS OR
CONTROLS OVER FIFTY PERCENT OF THE VOTING STOCK OF AN OVERCAPITALIZED
CAPTIVE INSURANCE COMPANY, IS SUBJECT TO TAX UNDER THIS ARTICLE OR ARTI-
CLE NINE-A OF THIS CHAPTER OR OTHERWISE REQUIRED TO BE INCLUDED IN A
COMBINED RETURN UNDER THIS ARTICLE OR ARTICLE NINE-A OF THIS CHAPTER,
AND IS THE FEWEST TIERS OF CORPORATIONS AWAY IN THE OWNERSHIP STRUCTURE
FROM THE OVERCAPITALIZED CAPTIVE INSURANCE COMPANY. THE COMMISSIONER IS
AUTHORIZED TO PRESCRIBE BY REGULATION OR PUBLISHED GUIDANCE THE CRITERIA
FOR DETERMINING THE CLOSEST CONTROLLING STOCKHOLDER.
(B) AN OVERCAPITALIZED CAPTIVE INSURANCE COMPANY MUST BE INCLUDED IN A
COMBINED RETURN WITH THE BANKING CORPORATION OR BANK HOLDING COMPANY
THAT DIRECTLY OWNS OR CONTROLS OVER FIFTY PERCENT OF THE VOTING STOCK OF
THE OVERCAPITALIZED CAPTIVE INSURANCE COMPANY IF THAT BANKING CORPO-
RATION OR BANK HOLDING COMPANY IS SUBJECT TO TAX OR REQUIRED TO BE
INCLUDED IN A COMBINED RETURN UNDER THIS ARTICLE.
(C) IF OVER FIFTY PERCENT OF THE VOTING STOCK OF AN OVERCAPITALIZED
CAPTIVE INSURANCE COMPANY IS NOT DIRECTLY OWNED OR CONTROLLED BY A BANK-
ING CORPORATION OR BANK HOLDING COMPANY THAT IS SUBJECT TO TAX OR
REQUIRED TO BE INCLUDED IN A COMBINED RETURN UNDER THIS ARTICLE, THEN
THE OVERCAPITALIZED CAPTIVE INSURANCE COMPANY MUST BE INCLUDED IN A
COMBINED RETURN OR REPORT WITH THE CORPORATION THAT IS THE CLOSEST
CONTROLLING STOCKHOLDER OF THE OVERCAPITALIZED CAPTIVE INSURANCE COMPA-
NY. IF THE CLOSEST CONTROLLING STOCKHOLDER OF THE OVERCAPITALIZED
CAPTIVE INSURANCE COMPANY 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 ARTICLE, THEN THE OVERCAPITALIZED CAPTIVE
INSURANCE COMPANY MUST BE INCLUDED IN A COMBINED RETURN UNDER THIS ARTI-
CLE.
(D) IF THE CORPORATION THAT DIRECTLY OWNS OR CONTROLS THE VOTING STOCK
OF THE OVERCAPITALIZED CAPTIVE INSURANCE COMPANY IS DESCRIBED IN SUBPAR-
AGRAPH (II) OR (IV) OF PARAGRAPH FOUR OF THIS SUBSECTION AS A CORPO-
RATION NOT PERMITTED TO MAKE A COMBINED RETURN, THEN THE PROVISIONS IN
CLAUSE (C) OF THIS SUBPARAGRAPH MUST BE APPLIED TO DETERMINE THE CORPO-
RATION IN WHOSE COMBINED RETURN OR REPORT THE OVERCAPITALIZED CAPTIVE
INSURANCE COMPANY SHOULD BE INCLUDED. IF, UNDER CLAUSE (C) OF THIS
SUBPARAGRAPH, THE CORPORATION THAT IS THE CLOSEST CONTROLLING STOCKHOLD-
ER OF THE OVERCAPITALIZED CAPTIVE INSURANCE COMPANY IS DESCRIBED IN
SUBPARAGRAPH (II) OR (IV) OF PARAGRAPH FOUR OF THIS SUBSECTION AS A
CORPORATION NOT PERMITTED TO MAKE A COMBINED RETURN, THEN THAT CORPO-
RATION IS DEEMED NOT TO BE IN THE OWNERSHIP STRUCTURE OF THE OVERCAPI-
TALIZED CAPTIVE INSURANCE COMPANY, AND THE CLOSEST CONTROLLING STOCK-
HOLDER WILL BE DETERMINED WITHOUT REGARD TO THAT CORPORATION.
S. 3456 83
(E) IF AN OVERCAPITALIZED CAPTIVE INSURANCE COMPANY IS REQUIRED UNDER
THIS SUBPARAGRAPH 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
SUBSECTION, THE OVERCAPITALIZED CAPTIVE INSURANCE COMPANY MUST BE
INCLUDED IN THAT COMBINED RETURN WITH THOSE CORPORATIONS.
(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, CAPTIVE RIC OR OVERCAPITALIZED CAPTIVE
INSURANCE COMPANY. 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
COMBINED 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 SUBSECTION 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 FOURTEEN HUNDRED FIFTY-THREE OF THIS ARTICLE. IN THE CASE OF
A CAPTIVE RIC REQUIRED UNDER THIS SUBSECTION TO BE INCLUDED IN A
COMBINED RETURN, "ENTIRE NET INCOME" 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 THAT CODE,
SUBJECT TO THE MODIFICATIONS REQUIRED BY SECTION FOURTEEN HUNDRED
FIFTY-THREE OF THIS ARTICLE. 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 WILL BE LIMITED TO THE FOLLOWING
PERCENTAGES: (A) FIFTY PERCENT FOR TAXABLE YEARS BEGINNING ON OR AFTER
JANUARY FIRST, TWO THOUSAND EIGHT AND BEFORE JANUARY FIRST, TWO THOUSAND
NINE; (B) TWENTY-FIVE PERCENT FOR TAXABLE YEARS BEGINNING ON OR AFTER
JANUARY FIRST, TWO THOUSAND NINE AND BEFORE JANUARY FIRST, TWO THOUSAND
ELEVEN; AND (C) ZERO PERCENT 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 SUCH SECTION FIFTEEN HUNDRED FOUR.
(III) IN THE CASE OF AN OVERCAPITALIZED CAPTIVE INSURANCE COMPANY
REQUIRED UNDER THIS SUBSECTION TO BE INCLUDED IN A COMBINED RETURN,
ENTIRE NET INCOME MUST BE COMPUTED AS REQUIRED BY SECTION FOURTEEN
HUNDRED FIFTY-THREE OF THIS ARTICLE.
(4) (I) IN NO EVENT SHALL AN ITEM OF INCOME OR EXPENSE OF A CORPO-
RATION ORGANIZED UNDER THE LAWS OF A COUNTRY OTHER THAN THE UNITED
STATES BE INCLUDED IN A COMBINED RETURN UNLESS IT IS INCLUDIBLE IN
ENTIRE NET INCOME OR ALTERNATIVE ENTIRE NET INCOME, AS THE CASE MAY BE,
S. 3456 84
NOR SHALL AN ASSET OF SUCH A CORPORATION BE INCLUDED IN A COMBINED
RETURN UNLESS IT IS INCLUDED IN TAXABLE ASSETS.
(II) IN NO EVENT SHALL A CORPORATION ORGANIZED UNDER THE LAWS OF THE
UNITED STATES, THIS STATE OR ANY OTHER STATE, BE INCLUDED IN A COMBINED
RETURN WITH A CORPORATION ORGANIZED UNDER THE LAWS OF A COUNTRY OTHER
THAN THE UNITED STATES.
(III) IN NO EVENT SHALL A CORPORATION WHICH HAS MADE AN ELECTION
PURSUANT TO SUBSECTION (D) OF SECTION FOURTEEN HUNDRED FIFTY-TWO OF THIS
ARTICLE TO BE SUBJECT TO THE TAX IMPOSED BY ARTICLE NINE-A OF THIS CHAP-
TER BE INCLUDED IN A COMBINED RETURN FOR THOSE TAXABLE YEARS FOR WHICH
IT IS SUBJECT TO THE TAX IMPOSED BY ARTICLE NINE-A OF THIS CHAPTER.
(IV) IN NO EVENT SHALL A CORPORATION WHOSE NET WORTH RATIO IS LESS
THAN FIVE PERCENT AND WHOSE TOTAL ASSETS ARE COMPRISED OF THIRTY-THREE
PERCENT OR MORE OF MORTGAGES BE INCLUDED IN A COMBINED RETURN FOR THOSE
TAXABLE YEARS FOR WHICH ITS TAX IS DETERMINED PURSUANT TO SUBPARAGRAPH
(II) OR (III) OF PARAGRAPH ONE OF SUBSECTION (B) OF SECTION FOURTEEN
HUNDRED FIFTY-FIVE OF THIS ARTICLE.
(5) TAX LIABILITY UNDER THIS ARTICLE MAY BE DEEMED TO BE IMPROPERLY
REFLECTED BECAUSE OF INTERCOMPANY TRANSACTIONS OR SOME AGREEMENT, UNDER-
STANDING, ARRANGEMENT OR TRANSACTION REFERRED TO IN SUBSECTION (G) OF
THIS SECTION.
(G) IN CASE IT SHALL APPEAR TO THE TAX COMMISSION THAT ANY AGREEMENT,
UNDERSTANDING OR ARRANGEMENT EXISTS BETWEEN THE TAXPAYER AND ANY OTHER
CORPORATION OR ANY PERSON OR FIRM, WHEREBY THE ACTIVITY, BUSINESS,
INCOME OR ASSETS OF THE TAXPAYER WITHIN THE STATE IS IMPROPERLY OR INAC-
CURATELY REFLECTED, THE TAX COMMISSION IS AUTHORIZED AND EMPOWERED, IN
ITS DISCRETION AND IN SUCH MANNER AS IT MAY DETERMINE, TO ADJUST ITEMS
OF INCOME OR DEDUCTIONS IN COMPUTING ENTIRE NET INCOME OR ALTERNATIVE
ENTIRE NET INCOME AND TO ADJUST ASSETS, AND TO ADJUST WAGES, SALARIES
AND OTHER PERSONAL SERVICE COMPENSATION, RECEIPTS OR DEPOSITS IN COMPUT-
ING ANY ALLOCATION PERCENTAGE, PROVIDED ONLY THAT ENTIRE NET INCOME OR
ALTERNATIVE ENTIRE NET INCOME BE ADJUSTED ACCORDINGLY AND THAT ANY ASSET
DIRECTLY TRACEABLE TO THE ELIMINATION OF ANY RECEIPT BE ELIMINATED FROM
ASSETS SO AS TO ACCURATELY DETERMINE THE TAX. IF HOWEVER, IN THE DETER-
MINATION OF THE TAX COMMISSION, SUCH ADJUSTMENTS DO NOT, OR CANNOT
EFFECTIVELY PROVIDE FOR THE ACCURATE DETERMINATION OF THE TAX, THE
COMMISSION SHALL BE AUTHORIZED TO REQUIRE THE FILING OF A COMBINED
REPORT BY THE TAXPAYER AND ANY SUCH OTHER CORPORATIONS. WHERE (1) ANY
TAXPAYER CONDUCTS ITS ACTIVITY OR BUSINESS UNDER ANY AGREEMENT, ARRANGE-
MENT OR UNDERSTANDING IN SUCH MANNER AS EITHER DIRECTLY OR INDIRECTLY TO
BENEFIT ITS MEMBERS OR STOCKHOLDERS, OR ANY OF THEM, OR ANY PERSON OR
PERSONS DIRECTLY OR INDIRECTLY INTERESTED IN SUCH ACTIVITY OR BUSINESS,
BY ENTERING INTO ANY TRANSACTION AT MORE OR LESS THAN A FAIR PRICE
WHICH, BUT FOR SUCH AGREEMENT, ARRANGEMENT OR UNDERSTANDING, MIGHT HAVE
BEEN PAID OR RECEIVED THEREFOR, OR (2) ANY TAXPAYER ENTERS INTO ANY
TRANSACTION WITH ANOTHER CORPORATION ON SUCH TERMS AS TO CREATE AN
IMPROPER LOSS OR NET INCOME, THE TAX COMMISSION MAY INCLUDE IN THE
ENTIRE NET INCOME OR ALTERNATIVE ENTIRE NET INCOME OF THE TAXPAYER THE
FAIR PROFITS WHICH, BUT FOR SUCH AGREEMENT, ARRANGEMENT OR UNDERSTAND-
ING, THE TAXPAYER MIGHT HAVE DERIVED FROM SUCH TRANSACTION.
§ 1463. PAYMENT OF TAX. (A) TO THE EXTENT THE TAX IMPOSED BY SECTION
FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE SHALL NOT HAVE BEEN PREVIOUS-
LY PAID PURSUANT TO SECTION FOURTEEN HUNDRED SIXTY-ONE,
(1) SUCH TAX, OR THE BALANCE THEREOF, SHALL BE PAYABLE TO THE TAX
COMMISSION IN FULL AT THE TIME ITS RETURN IS REQUIRED TO BE FILED, AND
S. 3456 85
(2) SUCH TAX, OR THE BALANCE THEREOF, IMPOSED ON ANY TAXPAYER WHICH
CEASED TO EXERCISE ITS FRANCHISE OR TO BE SUBJECT TO THE TAX IMPOSED BY
THIS ARTICLE SHALL BE PAYABLE TO THE TAX COMMISSION AT THE TIME THE
RETURN IS REQUIRED TO BE FILED, PROVIDED SUCH TAX OF A DOMESTIC CORPO-
RATION WHICH CONTINUES TO POSSESS ITS FRANCHISE SHALL BE SUBJECT TO
ADJUSTMENT AS THE CIRCUMSTANCES MAY REQUIRE; ALL OTHER TAXES OF ANY SUCH
TAXPAYER, WHICH PURSUANT TO THE FOREGOING PROVISIONS OF THIS SUBSECTION
WOULD OTHERWISE BE PAYABLE SUBSEQUENT TO THE TIME SUCH RETURN IS
REQUIRED TO BE FILED, SHALL NEVERTHELESS BE PAYABLE AT SUCH TIME.
(B) IF THE TAXPAYER, WITHIN THE TIME PRESCRIBED BY SUBSECTION (C) OF
SECTION FOURTEEN HUNDRED SIXTY-TWO OF THIS ARTICLE, SHALL HAVE APPLIED
FOR AN AUTOMATIC EXTENSION OF TIME TO FILE ITS ANNUAL RETURN AND SHALL
HAVE PAID TO THE COMMISSIONER OF TAXATION AND FINANCE ON OR BEFORE THE
DATE SUCH APPLICATION IS FILED AN AMOUNT PROPERLY ESTIMATED AS PROVIDED
BY SAID SUBSECTION THE ONLY AMOUNT PAYABLE IN ADDITION TO THE TAX SHALL
BE INTEREST AT THE UNDERPAYMENT RATE SET BY THE COMMISSIONER PURSUANT TO
SECTION ONE THOUSAND NINETY-SIX OF THIS CHAPTER, OR IF NO RATE IS SET,
AT THE RATE OF SIX PER CENT 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:
(1) AN AMOUNT SO PAID SHALL BE DEEMED PROPERLY ESTIMATED IF IT IS
EITHER (I) NOT LESS THAN NINETY PER CENT OF THE TAX AS FINALLY DETER-
MINED, OR (II) NOT LESS THAN THE TAX SHOWN ON THE TAXPAYER'S RETURN FOR
THE PRECEDING TAXABLE YEAR, IF SUCH PRECEDING YEAR WAS A TAXABLE YEAR OF
TWELVE MONTHS; AND
(2) THE TIME WHEN A RETURN IS REQUIRED TO BE FILED SHALL BE DETERMINED
WITHOUT REGARD TO ANY EXTENSION OF TIME FOR FILING SUCH RETURN.
(C) THE TAX COMMISSION MAY GRANT A REASONABLE EXTENSION OF TIME FOR
PAYMENT OF ANY TAX IMPOSED BY THIS ARTICLE UNDER SUCH CONDITIONS AS IT
DEEMS JUST AND PROPER.
§ 1466. DEPOSIT AND DISPOSITION OF REVENUE. ALL TAXES, INTEREST AND
PENALTIES COLLECTED OR RECEIVED BY THE TAX COMMISSION UNDER THIS ARTICLE
SHALL BE DEPOSITED AND DISPOSED OF PURSUANT TO THE PROVISIONS OF SECTION
ONE HUNDRED SEVENTY-ONE-A OF THIS CHAPTER.
§ 1467. SECRECY REQUIRED OF OFFICIALS; PENALTY FOR VIOLATION. (A)
EXCEPT IN ACCORDANCE WITH THE PROPER JUDICIAL ORDER OR AS OTHERWISE
PROVIDED BY LAW, IT SHALL BE UNLAWFUL FOR THE COMMISSIONER OF TAXATION
AND FINANCE, ANY OFFICER OR EMPLOYEE OF THE DEPARTMENT OF TAXATION AND
FINANCE, OR ANY PERSON WHO, PURSUANT TO THIS SECTION, IS PERMITTED TO
INSPECT ANY RETURN, OR ANY PERSON ENGAGED OR RETAINED BY SUCH DEPARTMENT
ON AN INDEPENDENT CONTRACT BASIS, OR ANY PERSON WHO IN ANY MANNER MAY
ACQUIRE KNOWLEDGE OF THE CONTENTS OF A RETURN FILED PURSUANT TO THIS
ARTICLE, TO DIVULGE OR MAKE KNOWN IN ANY MANNER THE AMOUNT OF INCOME OR
ANY PARTICULARS SET FORTH OR DISCLOSED IN ANY RETURN REQUIRED UNDER THIS
ARTICLE. THE OFFICERS CHARGED WITH THE CUSTODY OF SUCH RETURNS SHALL NOT
BE REQUIRED TO PRODUCE ANY OF THEM OR EVIDENCE OF ANYTHING CONTAINED IN
THEM IN ANY ACTION OR PROCEEDINGS IN ANY COURT, EXCEPT ON BEHALF OF THE
STATE OR THE COMMISSIONER OF TAXATION AND FINANCE IN AN ACTION OR
PROCEEDING UNDER THE PROVISIONS OF THIS CHAPTER OR IN ANY OTHER ACTION
OR PROCEEDING INVOLVING THE COLLECTION OF A TAX DUE UNDER THIS CHAPTER
TO WHICH THE STATE OR THE COMMISSIONER OF TAXATION AND FINANCE IS A
PARTY OR A CLAIMANT OR ON BEHALF OF ANY PARTY IN AN ACTION OR PROCEEDING
UNDER THE PROVISIONS OF THIS ARTICLE WHEN THE RETURNS OR FACTS SHOWN
THEREBY ARE DIRECTLY INVOLVED IN SUCH ACTION OR PROCEEDING, IN ANY OF
WHICH EVENTS THE COURT MAY REQUIRE THE PRODUCTION OF AND MAY ADMIT IN
S. 3456 86
EVIDENCE SO MUCH OF SAID RETURNS OR THE FACTS SHOWN THEREBY AS ARE
PERTINENT TO THE ACTION OR PROCEEDING AND NO MORE. THE COMMISSIONER OF
TAXATION AND FINANCE MAY, NEVERTHELESS, PUBLISH A COPY OR A SUMMARY OF
ANY DETERMINATION OR DECISION RENDERED AFTER THE HEARING PROVIDED FOR IN
SECTION ONE THOUSAND EIGHTY-NINE OF THIS CHAPTER. NOTHING HEREIN SHALL
BE CONSTRUED TO PROHIBIT THE DELIVERY TO A TAXPAYER OR ITS DULY AUTHOR-
IZED REPRESENTATIVE OF A CERTIFIED COPY OF ANY RETURN FILED IN
CONNECTION WITH ITS TAX NOR TO PROHIBIT THE PUBLICATION OF STATISTICS SO
CLASSIFIED AS TO PREVENT THE IDENTIFICATION OF PARTICULAR RETURNS AND
THE ITEMS THEREOF, OR THE INSPECTION BY THE ATTORNEY-GENERAL OR OTHER
LEGAL REPRESENTATIVES OF THE STATE OF THE RETURN OF ANY TAXPAYER WHICH
SHALL BRING ACTION TO SET ASIDE OR REVIEW THE TAX BASED THEREON, OR
AGAINST WHICH AN ACTION OR PROCEEDING UNDER THIS CHAPTER HAS BEEN RECOM-
MENDED BY THE COMMISSIONER OF TAXATION AND FINANCE OR THE ATTORNEY-GEN-
ERAL OR HAS BEEN INSTITUTED; OR THE INSPECTION OF THE RETURNS OF ANY
TAXPAYER BY THE COMPTROLLER OR DULY DESIGNATED OFFICER OR EMPLOYEE OF
THE STATE DEPARTMENT OF AUDIT AND CONTROL FOR PURPOSES OF THE AUDIT OF A
REFUND OF ANY TAX PAID BY SUCH TAXPAYER UNDER THIS ARTICLE, OR THE
DISCLOSING TO A STATE AGENCY, PURSUANT TO SECTION ONE HUNDRED SEVENTY-
ONE-F OF THIS CHAPTER, OF THE AMOUNT OF AN OVERPAYMENT AND INTEREST
THEREON CERTIFIED TO THE COMPTROLLER TO BE CREDITED AGAINST A PAST-DUE
LEGALLY ENFORCEABLE DEBT OWED TO SUCH AGENCY AND OF THE NAME AND IDEN-
TIFICATION NUMBER OF THE TAXPAYER WHO MADE SUCH OVERPAYMENT, OR THE
DISCLOSING TO THE COMMISSIONER OF FINANCE OF THE CITY OF NEW YORK,
PURSUANT TO SECTION ONE HUNDRED SEVENTY-ONE-L OF THIS CHAPTER, OF THE
AMOUNT OF AN OVERPAYMENT AND INTEREST THEREON CERTIFIED TO THE COMP-
TROLLER TO BE CREDITED AGAINST A CITY OF NEW YORK TAX WARRANT JUDGMENT
DEBT AND OF THE NAME AND IDENTIFICATION NUMBER OF THE TAXPAYER WHO MADE
SUCH OVERPAYMENT. RETURNS SHALL BE PRESERVED FOR THREE YEARS AND THERE-
AFTER UNTIL THE COMMISSIONER OF TAXATION AND FINANCE ORDERS THEM TO BE
DESTROYED.
(B) (1) ANY OFFICER OR EMPLOYEE OF THE STATE WHO WILLFULLY VIOLATES
THE PROVISIONS OF SUBSECTION (A) OF THIS SECTION SHALL BE DISMISSED FROM
OFFICE AND BE INCAPABLE OF HOLDING ANY PUBLIC OFFICE IN THIS STATE FOR A
PERIOD OF FIVE YEARS THEREAFTER.
(2) CROSS-REFERENCE: FOR CRIMINAL PENALTIES, SEE ARTICLE THIRTY-SEVEN
OF THIS CHAPTER.
(C) NOTWITHSTANDING ANY PROVISIONS OF THIS SECTION, THE TAX COMMISSION
MAY PERMIT THE SECRETARY OF THE TREASURY OF THE UNITED STATES OR HIS
DELEGATES, OR THE PROPER OFFICER OF ANY OTHER STATE CHARGED WITH TAX
ADMINISTRATION, OR THE AUTHORIZED REPRESENTATIVE OF EITHER SUCH OFFICER,
TO INSPECT THE RETURNS FILED UNDER THIS ARTICLE, OR MAY FURNISH TO SUCH
OFFICER OR HIS AUTHORIZED REPRESENTATIVE AN ABSTRACT OF ANY RETURN OR
SUPPLY HIM WITH INFORMATION CONCERNING AN ITEM CONTAINED IN ANY RETURN,
OR DISCLOSED BY AN INVESTIGATION OF TAX LIABILITY UNDER THIS ARTICLE,
BUT SUCH PERMISSION SHALL BE GRANTED OR SUCH INFORMATION FURNISHED TO
SUCH OFFICER OR HIS REPRESENTATIVE ONLY IF THE LAWS OF THE UNITED STATES
OR OF SUCH OTHER STATE, AS THE CASE MAY BE, GRANT SUBSTANTIALLY SIMILAR
PRIVILEGES TO THE COMMISSION OR OFFICER OF THIS STATE CHARGED WITH THE
ADMINISTRATION OF THE TAX IMPOSED BY THIS ARTICLE AND SUCH INFORMATION
IS TO BE USED FOR TAX PURPOSES ONLY; AND PROVIDED FURTHER THE COMMIS-
SIONER OF TAXATION AND FINANCE MAY FURNISH TO THE SECRETARY OF THE TREA-
SURY OF THE UNITED STATES OR HIS DELEGATES SUCH RETURNS FILED UNDER THIS
ARTICLE AND OTHER TAX INFORMATION, AS HE MAY CONSIDER PROPER, FOR USE IN
COURT ACTIONS OR PROCEEDINGS UNDER THE INTERNAL REVENUE CODE, WHETHER
CIVIL OR CRIMINAL, WHERE A WRITTEN REQUEST THEREFOR HAS BEEN MADE TO THE
S. 3456 87
COMMISSIONER OF TAXATION AND FINANCE BY THE SECRETARY OF THE TREASURY OR
HIS DELEGATES PROVIDED THE LAWS OF THE UNITED STATES GRANT SUBSTANTIALLY
SIMILAR POWERS TO THE SECRETARY OF THE TREASURY OR HIS DELEGATES. WHERE
THE COMMISSIONER OF TAXATION AND FINANCE HAS SO AUTHORIZED USE OF
RETURNS OR OTHER INFORMATION IN SUCH ACTIONS OR PROCEEDINGS, OFFICERS
AND EMPLOYEES OF THE DEPARTMENT OF TAXATION AND FINANCE MAY TESTIFY IN
SUCH ACTIONS OR PROCEEDINGS IN RESPECT TO SUCH RETURNS OR OTHER TAX
INFORMATION.
(D) NOTWITHSTANDING THE PROVISIONS OF SUBSECTION (A) OF THIS SECTION,
THE TAX COMMISSION MAY PERMIT THE OFFICER CHARGED WITH THE ADMINIS-
TRATION OF A TAX ON OR MEASURED BY INCOME IMPOSED BY ANY CITY OF THE
STATE OF NEW YORK, OR THE AUTHORIZED REPRESENTATIVE OF SUCH OFFICER, TO
INSPECT THE RETURNS FILED UNDER THIS ARTICLE, OR MAY FURNISH TO SUCH
OFFICER OR HIS AUTHORIZED REPRESENTATIVE AN ABSTRACT OF ANY SUCH RETURN
OR SUPPLY INFORMATION CONCERNING AN ITEM CONTAINED IN ANY SUCH RETURN,
OR DISCLOSED BY ANY INVESTIGATION OF TAX LIABILITY UNDER THIS ARTICLE,
BUT SUCH PERMISSION SHALL BE GRANTED OR SUCH INFORMATION FURNISHED TO
SUCH OFFICER OR HIS REPRESENTATIVE ONLY IF THE LOCAL LAWS OF SUCH CITY
GRANT SUBSTANTIALLY SIMILAR PRIVILEGES TO THE COMMISSION OR OFFICER OF
THIS STATE CHARGED WITH THE ADMINISTRATION OF THE TAX IMPOSED BY THIS
ARTICLE AND SUCH INFORMATION IS TO BE USED FOR TAX PURPOSES ONLY; AND
PROVIDED FURTHER THE COMMISSIONER OF TAXATION AND FINANCE MAY FURNISH TO
SUCH CITY OFFICER OR HIS DELEGATES AND THE LEGAL REPRESENTATIVE OF SUCH
CITY SUCH RETURNS FILED UNDER THIS ARTICLE AND OTHER TAX INFORMATION, AS
HE MAY CONSIDER PROPER, FOR USE IN COURT ACTIONS OR PROCEEDINGS UNDER
SUCH LOCAL LAW, WHETHER CIVIL OR CRIMINAL, WHERE A WRITTEN REQUEST
THEREFOR HAS BEEN MADE TO THE COMMISSIONER OF TAXATION AND FINANCE BY
SUCH CITY OFFICER OR HIS DELEGATES OR BY SUCH LEGAL REPRESENTATIVE OF
SUCH CITY, PROVIDED THE LOCAL LAW OF SUCH CITY GRANTS SUBSTANTIALLY
SIMILAR POWERS TO THE CITY OFFICER CHARGED WITH THE ADMINISTRATION OF
THE CITY INCOME TAX OR HIS DELEGATES. WHERE THE COMMISSIONER OF TAXATION
AND FINANCE HAS SO AUTHORIZED USE OF RETURNS OR OTHER TAX INFORMATION IN
SUCH ACTIONS OR PROCEEDINGS, OFFICERS AND EMPLOYEES OF THE DEPARTMENT OF
TAXATION AND FINANCE MAY TESTIFY IN SUCH ACTIONS OR PROCEEDINGS IN
RESPECT TO SUCH RETURNS OR OTHER TAX INFORMATION.
(E) NOTWITHSTANDING THE PROVISIONS OF SUBSECTION (A) OF THIS SECTION,
THE TAX COMMISSION, IN ITS DISCRETION, MAY REQUIRE OR PERMIT ANY OR ALL
PERSONS LIABLE FOR ANY TAX IMPOSED BY THIS ARTICLE, TO MAKE PAYMENTS ON
ACCOUNT OF ESTIMATED TAX AND PAYMENT OF ANY TAX, PENALTY OR INTEREST
IMPOSED BY THIS ARTICLE TO BANKS, BANKING HOUSES OR TRUST COMPANIES
DESIGNATED BY THE TAX COMMISSION AND TO FILE DECLARATIONS OF ESTIMATED
TAX, APPLICATIONS FOR AUTOMATIC EXTENSIONS OF TIME TO FILE RETURNS, AND
RETURNS WITH SUCH BANKS, BANKING HOUSES OR TRUST COMPANIES AS AGENTS OF
THE TAX COMMISSION, IN LIEU OF MAKING ANY SUCH PAYMENT DIRECTLY TO THE
TAX COMMISSION. HOWEVER, THE TAX COMMISSION SHALL DESIGNATE ONLY SUCH
BANKS, BANKING HOUSES OR TRUST COMPANIES AS ARE OR SHALL BE DESIGNATED
BY THE COMPTROLLER AS DEPOSITORIES PURSUANT TO SECTION FOURTEEN HUNDRED
SIXTY-SIX OF THIS ARTICLE.
(F) NOTWITHSTANDING THE PROVISIONS OF SUBSECTION (A) OF THIS SECTION,
THE COMMISSIONER MAY DISCLOSE TO A TAXPAYER OR A TAXPAYER'S RELATED
MEMBER, AS DEFINED IN SUBSECTION (S) OF SECTION FOURTEEN HUNDRED FIFTY-
THREE OF THIS ARTICLE, INFORMATION RELATING TO ANY ROYALTY PAID,
INCURRED OR RECEIVED BY SUCH TAXPAYER OR RELATED MEMBER TO OR FROM THE
OTHER, INCLUDING THE TREATMENT OF SUCH PAYMENTS BY THE TAXPAYER OR THE
RELATED MEMBER IN ANY REPORT OR RETURN TRANSMITTED TO THE COMMISSIONER
UNDER THIS CHAPTER.
S. 3456 88
§ 1468. PROCEDURAL PROVISIONS. THE PROVISIONS OF ARTICLE TWENTY-SEVEN
OF THIS CHAPTER SHALL APPLY TO THE PROVISIONS OF THIS ARTICLE IN THE
SAME MANNER AND WITH THE SAME FORCE AND EFFECT AS IF THE LANGUAGE OF
SUCH ARTICLE TWENTY-SEVEN HAD BEEN INCORPORATED IN FULL INTO THIS ARTI-
CLE AND HAD EXPRESSLY REFERRED TO THE TAX UNDER THIS ARTICLE, EXCEPT TO
THE EXTENT THAT ANY SUCH PROVISION IS EITHER INCONSISTENT WITH A
PROVISION OF THIS ARTICLE OR IS NOT RELEVANT TO THIS ARTICLE.
§ 2. This act shall take effect immediately and shall apply to taxable
years starting January 1, 2020.
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