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This entry was published on 2014-09-22
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SECTION 1504
Allocation
Tax (TAX) CHAPTER 60, ARTICLE 33
§ 1504. Allocation. (a) Allocation of entire net income. The portion
of entire net income of a taxpayer to be allocated within the state
shall be the amount determined by multiplying such income by the income
allocation percentage determined by:

(1) ascertaining the percentage which the taxpayer's New York premiums
for the taxable year bear to the taxpayer's total premiums for the
taxable year, and multiplying such percentage by nine,

(2) ascertaining the percentage which total wages, salaries, personal
service compensation and commissions for the taxable year of employees,
agents and representatives of the taxpayer within New York bear to the
total wages, salaries, personal service compensation and commissions for
the taxable year of all the taxpayer's employees, agents and
representatives, and

(3) adding the amounts determined under paragraphs one and two and
dividing the sum by ten.

(b) Definition of premiums. (1) For purposes of paragraph one of
subdivision (a), the term "premium" includes all amounts received as
consideration for insurance contracts, reinsurance contracts and annuity
contracts and shall include premium deposits, assessments, policy fees,
membership fees and every other compensation for such contract. The term
"total premiums" means total gross premiums or deposit premiums or
assessments, less returns thereon, on all policies, annuity contracts,
certificates, renewals, policies subsequently cancelled, insurance and
reinsurance executed, issued or delivered on property or risks,
including premiums for reinsurance assumed, less dividends on such total
premiums, including unused or unabsorbed portions of premium deposits
paid or credited to policyholders but not including deferred dividends
paid in cash to policyholders on maturing policies, nor cash surrender
values, and less premiums on reinsurance ceded.

(2) For purposes of paragraph one of subdivision (a), "New York
premiums" shall be determined as follows:

(A) For all premiums other than premiums described in subparagraph (B)
or (C) of this paragraph, "New York premiums" means that portion of
total premiums written, procured or received on property or risks
located or resident in New York and shall also include premiums written,
procured or received in this state on business which cannot be
specifically assigned as located or resident in any other state or
states, other than premiums described in subdivision (b) of section
fifteen hundred twelve. Provided however, in the case of special risk
premiums, "New York premiums" shall include only those premiums written,
procured or received in this state on property or risks located or
resident in this state.

(B) For premiums on reinsurance, "New York premiums" shall be
determined as provided in subparagraph (A) of this paragraph except that
where the location or residence of the property or risk covered by the
reinsurance cannot be ascertained, "New York premiums" shall mean the
portion of premiums for reinsurance determined by multiplying the amount
of premiums from reinsurance ceded by each company to the taxpayer by
the percentage determined under paragraph one of subdivision (a) of this
section for each such ceding company for the preceding taxable year.

(C) For premiums from marine insurance, "New York premiums" means (i)
that portion of premiums from such marine insurance as are written,
procured or received on property or risks located or resident in this
state and, (ii) to the extent not otherwise includible in "New York
premiums" under clause (i) hereof, the premiums for such marine
insurance written within this state on property or risks which cannot be
specifically assigned as located or resident in any other state or
country, provided however, in the case of special risk premiums, "New
York premiums" shall include only those premiums written, procured or
received in this state on property or risks located or resident in this
state. For purposes of this subparagraph, marine insurance means
insurance written, procured or received upon hulls, freights or
disbursements, or upon goods, wares, merchandise and all other personal
property and interests therein, in the course of exportation from,
importation into any country, or transportation coastwise, including
transportation by land or water from point of origin to final
destination in respect to, appertaining to, or in connection with, any
and all risks or perils of navigation, transit or transportation, and
while being prepared for, and while awaiting shipment, and during any
delays, storage, transshipment or reshipment incident thereto, including
war risks and marine builder's risks.

(3) For the purpose of paragraph one of subdivision (a), "total
premiums" shall not include special risk premiums unless the special
risk premium was written, procured or received in this state on property
or risks located or resident in this state. "Total premiums" shall be
reported on a written basis or on a paid-for basis, consistent with the
basis required by the annual statement filed with the superintendent of
financial services pursuant to section three hundred seven of the
insurance law.

(c) Allocation of capital. (1) Business capital and investment
capital. The portion of the taxpayer's business and investment capital
of a taxpayer to be allocated within the state shall be determined by
multiplying the amount thereof by the allocation percentage determined
as provided in subdivision (a) of this section.

(2) Subsidiary capital. The portion of the taxpayer's subsidiary
capital to be allocated within the state shall be determined by
multiplying the amount of subsidiary capital invested in each subsidiary
during the period covered by its return (or, in the case of any such
capital so invested during only a portion of such period, such portion
of such capital) by the percentage, if any, of the entire capital, or
the issued capital stock, or the net income, as the case may be, of such
subsidiary required to be allocated within the state on the return or
returns, if any, required of such subsidiary under this chapter for the
preceding year, and adding the sums so obtained.

(d) If it shall appear to the tax commission that the income
allocation percentage determined as hereinabove provided does not
properly reflect the activity, business or income of a taxpayer within
the state, the tax commission shall be authorized, in its discretion, to
adjust it by:

(1) excluding one or more factors therein;

(2) including one or more other factors therein, such as expenses,
purchases, receipts other than premiums, real property or tangible
personal property;

(3) or any other similar or different method calculated to effect a
fair and proper allocation of the income and capital reasonably
attributable to the state. The tax commission from time to time shall
publish all rulings of general public interest with respect to any
application of the provisions of this subdivision.