Legislation

Search OpenLegislation Statutes
This entry was published on 2021-04-23
The selection dates indicate all change milestones for the entire volume, not just the location being viewed. Specifying a milestone date will retrieve the most recent version of the location before that date.
SECTION 210
Computation of tax
Tax (TAX) CHAPTER 60, ARTICLE 9-A
§ 210. Computation of tax. 1. The tax imposed by subdivision one of
section two hundred nine of this chapter shall be: (A) in the case of
each taxpayer other than a New York S corporation or a qualified
homeowners association, the highest of the amounts prescribed in
paragraphs (a), (b), and (d) of this subdivision, (B) in the case of
each New York S corporation, the amount prescribed in paragraph (d) of
this subdivision, and (C) in the case of a qualified homeowners
association, the highest of the amounts prescribed in paragraphs (a) and
(b) of this subdivision. For purposes of this paragraph, the term
"qualified homeowners association" means a homeowners association, as
such term is defined in subsection (c) of section five hundred
twenty-eight of the internal revenue code without regard to subparagraph
(E) of paragraph one of such subsection (relating to elections to be
taxed pursuant to such section), which has no homeowners association
taxable income, as such term is defined in subsection (d) of such
section. Provided, however, that in the case of a small business
taxpayer (other than a New York S corporation) as defined in paragraph
(f) of this subdivision, for taxable years beginning before January
first, two thousand sixteen, if the amount prescribed in such paragraph
(b) is higher than the amount prescribed in such paragraph (a) solely by
reason of the application of the rate applicable to small business
taxpayers, then with respect to such taxpayer the tax referred to in the
previous sentence shall be higher of the amounts prescribed in
paragraphs (a) and (d) of this subdivision.

(a) Business income base. For taxable years beginning before January
first, two thousand sixteen, the amount prescribed by this paragraph
shall be computed at the rate of seven and one-tenth percent of the
taxpayer's business income base. For taxable years beginning on or after
January first, two thousand sixteen, the amount prescribed by this
paragraph shall be six and one-half percent of the taxpayer's business
income base. For taxable years beginning on or after January first, two
thousand twenty-one and before January first, two thousand twenty-four
for any taxpayer with a business income base for the taxable year of
more than five million dollars, the amount prescribed by this paragraph
shall be seven and one-quarter percent of the taxpayer's business income
base. The taxpayer's business income base shall mean the portion of the
taxpayer's business income apportioned within the state as hereinafter
provided. However, in the case of a small business taxpayer, as defined
in paragraph (f) of this subdivision, the amount prescribed by this
paragraph shall be computed pursuant to subparagraph (iv) of this
paragraph and in the case of a manufacturer, as defined in subparagraph
(vi) of this paragraph, the amount prescribed by this paragraph shall be
computed pursuant to subparagraph (vi) of this paragraph, and, in the
case of a qualified emerging technology company, as defined in
subparagraph (vii) of this paragraph, the amount prescribed by this
paragraph shall be computed pursuant to subparagraph (vii) of this
paragraph.

(iv) for taxable years beginning before January first, two thousand
sixteen, if the business income base is not more than two hundred ninety
thousand dollars the amount shall be six and one-half percent of the
business income base; if the business income base is more than two
hundred ninety thousand dollars but not over three hundred ninety
thousand dollars the amount shall be the sum of (1) eighteen thousand
eight hundred fifty dollars, (2) seven and one-tenth percent of the
excess of the business income base over two hundred ninety thousand
dollars but not over three hundred ninety thousand dollars and (3) four
and thirty-five hundredths percent of the excess of the business income
base over three hundred fifty thousand dollars but not over three
hundred ninety thousand dollars;

(v) if the taxable period to which subparagraph (iv) of this paragraph
applies is less than twelve months, the amount prescribed by this
paragraph shall be computed as follows:

(A) Multiply the business income base for such taxpayer by twelve;

(B) Divide the result obtained in (A) by the number of months in the
taxable year;

(C) Compute an amount pursuant to subparagraph (iv) as if the result
obtained in (B) were the taxpayer's business income base;

(D) Multiply the result obtained in (C) by the number of months in the
taxpayer's taxable year;

(E) Divide the result obtained in (D) by twelve.

(vi) for taxable years beginning on or after January first, two
thousand fourteen, the amount prescribed by this paragraph for a
taxpayer that is a qualified New York manufacturer, shall be computed at
the rate of zero percent of the taxpayer's business income base. The
term "manufacturer" shall mean a taxpayer that during the taxable year
is principally engaged in the production of goods by manufacturing,
processing, assembling, refining, mining, extracting, farming,
agriculture, horticulture, floriculture, viticulture or commercial
fishing. However, the generation and distribution of electricity, the
distribution of natural gas, and the production of steam associated with
the generation of electricity shall not be qualifying activities for a
manufacturer under this subparagraph. Moreover, in the case of a
combined report, the combined group shall be considered a "manufacturer"
for purposes of this subparagraph only if the combined group during the
taxable year is principally engaged in the activities set forth in this
paragraph, or any combination thereof. A taxpayer or, in the case of a
combined report, a combined group shall be "principally engaged" in
activities described above if, during the taxable year, more than fifty
percent of the gross receipts of the taxpayer or combined group,
respectively, are derived from receipts from the sale of goods produced
by such activities. In computing a combined group's gross receipts,
intercorporate receipts shall be eliminated. A "qualified New York
manufacturer" is a manufacturer that has property in New York that is
described in clause (A) of subparagraph (i) of paragraph (b) of
subdivision one of section two hundred ten-B of this article and either
(I) the adjusted basis of such property for New York state tax purposes
at the close of the taxable year is at least one million dollars or (II)
all of its real and personal property is located in New York. A taxpayer
or, in the case of a combined report, a combined group, that does not
satisfy the principally engaged test may be a qualified New York
manufacturer if the taxpayer or the combined group employs during the
taxable year at least two thousand five hundred employees in
manufacturing in New York and the taxpayer or the combined group has
property in the state used in manufacturing, the adjusted basis of which
for New York state tax purposes at the close of the taxable year is at
least one hundred million dollars.

(vii) For a taxpayer that is defined as a qualified emerging
technology company under paragraph (c) of subdivision one of section
thirty-one hundred two-e of the public authorities law regardless of the
ten million dollar limitation expressed in subparagraph one of such
paragraph (c) the amount prescribed by this paragraph shall be computed
at the rate of 5.7 percent for taxable years beginning on or after
January first, two thousand fifteen and before January first, two
thousand sixteen, 5.5 percent for taxable years beginning on or after
January first two thousand sixteen and before January first, two
thousand eighteen, and 4.875 percent for taxable years beginning on or
after January first, two thousand eighteen.

(viii) (A) In computing the business income base, taxpayers shall be
allowed both a prior net operating loss conversion subtraction under
this subparagraph and a net operating loss deduction under subparagraph
(ix) of this paragraph. The prior net operating loss conversion
subtraction computed under this subparagraph shall be applied against
the business income base before the net operating loss deduction
computed under subparagraph (ix) of this paragraph.

(B) Prior net operating loss conversion subtraction.

(1) Definitions.

(I) "Base year" means the last taxable year beginning on or after
January first, two thousand fourteen and before January first, two
thousand fifteen.

(II) "Unabsorbed net operating loss" means the unabsorbed portion of
net operating loss as calculated under paragraph (f) of subdivision nine
of section two hundred eight of this article or subsection (k-1) of
section fourteen hundred fifty-three of this chapter as such sections
were in effect on December thirty-first, two thousand fourteen, that was
not deductible in previous taxable years and was eligible for carryover
on the last day of the base year subject to the limitations for
deduction under such sections, including any net operating loss
sustained by the taxpayer during the base year.

(III) "Base year BAP" means the taxpayer's business allocation
percentage as calculated under paragraph (a) of subdivision three of
this section for the base year, or the taxpayer's allocation percentage
as calculated under section fourteen hundred fifty-four of this chapter
for purposes of calculating entire net income for the base year, as such
sections were in effect on December thirty-first, two thousand fourteen.

(IV) "Base year tax rate" means the taxpayer's tax rate for the base
year as calculated under this paragraph or subsection (a) of section
fourteen hundred fifty-five of this chapter, as such provisions were in
effect on December thirty-first, two thousand fourteen.

(2) The prior net operating loss conversion subtraction shall be
calculated as follows:

(I) The taxpayer shall first calculate the tax value of its unabsorbed
net operating loss for the base year. The value is equal to the product
of (I) the amount of the taxpayer's unabsorbed net operating loss, (II)
the taxpayer's base year BAP, and (III) the taxpayer's base year tax
rate.

(II) The product determined under item (I) of this subclause is then
divided by six and one-half percent, or in the case of a qualified New
York manufacturer, five and seven-tenths percent. This result shall
equal the taxpayer's prior net operating loss conversion subtraction
pool.

(III) The taxpayer's prior net operating loss conversion subtraction
for the taxable year shall equal one-tenth of its net operating loss
conversion subtraction pool plus any amount of unused prior net
operating loss conversion subtraction from preceding taxable years.
Provided, however, the prior net operating loss conversion subtraction
of a small business corporation, as defined in paragraph (f) of this
subdivision, as of the last day of the base year, shall not be subject
to the one-tenth limitation in the previous sentence.

(IV) In lieu of the subtraction described in item (III) of this
subclause, if the taxpayer so elects, the taxpayer's prior net operating
loss conversion subtraction for the tax years beginning on or after
January first, two thousand fifteen and before January first, two
thousand seventeen shall equal in each year, not more than one-half of
its net operating loss conversion subtraction pool until the pool is
exhausted. If the pool is not exhausted at the end of such time period,
the remainder of the pool shall be forfeited. The taxpayer shall make
such revocable election on its first return for the tax year beginning
on or after January first, two thousand fifteen and before January
first, two thousand sixteen by the due date for such return (determined
with regard to extensions).

(3) Combined groups. (I) Where a taxpayer was properly included or
required to be included in a combined report for the base year pursuant
to section two hundred eleven of this article or a combined return under
section fourteen hundred sixty-two of this chapter, as such sections
were in effect on December thirty-first, two thousand fourteen, and the
members of the combined group for the base year are the same as the
members of the combined group for the taxable year immediately
succeeding the base year, the combined group shall calculate its prior
net operating loss conversion subtraction pool using the combined
group's total unabsorbed net operating loss, base year BAP, and base
year tax rate.

(II) If a combined group includes additional members in the taxable
year immediately succeeding the base year that were not included in the
combined group during the base year, each base year combined group and
each taxpayer that filed separately in the base year but is included in
the combined group in the taxable year succeeding the base year shall
calculate its prior net operating loss conversion subtraction pool, and
the sum of the pools shall be the combined prior net operating loss
conversion subtraction pool of the combined group.

(III) If a taxpayer was properly included in a combined report for the
base year and files a separate report in a subsequent taxable year, then
the amount of remaining prior net operating loss conversion subtraction
allowed to the taxpayer filing such separate report shall be
proportionate to the amount that such taxpayer contributed to the prior
net operating loss conversion subtraction pool on a combined basis, and
the remaining prior net operating loss conversion subtraction allowed to
the remaining members of the combined group shall be reduced
accordingly.

(IV) If a taxpayer filed a separate report for the base year and is
properly included in a combined report in a subsequent taxable year,
then the prior net operating loss conversion subtraction pool of the
combined group shall be increased by the amount of the remaining net
operating loss conversion subtraction allowed to the taxpayer at the
time the taxpayer is properly included in the combined group.

(4) The prior net operating loss conversion subtraction may be used to
reduce the taxpayer's tax on the apportioned business income base to the
higher of the tax on the capital base under paragraph (b) of this
subdivision or the fixed dollar minimum under paragraph (d) of this
subdivision. Unless the taxpayer has made the election provided for in
item (IV) of subclause two of this clause, any amount of unused
subtraction shall be carried forward to subsequent tax year or years
until the prior net operating loss conversion subtraction pool is
exhausted, but for no longer than twenty taxable years, or the taxable
year beginning on or after January first, two thousand thirty-five but
before January first, two thousand thirty-six, whichever comes first.
Such amount carried forward shall not be subject to the one-tenth
limitation for the subsequent tax year or years. However, if the
taxpayer elects to compute its prior net operating loss conversion
subtraction pursuant to item (IV) of subclause two of this clause, the
taxpayer shall not carry forward any unused amount of such subtraction
to any tax year beginning on or after January first, two thousand
seventeen.

(ix) Net operating loss deduction. In computing the business income
base, a net operating loss deduction shall be allowed. A net operating
loss deduction is the amount of net operating loss or losses from one or
more taxable years that are carried forward or carried back to a
particular taxable year. A net operating loss is the amount of a
business loss incurred in a particular tax year multiplied by the
apportionment factor for that year as determined under section two
hundred ten-A of this article. The maximum net operating loss deduction
that is allowed in a taxable year is the amount that reduces the
taxpayer's tax on the apportioned business income base to the higher of
the tax on the capital base or the fixed dollar minimum. Such deduction
and loss are determined in accordance with the following:

(1) Such net operating loss deduction is not limited to the amount
allowed under section one hundred seventy-two of the internal revenue
code or the amount that would have been allowed if the taxpayer had not
made an election under subchapter S of chapter one of the internal
revenue code.

(2) Such net operating loss deduction shall not include any net
operating loss incurred during any taxable year beginning prior to
January first, two thousand fifteen, or during any taxable year in which
the taxpayer was not subject to the tax imposed by this article.

(3) A taxpayer that files as part of a federal consolidated return but
on a separate basis for purposes of this article must compute its
deduction and loss as if it were filing on a separate basis for federal
income tax purposes.

(4) A net operating loss may be carried back three taxable years
preceding the taxable year of the loss ("the loss year"). However no
loss can be carried back to a taxable year beginning before January
first, two thousand fifteen. The loss is first carried to the earliest
of the three taxable years. If it is not entirely used in that year, it
is carried to the second taxable year preceding the loss year, and any
remaining amount is carried to the taxable year immediately preceding
the loss year. Any unused amount of loss then remaining may be carried
forward for as many as twenty taxable years following the loss year.
Losses carried forward are carried forward first to the taxable year
immediately following the loss year, then to the second taxable year
following the loss year, and then to the next immediately subsequent
taxable year or years until the loss is used up or the twentieth taxable
year following the loss year, whichever comes first.

(5) Such net operating loss deduction shall not include any net
operating loss incurred during a New York S year; provided, however, a
New York S year must be treated as a taxable year for purposes of
determining the number of taxable years to which a net operating loss
may be carried forward.

(6) Where there are two or more apportioned net operating losses, or
portions thereof, carried back or carried forward to be deducted in one
particular tax year from apportioned business income, the earliest
apportioned loss incurred must be applied first.

(7) A taxpayer may elect to waive the entire carryback period with
respect to a net operating loss. Such election must be made on the
taxpayer's original timely filed return (determined with regard to
extensions) for the taxable year of the net operating loss for which the
election is to be in effect. Once an election is made for a taxable
year, it shall be irrevocable for that taxable year. A separate election
must be made for each loss year. This election applies to all members of
a combined group.

(b) Capital base. (1) (i) The amount prescribed by this paragraph
shall be computed at .15 percent for each dollar of the taxpayer's total
business capital, or the portion thereof apportioned within the state as
hereinafter provided for taxable years beginning before January first,
two thousand sixteen. However, in the case of a cooperative housing
corporation as defined in the internal revenue code, the applicable rate
shall be .04 percent until taxable years beginning on or after January
first, two thousand twenty and zero percent for taxable years beginning
on or after January first, two thousand twenty-one. The rate of tax for
subsequent tax years shall be as follows: .125 percent for taxable years
beginning on or after January first, two thousand sixteen and before
January first, two thousand seventeen; .100 percent for taxable years
beginning on or after January first, two thousand seventeen and before
January first, two thousand eighteen; .075 percent for taxable years
beginning on or after January first, two thousand eighteen and before
January first, two thousand nineteen; .050 percent for taxable years
beginning on or after January first, two thousand nineteen and before
January first, two thousand twenty; .025 percent for taxable years
beginning on or after January first, two thousand twenty and before
January first, two thousand twenty-one; and .1875 percent for years
beginning on or after January first, two thousand twenty-one and before
January first, two thousand twenty-four, and zero percent for taxable
years beginning on or after January first, two thousand twenty-four.
Provided however, for taxable years beginning on or after January first,
two thousand twenty-one, the rate of tax for a small business as defined
in paragraph (f) of this subdivision shall be zero percent. The rate of
tax for a qualified New York manufacturer shall be .132 percent for
taxable years beginning on or after January first, two thousand fifteen
and before January first, two thousand sixteen, .106 percent for taxable
years beginning on or after January first, two thousand sixteen and
before January first, two thousand seventeen, .085 percent for taxable
years beginning on or after January first, two thousand seventeen and
before January first, two thousand eighteen; .056 percent for taxable
years beginning on or after January first, two thousand eighteen and
before January first, two thousand nineteen; .038 percent for taxable
years beginning on or after January first, two thousand nineteen and
before January first, two thousand twenty; .019 percent for taxable
years beginning on or after January first, two thousand twenty and
before January first, two thousand twenty-one; and zero percent for
years beginning on or after January first, two thousand twenty-one. (ii)
In no event shall the amount prescribed by this paragraph exceed three
hundred fifty thousand dollars for qualified New York manufacturers and
for all other taxpayers five million dollars.

(2) For purposes of subparagraph one of this paragraph, the term
"manufacturer" shall mean a taxpayer that during the taxable year is
principally engaged in the production of goods by manufacturing,
processing, assembling, refining, mining, extracting, farming,
agriculture, horticulture, floriculture, viticulture or commercial
fishing. Moreover, for purposes of computing the capital base in a
combined report, the combined group shall be considered a "manufacturer"
for purposes of this subparagraph only if the combined group during the
taxable year is principally engaged in the activities set forth in this
subparagraph, or any combination thereof. A taxpayer or, in the case of
a combined report, a combined group shall be "principally engaged" in
activities described above if, during the taxable year, more than fifty
percent of the gross receipts of the taxpayer or combined group,
respectively, are derived from receipts from the sale of goods produced
by such activities. In computing a combined group's gross receipts,
intercorporate receipts shall be eliminated. A "qualified New York
manufacturer" is a manufacturer that has property in New York that is
described in clause (A) of subparagraph (i) of paragraph (b) of
subdivision one of section two hundred ten-B of this article and either
(i) the adjusted basis of that property for New York state tax purposes
at the close of the taxable year is at least one million dollars or (ii)
all of its real and personal property is located in New York. In
addition, a "qualified New York manufacturer" means a taxpayer that is
defined as a qualified emerging technology company under paragraph (c)
of subdivision one of section thirty-one hundred two-e of the public
authorities law regardless of the ten million dollar limitation
expressed in subparagraph one of such paragraph. A taxpayer or, in the
case of a combined report, a combined group, that does not satisfy the
principally engaged test may be a qualified New York manufacturer if the
taxpayer or the combined group employs during the taxable year at least
two thousand five hundred employees in manufacturing in New York and the
taxpayer or the combined group has property in the state used in
manufacturing, the adjusted basis of which for New York state tax
purposes at the close of the taxable year is at least one hundred
million dollars.

(d) Fixed dollar minimum. (1) (A) The amount prescribed by this
paragraph for New York S corporations, other than New York S
corporations that are qualified New York manufacturers or qualified
emerging technology companies, will be determined in accordance with the
following table:
If New York receipts are: The fixed dollar minimum tax is:
not more than $100,000 $ 25
more than $100,000 but not over $250,000 $ 50
more than $250,000 but not over $500,000 $ 175
more than $500,000 but not over $1,000,000 $ 300
more than $1,000,000 but not over $5,000,000 $1,000
more than $5,000,000 but not over $25,000,000 $3,000
Over $25,000,000 $4,500

(B) Provided further, the amount prescribed by this paragraph for New
York S corporations that are qualified New York manufacturers, as
defined in subparagraph (vi) of paragraph (a) of this subdivision, and
for New York S corporations that are qualified emerging technology
companies under paragraph (c) of subdivision one of section thirty-one
hundred two-e of the public authorities law regardless of the ten
million dollar limitation expressed in subparagraph one of such
paragraph (c), will be determined in accordance with the following
tables.
For taxable years beginning on or after January 1, 2015 and before
January 1, 2016:
If New York receipts are: The fixed dollar minimum tax is:
not more than $100,000 $ 22
more than $100,000 but not over $250,000 $ 44
more than $250,000 but not over $500,000 $ 153
more than $500,000 but not over $1,000,000 $ 263
more than $1,000,000 but not over $5,000,000 $ 877
more than $5,000,000 but not over $25,000,000 $2,631
Over $25,000,000 $3,947
For taxable years beginning on or after January 1, 2016 and before
January 1, 2018:
If New York receipts are: The fixed dollar minimum tax is:
not more than $100,000 $ 21
more than $100,000 but not over $250,000 $ 42
more than $250,000 but not over $500,000 $ 148
more than $500,000 but not over $1,000,000 $ 254
more than $1,000,000 but not over $5,000,000 $ 846
more than $5,000,000 but not over $25,000,000 $2,538
Over $25,000,000 $3,807
For taxable years beginning on or after January 1, 2018:
If New York receipts are: The fixed dollar minimum tax is:
not more than $100,000 $ 19
more than $100,000 but not over $250,000 $ 38
more than $250,000 but not over $500,000 $ 131
more than $500,000 but not over $1,000,000 $ 225
more than $1,000,000 but not over $5,000,000 $ 750
more than $5,000,000 but not over $25,000,000 $2,250
Over $25,000,000 $3,375

(C) Provided further, the amount prescribed by this paragraph for a
qualified New York manufacturer, as defined in subparagraph (vi) of
paragraph (a) of this subdivision, and a qualified emerging technology
company under paragraph (c) of subdivision one of section thirty-one
hundred two-e of the public authorities law regardless of the ten
million dollar limitation expressed in subparagraph one of such
paragraph (c), that is not a New York S corporation, will be determined
in accordance with the following tables. However, with respect to
qualified New York manufacturers, the amounts in these tables will apply
in the case of a combined report only if the combined group satisfies
the requirements to be a qualified New York manufacturer as set forth in
such subparagraph (vi).
For tax years beginning on or after January 1, 2015 and before January
1, 2016:
If New York receipts are: The fixed dollar minimum tax is:
not more than $100,000 $ 22
more than $100,000 but not over $250,000 $ 66
more than $250,000 but not over $500,000 $ 153
more than $500,000 but not over $1,000,000 $ 439
more than $1,000,000 but not over $5,000,000 $1,316
more than $5,000,000 but not over $25,000,000 $3,070
Over $25,000,000 $4,385
For tax years beginning on or after January 1, 2016 and before January
1, 2018:
If New York receipts are: The fixed dollar minimum tax is:
not more than $100,000 $ 21
more than $100,000 but not over $250,000 $ 63
more than $250,000 but not over $500,000 $ 148
more than $500,000 but not over $1,000,000 $ 423
more than $1,000,000 but not over $5,000,000 $1,269
more than $5,000,000 but not over $25,000,000 $2,961
Over $25,000,000 $4,230
For tax years beginning on or after January 1, 2018:
If New York receipts are: The fixed dollar minimum tax is:
not more than $100,000 $ 19
more than $100,000 but not over $250,000 $ 56
more than $250,000 but not over $500,000 $ 131
more than $500,000 but not over $1,000,000 $ 375
more than $1,000,000 but not over $5,000,000 $1,125
more than $5,000,000 but not over $25,000,000 $2,625
Over $25,000,000 $3,750

(D) Otherwise, for all other taxpayers not covered by clauses (A),
(B), (C) and (D-1) of this subparagraph, the amount prescribed by this
paragraph will be determined in accordance with the following table:
If New York receipts are: The fixed dollar minimum tax is:
not more than $100,000 $ 25
more than $100,000 but not over $250,000 $ 75
more than $250,000 but not over $500,000 $ 175
more than $500,000 but not over $1,000,000 $ 500
more than $1,000,000 but not over $5,000,000 $1,500
more than $5,000,000 but not over $25,000,000 $3,500
more than $25,000,000 but not over $50,000,000 $5,000
more than $50,000,000 but not over $100,000,000 $10,000
more than $100,000,000 but not over $250,000,000 $20,000
more than $250,000,000 but not over $500,000,000 $50,000
more than $500,000,000 but not over $1,000,000,000 $100,000
Over $1,000,000,000 $200,000

(D-1) In the case of a REIT or a RIC that is not a captive REIT or
captive RIC, the amount prescribed by this paragraph will be determined
in accordance with the following table:
If New York receipts are: The fixed dollar minimum tax is:
not more than $100,000 $ 25
more than $100,000 but not over $250,000 $ 75
more than $250,000 but not over $500,000 $ 175
more than $500,000 $ 500

(E) For purposes of this paragraph, New York receipts are the receipts
included in the numerator of the apportionment factor determined under
section two hundred ten-A for the taxable year.

(2) If the taxable year is less than twelve months, the amount of New
York receipts is determined by dividing the amount of the receipts for
the taxable year by the number of months in the taxable year and
multiplying the result by twelve, and the amount prescribed by this
paragraph shall be reduced by twenty-five percent of the period for
which the taxpayer is subject to tax is more than six months but not
more than nine months and by fifty percent if the period for which the
taxpayer is subject to tax is not more than six months. In the case of a
termination year of a New York S corporation, the sum of the tax
computed under this paragraph for the S short year and for the C short
year shall not be less than the amount computed under this paragraph as
if the corporation were a New York C corporation for the entire taxable
year.

(f) For purposes of this section, the term "small business taxpayer"
shall mean a taxpayer (i) which has an entire net income of not more
than three hundred ninety thousand dollars for the taxable year; (ii)
the aggregate amount of money and other property received by the
corporation for stock, as a contribution to capital, and as paid-in
surplus, does not exceed one million dollars; (iii) which is not part of
an affiliated group, as defined in section 1504 of the internal revenue
code, unless such group, if it had filed a report under this article on
a combined basis, would have itself qualified as a "small business
taxpayer" pursuant to this subdivision; and (iv) which has an average
number of individuals, excluding general executive officers, employed
full-time in the state during the taxable year of one hundred or fewer.
If the taxable period to which subparagraph (i) of this paragraph
applies is less than twelve months, entire net income under such
subparagraph shall be placed on an annual basis by multiplying the
entire net income by twelve and dividing the result by the number of
months in the period. For purposes of subparagraph (ii) of this
paragraph, the amount taken into account with respect to any property
other than money shall be the amount equal to the adjusted basis to the
corporation of such property for determining gain, reduced by any
liability to which the property was subject or which was assumed by the
corporation. The determination under the preceding sentence shall be
made as of the time the property was received by the corporation. For
purposes of subparagraph (iv) of this paragraph, "average number of
individuals, excluding general executive officers, 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 applicable period, by adding
together the number of such individuals ascertained on each of such
dates and dividing the sum so obtained by the number of such dates
occurring within such taxable year or other applicable period. An
individual employed full-time means an employee in a job consisting of
at least thirty-five hours per week, or two or more employees who are in
jobs that together constitute the equivalent of a job at least
thirty-five hours per week (full-time equivalent). Full-time equivalent
employees in the state include all employees regularly connected with or
working out of an office or place of business of the taxpayer within the
state.

1-c. The computations specified in paragraph (b) of subdivision one of
this section shall not apply to the first two taxable years of a
taxpayer which, for one or both such years, is a small business taxpayer
as defined in paragraph (f) of subdivision one of this section.

2. The amount of investment capital and business capital shall each be
determined by taking the average value of the assets included therein
(less liabilities deductible therefrom pursuant to the provisions of
subdivisions five and seven of section two hundred eight), and, if the
period covered by the report is other than a period of twelve calendar
months, by multiplying such value by the number of calendar months or
major parts thereof included in such period, and dividing the product
thus obtained by twelve. For purposes of this subdivision, real property
and marketable securities shall be valued at fair market value and the
value of personal property other than marketable securities shall be the
value thereof shown on the books and records of the taxpayer in
accordance with generally accepted accounting principles.

3. A corporation that is a partner in a partnership shall compute tax
under this article using the aggregate method as defined in the
regulations of the commissioner, unless another method for computing
such tax is required or allowed by such regulations. Under the aggregate
method, a corporation that is a partner in a partnership is viewed as
having an undivided interest in the partnership's assets, liabilities,
and items of receipts, income, gain, loss and deduction. Under the
aggregate method, the corporation that is a partner in a partnership is
treated as participating in the partnership's transactions and
activities.