Section 11-642. Allocation

(a)  In  general. If a taxpayer's entire net
  income, alternative entire net income, or  taxable  assets  are  derived
  from business carried on within and without the city, 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 city, except wages,
  salaries and other personal service compensation  of  general  executive
  officers,  bears to the total wages, salaries and other personal service
  compensation during the taxable year of  all  the  taxpayer's  employees
  within  and  without the city, 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  city, and all other business
  receipts earned within the city, 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 city.
    (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 subdivision (a) of section 11-640 of this part, a
  loan or financing lease attributed by such taxpayer to a branch  without
  the  city  shall  be presumed to be properly so attributed provided that
  such  presumption  may  be  rebutted  if  the  commissioner  of  finance
  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 the city if the  taxpayer  had  a  branch
  within  the  city  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 city. In the case of a loan or  financing
  lease  which  is recorded on the books of a place without the city 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 the city if the taxpayer had a branch within the city 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 city.
    (ii) In the case of a taxpayer described in paragraph six or  nine  of
  subdivision  (a)  of  section  11-640  of this part, a loan or financing
  lease attributed by such taxpayer to a bona fide office without the city
  shall be presumed to  be  properly  so  attributed  provided  that  such
  presumption  may be rebutted if the commissioner of finance demonstrates
  that the greater portion of income producing  activity  related  to  the
  loan or financing lease did not occur without the city.
    (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 city if the mailing address of the card holder in the records
  of the taxpayer is in the city; and
    (ii)  Service  charges  and fees from such cards are earned within the
  city if the card is serviced in the city; and
    (iii) Receipts from merchant discounts are earned within the  city  if
  the merchant is located within the city.
    (E)  The  portion  of  total  net  gains and other income from trading
  activities (including but not limited to foreign exchange,  options  and
  financial  futures),  and from investment activities which is attributed
  within the city shall be ascertained by multiplying such total net gains
  and other income by a fraction the numerator of  which  is  the  average
  value  of  the  trading assets and investment assets attributable to the
  city and the denominator of which is the average value  of  all  trading
  and   investment   assets.  A  trading  asset  or  investment  asset  is
  attributable to the city if the  greater  portion  of  income  producing
  activity  related  to  the  trading  asset  or investment asset occurred
  within the city.
    (F) Fees or charges from the issuance of letters of credit,  travelers
  checks  and  money  orders are earned within the city if such letters of
  credit, travelers checks or money orders are issued within the city.
    (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
  city (such portion referred to herein as the New York city portion).
    (2) The New York city portion shall be the product of (i) the total of
  such  receipts  from  the sale of such services and (ii) a fraction. The
  numerator of that fraction is the sum of  the  monthly  percentages  (as
  defined  hereinafter)  determined  for  each  month  of  the  investment
  company's taxable 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 percentage 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 that are domiciled in the city  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
  chapter  seventeen of this title; an estate or trust is domiciled in the
  city if it is a city resident estate or trust as  defined  in  paragraph
  three  of  subdivision  (b)  of section 11-1705 of this code; a business
  entity is domiciled in the city if the location of the  actual  seat  of
  management  or  control  is  in  the city. 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"
  means 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 that 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  that  is  asserted  to

  constitute  an  investment  company that 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
  investment  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,
  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  hereinabove,  to  such
  investment company.
    (H)  All receipts from the performance of services not described above
  are earned within the city if the services are performed  in  the  city.
  When  a  service  is  performed  both  within  and without the city, the
  receipts shall be allocated within and without the  city  in  accordance
  with rules and regulations of the commissioner of finance.
    (I)  All other receipts not described in subparagraphs (B) through (H)
  of this paragraph shall be attributable within and without the  city  in
  accordance  with  rules  and  regulations  issued by the commissioner of
  finance.
    (3) The taxpayer shall ascertain  the  percentage  which  the  average
  value  of  deposits  maintained  at  branches within the city during the
  taxable year, bears to the average value of all the taxpayer's  deposits
  maintained  at  branches  within and without the city 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
  accounting 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
  (regardless 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.  (i) Notwithstanding  subdivision
  (c) of this section, but subject to subdivision (g) of this section, the
  business allocation percentage shall be computed in the manner set forth
  in this subdivision.
    (1)  For  taxable  years  beginning in two thousand nine, the business
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (A)  the product of thirty percent and the percentage determined under
  paragraph one of subdivision (c) of this section,
    (B) the product of thirty percent and the percentage determined  under
  paragraph two of subdivision (c) of this section, and
    (C)  the  product of forty percent and the percentage determined under
  paragraph three of subdivision (c) of this section.
    (2) For taxable years beginning in  two  thousand  ten,  the  business
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (A) the product of twenty-seven percent and the percentage  determined
  under paragraph one of subdivision (c) of this section,
    (B)  the product of twenty-seven percent and the percentage determined
  under paragraph two of subdivision (c) of this section, and
    (C) the product of forty-six percent  and  the  percentage  determined
  under paragraph three of subdivision (c) of this section.
    (3)  For  taxable years beginning in two thousand eleven, the business
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (A)   the  product  of  twenty-three  and  one-half  percent  and  the
  percentage determined under paragraph one of  subdivision  (c)  of  this
  section,
    (B)   the  product  of  twenty-three  and  one-half  percent  and  the
  percentage determined under paragraph two of  subdivision  (c)  of  this
  section, and
    (C)  the  product of fifty-three percent and the percentage determined
  under paragraph three of subdivision (c) of this section.
    (4) For taxable years beginning in two thousand twelve,  the  business
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (A) the product of twenty percent and the percentage determined  under
  paragraph one of subdivision (c) of this section,
    (B)  the product of twenty percent and the percentage determined under
  paragraph two of subdivision (c) of this section, and
    (C) the product of sixty percent and the percentage  determined  under
  paragraph three of subdivision (c) of this section.
    (5) For taxable years beginning in two thousand thirteen, the business
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (A) the product of sixteen and one-half  percent  and  the  percentage
  determined under paragraph one of subdivision (c) of this section,
    (B)  the  product  of  sixteen and one-half percent and the percentage
  determined under paragraph two of subdivision (c) of this section, and
    (C) the product of sixty-seven percent and the  percentage  determined
  under paragraph three of subdivision (c) of this section.

    (6) For taxable years beginning in two thousand fourteen, the business
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (A)  the  product  of thirteen and one-half percent and the percentage
  determined under paragraph one of subdivision (c) of this section,
    (B) the product of thirteen and one-half percent  and  the  percentage
  determined under paragraph two of subdivision (c) of this section, and
    (C) the product of seventy-three percent and the percentage determined
  under paragraph three of subdivision (c) of this section.
    (7)  For taxable years beginning in two thousand fifteen, the business
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (A)  the  product  of  ten percent and the percentage determined under
  paragraph one of subdivision (c) of this section,
    (B) the product of ten percent and  the  percentage  determined  under
  paragraph two of subdivision (c) of this section, and
    (C)  the product of eighty percent and the percentage determined under
  paragraph three of subdivision (c) of this section.
    (8) For taxable years beginning in two thousand sixteen, the  business
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (A) the product  of  six  and  one-half  percent  and  the  percentage
  determined under paragraph one of subdivision (c) of this section,
    (B)  the  product  of  six  and  one-half  percent  and the percentage
  determined under paragraph two of subdivision (c) of this section, and
    (C) the product of eighty-seven percent and the percentage  determined
  under paragraph three of subdivision (c) of this section.
    (9)  For  taxable  years  beginning  in  two  thousand  seventeen, the
  business allocation percentage shall be determined  by  adding  together
  the following percentages:
    (A)  the  product  of  three  and  one-half percent and the percentage
  determined under paragraph one of subdivision (c) of this section,
    (B) the product of three  and  one-half  percent  and  the  percentage
  determined under paragraph two of subdivision (c) of this section, and
    (C)  the product of ninety-three percent and the percentage determined
  under paragraph three of subdivision (c) of this section.
    (10) For taxable years beginning after  two  thousand  seventeen,  the
  business  allocation percentage shall be the percentage determined under
  paragraph three of subdivision (c) of this section.
    (11) The commissioner shall promulgate rules  necessary  to  implement
  the provisions of this subdivision under such circumstances where any of
  the  percentages  to  be determined under paragraph one, two or three of
  subdivision (c)  of  this  section  cannot  be  determined  because  the
  taxpayer  has  no  property,  payroll  or  gross  receipts from sales or
  services within or without the city.
    (6) If it shall  appear  to  the  commissioner  of  finance  that  the
  allocation percentage determined in subdivision (b), (c), or (d) of this
  section  does  not  properly  reflect  the activity, business, income or
  assets of a taxpayer within the city, the commissioner of finance  shall
  be  authorized  in  his  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 similar or different method calculated to  effect  a  fair
  and proper allocation of the income or assets reasonably attributable to
  the city.
    (7)  The  commissioner  of finance 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 subdivision.

    (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
  city,  the  portion  thereof  which  is derived from business carried on
  within the city 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
  subdivision  (a) of this section, plus an additional percentage equal to
  the  receipts  percentage  ascertained  under  paragraph  two  of   such
  subdivision   and   an  additional  percentage  equal  to  the  deposits
  percentage ascertained under paragraph three of  such  subdivision,  and
  divide the result by the number of percentages so added together.
    (1-a)   Notwithstanding  the  provisions  of  paragraph  one  of  this
  subdivision, each banking corporation described  in  paragraph  nine  of
  subdivision  (a)  of  section  11-640  of  this  part subject to the tax
  imposed  by  this   part   that   substantially   provides   management,
  administrative  or  distribution  services  to an investment company, as
  such  terms  are  defined  in  subparagraph  (G)  of  paragraph  two  of
  subdivision  (a)  of  this  section,  shall determine the portion of its
  entire net income derived from business carried on within  the  city  by
  multiplying  such  income by an income allocation percentage obtained as
  follows:
    (A) For taxable years beginning  in  two  thousand  nine,  the  income
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (i) the product of eighteen  percent  and  the  percentage  determined
  under paragraph one of subdivision (a) of this section,
    (ii)  the  product  of forty-six percent and the percentage determined
  under paragraph two of subdivision (a) of this section, and
    (iii) the product of thirty-six percent and the percentage  determined
  under paragraph three of subdivision (a) of this section.
    (B)  For  taxable  years  beginning  in  two  thousand ten, the income
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (i) the product of sixteen percent and the percentage determined under
  paragraph one of subdivision (a) of this section,
    (ii)  the  product  of fifty-two percent and the percentage determined
  under paragraph two of subdivision (a) of this section, and
    (iii) the product of thirty-two percent and the percentage  determined
  under paragraph three of subdivision (a) of this section.
    (C)  For  taxable  years  beginning in two thousand eleven, the income
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (i)  the  product  of  fourteen  percent and the percentage determined
  under paragraph one of subdivision (a) of this section,
    (ii) the product of fifty-eight percent and the percentage  determined
  under paragraph two of subdivision (a) of this section, and
    (iii)   the   product  of  twenty-eight  percent  and  the  percentage
  determined under paragraph three of subdivision (a) of this section.
    (D) For taxable years beginning in two  thousand  twelve,  the  income
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (i) the product of twelve percent and the percentage determined  under
  paragraph one of subdivision (a) of this section,
    (ii)  the  product of sixty-four percent and the percentage determined
  under paragraph two of subdivision (a) of this section, and
    (iii) the product of twenty-four percent and the percentage determined
  under paragraph three of subdivision (a) of this section.

    (E) For taxable years beginning in two thousand thirteen,  the  income
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (i)  the  product  of  ten percent and the percentage determined under
  paragraph one of subdivision (a) of this section,
    (ii) the product of seventy  percent  and  the  percentage  determined
  under paragraph two of subdivision (a) of this section, and
    (iii)  the  product  of  twenty  percent and the percentage determined
  under paragraph three of subdivision (a) of this section.
    (F) For taxable years beginning in two thousand fourteen,  the  income
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (i) the product of eight percent and the percentage  determined  under
  subparagraph one of subdivision (a) of this section,
    (ii)  the product of seventy-six percent and the percentage determined
  under paragraph two of subdivision (a) of this section, and
    (iii) the product of sixteen percent  and  the  percentage  determined
  under paragraph three of subdivision (a) of this section.
    (G)  For  taxable  years beginning in two thousand fifteen, the income
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (i)  the  product  of  six percent and the percentage determined under
  paragraph one of subdivision (a) of this section,
    (ii) the product of eighty-two percent and the  percentage  determined
  under paragraph two of subdivision (a) of this section, and
    (iii)  the  product  of  twelve  percent and the percentage determined
  under paragraph three of subdivision (a) of this section.
    (H) For taxable years beginning in two thousand  sixteen,  the  income
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (i) the product of four percent and the  percentage  determined  under
  paragraph one of subdivision (a) of this section,
    (ii) the product of eighty-eight percent and the percentage determined
  under paragraph two of subdivision (a) of this section, and
    (iii) the product of eight percent and the percentage determined under
  paragraph three of subdivision (a) of this section.
    (I)  For taxable years beginning in two thousand seventeen, the income
  allocation  percentage  shall  be  determined  by  adding  together  the
  following percentages:
    (i)  the  product  of  two percent and the percentage determined under
  paragraph one of subdivision (a) of this section,
    (ii) the product of ninety-four percent and the percentage  determined
  under paragraph two of subdivision (a) of this section, and
    (iii)  the product of four percent and the percentage determined under
  paragraph three of subdivision (a) of this section.
    (J) For taxable years beginning  after  two  thousand  seventeen,  the
  income  allocation  percentage  shall be the percentage determined under
  paragraph two of subdivision (a) of this section.
    (K) The commissioner shall promulgate rules necessary to implement the
  provisions of this paragraph under such circumstances where any  of  the
  percentages  to  be  determined  under  paragraph  one,  two or three of
  subdivision (a)  of  this  section  cannot  be  determined  because  the
  taxpayer has no compensation, receipts or deposits within or without the
  city.
    (2) (A) In lieu of the modification provided for in subdivision (f) of
  section  11-641  of  this  part,  (relating  to  a  modification for the
  adjusted eligible net income of an international  banking  facility),  a
  taxpayer  may,  in the manner prescribed by the commissioner of finance,

  elect to modify on an annual basis its income allocation  percentage  in
  the manner described in clauses (i), (ii) and (iii) below:
    (i)  wages,  salaries and other personal service compensation properly
  attributable  to  the  production  of  eligible  gross  income  of   the
  taxpayer's  international  banking facility shall not be included in the
  computation of wages, salaries and other personal  service  compensation
  of employees within the city,
    (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 city, 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 city.
    (B)  For  purposes of this paragraph, the term "eligible gross income"
  refers to such term as set out in subdivision (f) of section  11-641  of
  this  part except that the term "foreign person" as defined in paragraph
  eight of such subdivision (f) shall not include a foreign branch of  the
  taxpayer  and  in  no  event  shall  transactions 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 city, the portion thereof which is  derived  from
  business  carried  on within the city 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
  subdivision (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
  subdivision, and divide the result by the number of percentages so added
  together.
    (2)  When  an  election  has  been  made  pursuant to paragraph two of
  subdivision (b) of  this  section  (relating  to  international  banking
  facilities)  the taxpayer shall make the modifications described in such
  paragraph for purposes of its alternative entire net  income  allocation
  percentage.
    (d) Allocation of taxable assets. If the taxpayer's taxable assets are
  derived  from  business carried on both within and without the city, the
  portion thereof which is derived from business  carried  on  within  the
  city  shall  be determined by multiplying its taxable assets by an asset
  allocation percentage determined  in  the  same  manner  as  the  income
  allocation   percentage   under  subdivision  (b)  of  this  section  is
  determined when the election provided  for  in  paragraph  two  of  such
  subdivision  has  been  made, except that the modifications described in
  clauses (i), (ii) and (iii) of subparagraph (A) of such paragraph  shall
  not be made.
 
    * NB Amended Ch. 298/85 § 42, language juxtaposed per Ch. 907/85 § 14