Section 1454. 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 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
  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
  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 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
  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
  average  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
  attributable 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
  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 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
  article 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
  business  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
  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 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 of
  taxation and finance.
    (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
  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.
    (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
  similar  or  different  method  calculated  to  effect a fair and proper
  allocation 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
  deposits   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
  thousand 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
  determined under paragraph three of subsection (a) of this section.
    (B) For taxable  years  beginning  on  or  after  January  first,  two
  thousand  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
  thousand 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
  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) below:
    (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
  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 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
  facilities) the taxpayer shall make the modifications described in  such
  paragraph  for  purposes of its alternative entire net income allocation
  percentage.
    (3) For taxable  years  beginning  on  or  after  January  first,  two
  thousand  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
  pursuant to paragraph two of subsection (b) of this section (relating to
  an   international   banking  facility)  the  taxpayer  shall  make  the
  modifications  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  (relating  to  an  international  banking  facility)  the
  taxpayer  shall  make  the  modifications  described  in  clause (ii) of
  subparagraph (A) of such paragraph.
    (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
  allocation 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.