Section 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
  insurance 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.
    * NB Effective until January 1, 2011
    * (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;  except  that,  for
  purposes of this paragraph, the amount of such subsidiary capital, prior
  to   allocation,  shall  be  reduced  by  one  hundred  percent  of  the
  investments in the stock of, and any indebtedness from, subsidiaries the
  income, gains or losses from which are  not  excluded  from  entire  net
  income  pursuant to subparagraph (A) of paragraph one of subdivision (b)
  of section fifteen hundred three of this article, but only to the extent
  such investments or indebtedness are directly or indirectly attributable
  to income, gains or losses that are not so excluded.
    * NB Effective January 1, 2011
    (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.