N.Y. General City Model 772/66 § 2: Definitions

§ 2. Definitions. When used in this part:

1. "Corporation" includes a joint-stock company or association and any

business conducted by a trustee or trustees wherein interest or

ownership is evidenced by certificate or other written instrument;

2. "Subsidiary" means a corporation of which over fifty per centum of

the number of shares of stock entitling the holders thereof to vote for

the election of directors or trustees is owned by the taxpayer;

3. "Subsidiary capital" means investments in the stock of subsidiaries

and any indebtedness from subsidiaries, whether or not evidenced by

written instrument, on which interest is not claimed and deducted by the

subsidiary for purposes of taxation under this part or part three of

this title, provided, however, that, in the discretion of the director

of finance, there shall be deducted from subsidiary capital any

liabilities payable by their terms on demand or within one year from the

date incurred, other than loans or advances outstanding for more than a

year as of any date during the year covered by the report, which are

attributable to subsidiary capital;

4. "Investment capital" means investments in stocks, bonds and other

securities, corporate and governmental, not held for sale to customers

in the regular course of business, exclusive of subsidiary capital and

stock issued by the taxpayer, provided, however, that, in the discretion

of the director of finance there shall be deducted from investment

capital any liabilities payable by their terms on demand or within one

year from the date incurred, other than loans or advances outstanding

for more than a year as of any date during the year covered by the

report, which are attributable to investment capital;

5. "Investment income" means income, including capital gains in excess

of capital losses, from investment capital, to the extent included in

computing entire net income, less, (a) in the discretion of the director

of finance, any deductions allowable in computing entire net income

which are attributable to investment capital or investment income, and

(b) such portion of any net operating loss deduction allowable in

computing entire net income, as the investment income, before such

deduction, bears to entire net income, before such deduction, provided,

however, that in no case shall investment income exceed entire net

income;

6. "Business capital" means all assets, other than subsidiary capital,

investment capital and stock issued by the taxpayer, less liabilities

not deducted from subsidiary or investment capital which are payable by

their terms on demand or within one year from the date incurred, other

than loans or advances outstanding for more than a year as of any date

during the year covered by the report, except that, subject to the

provisions of subdivision six of section four of this part, cash on hand

and on deposit shall be treated as investment capital or as business

capital as the taxpayer may elect;

7. "Business income" means entire net income minus investment income;

8. "Entire net income" means total net income from all sources which

shall be the same as the taxpayer's entire federal taxable income

computed without regard to any election under subchapter s of chapter

one of the internal revenue code, except as hereinafter provided, and

subject to any modification required by paragraph (d) of subdivision

three of section four of this part.

(a) Entire net income shall not include:

(1) income, gains and losses from subsidiary capital which do not

include the amount of a recovery in respect of any war loss;

(2) fifty per centum of dividends other than from subsidiaries;

(3) bona fide gifts;

(4) income and deductions with respect to amounts received from school

districts and from corporations and associations, organized and operated

exclusively for religious, charitable or educational purposes, no part

of the net earnings of which inures to the benefit of any private

shareholder or individual, for the operation of school buses; and

(5) any refund or credit of a tax imposed under this part, or imposed

by article nine or article nine-A of the tax law, for which tax no

exclusion or deduction was allowed in determining the taxpayer's entire

net income under this part for any prior year;

(6) in the case of a taxpayer who is separately or as a partner of a

partnership doing an insurance business as a member of the New York

insurance exchange described in paragraph (a) of subdivision one of

section four hundred twenty-five-a of the insurance law, any item of

income, gain, loss or deduction of such business which is the taxpayer's

distributive or pro rata share for federal income tax purposes or which

the taxpayer is required to take into account separately for federal

income tax purposes.

(7) for taxable years beginning after December thirty-first, nineteen

hundred eighty-one, except with respect to property which is a qualified

mass commuting vehicle described in subparagraph (D) of paragraph eight

of subsection (f) of section one hundred sixty-eight of the internal

revenue code (relating to qualified mass commuting vehicles), any amount

which is included in the taxpayer's federal taxable income solely as a

result of an election made pursuant to the provisions of such paragraph

eight as it was in effect for agreements entered into prior to January

first, nineteen hundred eighty-four;

(8) for taxable years beginning after December thirty-first, nineteen

hundred eighty-one, except with respect to property which is a qualified

mass commuting vehicle described in subparagraph (D) of paragraph eight

of subsection (f) of section one hundred sixty-eight of the internal

revenue code (relating to qualified mass commuting vehicles), any amount

which the taxpayer could have excluded from federal taxable income had

it not made the election provided for in such paragraph eight as it was

in effect for agreements entered into prior to January first, nineteen

hundred eighty-four;

(9) the amount deductible pursuant to paragraph (j) of this

subdivision; and

(10) upon the disposition of recovery property to which paragraph (j)

of this subdivision applies, the amount, if any, by which the aggregate

of the amounts described in subparagraph eleven of paragraph (b) of this

subdivision attributable to such property exceeds the aggregate of the

amounts described in paragraph (j) of this subdivision attributable to

such property.

(11) for taxable years ending after September 10, 2001, the amount

deductible pursuant to paragraph (1) of this subdivision.

(b) Entire net income shall be determined without the exclusion,

deduction or credit of:

(1) the amount of any specific exemption or credit allowed in any law

of the United States imposing any tax on or measured by the income of

corporations,

(2) any part of any income from dividends or interest on any kind of

stock, securities or indebtedness, except as provided in clauses one and

two of paragraph (a) hereof,

(3) taxes paid or accrued to the United States on or measured by

profits or income or to the state under article nine or nine-a of the

tax law,

(4) taxes imposed under this part,

(4-a) (A) the entire amount allowable as an exclusion or deduction for

stock transfer taxes imposed by article twelve of the tax law in

determining the entire taxable income which the taxpayer is required to

report to the United States treasury department but only to the extent

that such taxes are incurred and paid in market making transactions and

(B) the amount allowed as an exclusion or deduction for sales and use

taxes imposed by section eleven hundred seven of the tax law in

determining the entire taxable income which the taxpayer is required to

report to the United States treasury department but only such portion of

such exclusion or deduction which is not in excess of the amount of the

credit allowed pursuant to section four-b of this part.

(4-b) the amount allowed as an exclusion or deduction imposed by the

tax law in determining the entire taxable income which the taxpayer is

required to report to the United States treasury department but only

such portion of such exclusion or deduction which is not in excess of

the amount of the credit or part thereof allowed pursuant to section

four-c of this part with respect to a taxable year.

(4-c) the amount allowed as an exclusion or deduction imposed by the

tax law in determining the entire taxable income which the taxpayer is

required to report to the United States treasury department but only

such portion of such exclusion or deduction which is not in excess of

the amount of the credit allowed pursuant to section four-d of this

part.

(4-d) The amount allowed as an exclusion or deduction for sales and

use taxes imposed by section eleven hundred seven of the tax law in

determining the entire taxable income which the taxpayer is required to

report to the United States Treasury Department but only such portion of

such exclusion or deduction which is not in excess of the amount of the

credit allowed pursuant to section four-e of this part.

(4-e) the amount allowed as an exclusion or deduction for sales and

use taxes imposed by section eleven hundred seven of the tax law in

determining the entire taxable income which the taxpayer is required to

report to the United States treasury department, but only such portion

of such exclusion or deduction which is not in excess of the amount of

the credit allowed pursuant to section four-f of this part.

(5) ninety per centum of interest on indebtedness directly or

indirectly owed to any stockholder or shareholder (including

subsidiaries of a corporate stockholder or shareholder), or members of

the immediate family of an individual stockholder or shareholder, owning

in the aggregate in excess of five per centum of the issued capital

stock of the taxpayer, except that such interest may, in any event, be

deducted

(A) up to an amount not exceeding one thousand dollars,

(B) in full to the extent that it relates to bonds or other evidences

of indebtedness issued, with stock, pursuant to a bona fide plan of

reorganization, to persons, who, prior to such reorganization, were bona

fide creditors of the corporation or its predecessors, but were not

stockholders or shareholders thereof,

(C) in full where the investment allocation percentage is applied to

entire net income, and

(D) in full to the extent that it is paid to a federally licensed

small business investment company;

(6) in the discretion of the director of finance, any amount of

interest directly or indirectly and any other amount directly

attributable as a carrying charge or otherwise to subsidiary capital or

to income, gains or losses from subsidiary capital; and

(7) any amount by reason of the granting, issuing or assuming of a

restricted stock option, as defined in the internal revenue code of

nineteen hundred fifty-four, or by reason of the transfer of the share

of stock upon the exercise of the option, unless such share is disposed

of by the grantee of the option within two years from the date of the

granting of the option or within six months after the transfer of such

share to him;

(8) in the case of a taxpayer who is separately or as a partner of a

partnership doing an insurance business as a member of the New York

insurance exchange described in paragraph (a) of subdivision one of

section four hundred twenty-five-a of the insurance law, such taxpayer's

distributive or pro rata share of the allocated entire net income of

such business as determined under sections fifteen hundred three and

fifteen hundred four of the tax law, provided however, in the event such

allocated entire net income is a loss, such taxpayer's distributive or

pro rata share of such loss shall not be subtracted from federal taxable

income in computing entire net income under this subdivision.

(9) for taxable years beginning after December thirty-first, nineteen

hundred eighty-one, except with respect to property which is a qualified

mass commuting vehicle described in subparagraph (D) of paragraph eight

of subsection (f) of section one hundred sixty-eight of the internal

revenue code (relating to qualified mass commuting vehicles), any amount

which the taxpayer claimed as a deduction in computing its federal

taxable income solely as a result of an election made pursuant to the

provisions of such paragraph eight as it was in effect for agreements

entered into prior to January first, nineteen hundred eighty-four;

(10) for taxable years beginning after December thirty-first, nineteen

hundred eighty-one, except with respect to property which is a qualified

mass commuting vehicle described in subparagraph (D) of paragraph eight

of subsection (f) of section one hundred sixty-eight of the internal

revenue code (relating to qualified mass commuting vehicles), any amount

which the taxpayer would have been required to include in the

computation of its federal taxable income had it not made the election

permitted pursuant to such paragraph eight as it was in effect for

agreements entered into prior to January first, nineteen hundred

eighty-four;

(11) for taxable years beginning after December thirty-first, nineteen

hundred eighty-one, except with respect to recovery property subject to

the provisions of section two hundred eighty-F of the internal revenue

code and recovery property placed in service in this state in taxable

years beginning after December thirty-first, nineteen hundred

eighty-four the amount allowable as a deduction under section one

hundred sixty-eight of the internal revenue code;

(12) upon the disposition of recovery property to which paragraph (j)

of this subdivision applies, the amount, if any, by which the aggregate

of the amounts described in such paragraph (j) attributable to such

property exceeds the aggregate of the amounts described in subparagraph

eleven of this paragraph attributable to such property.

(13) for taxable years ending after September 10, 2001, in the case of

qualified property described in paragraph 2 of subsection k of section

168 of the internal revenue code, other than qualified resurgence zone

property described in paragraph (n) of this subdivision, and other than

qualified New York Liberty Zone property described in paragraph 2 of

subsection b of section 1400L of the internal revenue code (without

regard to clause (i) of subparagraph (C) of such paragraph), the amount

allowable as a deduction under section 167 of the internal revenue code.

(c) Entire net income shall include income within and without the

United States;

(d) The director of finance may, whenever necessary in order properly

to reflect the entire net income of any taxpayer, determine the year or

period in which any item of income or deduction shall be included,

without regard to the method of accounting employed by the taxpayer;

(e) The entire net income of any bridge commission created by act of

congress to construct a bridge across an international boundary means

its gross income less the expense of maintaining and operating its

properties, the annual interest upon its bonds and other obligations,

and the annual charge for the retirement of such bonds or obligations at

maturity;

(f) A net operating loss deduction shall be allowed which shall be the

same as the net operating loss deduction allowed under section one

hundred seventy-two of the internal revenue code or which would have

been allowed if the taxpayer had not made an election under subchapter s

of chapter one of the internal revenue code, except that (1) any net

operating loss included in determining such deduction shall be adjusted

to reflect the inclusions and exclusions from entire net income pursuant

to paragraphs (a), (b), (g) and (h) hereof, (2) such deductions shall

not include any net operating loss sustained during any taxable year in

which the taxpayer was not subject to the tax imposed by this part, (3)

such deduction shall not exceed the deduction for the taxable year

allowable under section one hundred seventy-two of the internal revenue

code, or the deduction for the taxable year which would have been

allowable if the taxpayer had not made an election under subchapter s of

chapter one of the internal revenue code, and (4) any net operating loss

for a taxable year beginning in nineteen hundred eighty-one shall be

computed without regard to the deduction allowed with respect to

recovery property under section one hundred sixty-eight of the internal

revenue code; in lieu of such deduction, a taxpayer shall be allowed for

such taxable year with respect to such property the depreciation

deduction allowable under section one hundred sixty-seven of such code

as such section was in full force and effect on December thirty-first,

nineteen hundred eighty;

(g) At the election of the taxpayer, a deduction shall be allowed for

expenditures paid or incurred during the taxable year for the

construction, reconstruction, erection or improvement of industrial

waste treatment facilities and air pollution control facilities.

(1) (A) The term "industrial waste treatment facilities" shall mean

facilities for the treatment, neutralization or stabilization of

industrial waste (as the term "industrial waste" is defined in section

twelve hundred two of the public health law) from a point immediately

preceding the point of such treatment, neutralization or stabilization

to the point of disposal, including the necessary pumping and

transmitting facilities, but excluding such facilities installed for the

primary purpose of salvaging materials which are usable in the

manufacturing process or are marketable.

(B) The term "air pollution control facilities" shall mean facilities

which remove, reduce, or render less noxious air contaminants emitted

from an air contamination source (as the terms "air contaminant" and

"air contamination source" are defined in section twelve hundred

sixty-seven of the state public health law) from a point immediately

preceding the point of such removal, reduction or rendering to the point

of discharge of air, meeting emission standards as established by the

air pollution control board, but excluding such facilities installed for

the primary purpose of salvaging materials which are usable in the

manufacturing process or are marketable and excluding those facilities

which rely for their efficacy on dilution, dispersion or assimilation of

air contaminants in the ambient air after emission.

(2) However, such deduction shall be allowed only

(A) with respect to tangible property which is depreciable, pursuant

to section one hundred sixty-seven of the internal revenue code, having

a situs in the city and used in the taxpayer's trade or business, the

construction, reconstruction, erection or improvement of which, in the

case of industrial waste treatment facilities, is initiated on or after

January first, nineteen hundred sixty-six, and only for expenditures

paid or incurred prior to January first, nineteen hundred seventy-two,

or which, in the case of air pollution control facilities, is initiated

on or after January first, nineteen hundred sixty-six, and

(B) on condition that such facilities have been certified by the state

commissioner of health or his designated representative, pursuant to the

public health law, as complying with applicable provisions of the public

health law, the state sanitary code and regulations, permits or orders

issued pursuant thereto, and

(C) on condition that entire net income for the taxable year and all

succeeding taxable years be computed without any deductions for such

expenditures or for depreciation of the same property other than the

deductions allowed by this paragraph (g) except to the extent that the

basis of the property may be attributable to factors other than such

expenditures, or in case a deduction is allowable pursuant to this

paragraph for only a part of such expenditures, on condition that any

deduction allowed for federal income tax purposes for such expenditures

or for depreciation of the same property be proportionately reduced in

computing entire net income for the taxable year and all succeeding

taxable years, and

(D) where the election provided for in paragraph (d) of subdivision

three of section four of this part has not been exercised in respect to

the same property.

(3) (A) If expenditures in respect to an industrial waste treatment

facility or an air pollution control facility have been deducted as

provided herein and if within ten years from the end of the taxable year

in which such deduction was allowed such property or any part thereof is

used for the primary purpose of salvaging materials which are usable in

the manufacturing process or are marketable, the taxpayer shall report

such change of use in its report for the first taxable year during which

it occurs, and the director of finance may recompute the tax for the

year or years for which such deduction was allowed and any carryback or

carryover year, and may assess any additional tax resulting from such

recomputation within the time fixed by paragraph (h) of subdivision

three of section seventy-four.

(B) If a deduction is allowed as herein provided for expenditures paid

or incurred during any taxable year on the basis of a temporary

certificate of compliance issued pursuant to the public health law and

if the taxpayer fails to obtain a permanent certificate of compliance

upon completion of the facilities with respect to which such temporary

certificate was issued, the taxpayer shall report such failure in its

report for the taxable year during which such facilities are completed,

and the director of finance may recompute the tax for the year or years

for which such deduction was allowed and any carryback or carryover

year, and may assess any additional tax resulting from such

recomputation within the time fixed by paragraph (h) of subdivision

three of section seventy-four.

(4) In any taxable year when property is sold or otherwise disposed

of, with respect to which a deduction has been allowed pursuant to this

paragraph, such deduction shall be disregarded in computing gain or

loss, and the gain or loss on the sale or other disposition of such

property shall be the gain or loss entering into the computation of

entire taxable income which the taxpayer is required to report to the

United States treasury department for such taxable year;

(h) With respect to gain derived from the sale or other disposition of

any property acquired prior to January first, nineteen hundred

sixty-six, which had a federal adjusted basis on such date (or on the

date of its sale or other disposition prior to January first, nineteen

hundred sixty-six) lower than its fair market value on January first,

nineteen hundred sixty-six or the date of its sale or other disposition

prior thereto, except property described in subsections one and four of

section twelve hundred twenty-one of the internal revenue code, the

difference between---

(a) the amount of the taxpayer's federal taxable income, and

(b) the amount of the taxpayer's federal taxable income (if smaller

than the amount described in (a)) computed as if the federal adjusted

basis of each such property (on the sale or other disposition of which

gain was derived) on the date of the sale or other disposition had been

equal to either (i) its fair market value on January first, nineteen

hundred sixty-six or the date of its sale or other disposition prior to

January first, nineteen hundred sixty-six, plus or minus all adjustments

to basis made with respect to such property for federal income tax

purposes for periods on and after January first, nineteen hundred

sixty-six or (ii) the amount realized from its sale or disposition,

whichever is lower; provided, however, that the total modification

provided by this paragraph (h) shall not exceed the amount of the

taxpayer's net gain from the sale or other disposition of all such

property.

(i) If the period covered by a report under this part is other than

the period covered by the report to the United States treasury

department, entire net income shall be determined by multiplying the

federal taxable income (as adjusted pursuant to the provisions of this

part) by the number of calendar months or major parts thereof covered by

the report under this part and dividing by the number of calendar months

or major parts thereof covered by the report to such department. If it

shall appear that such method of determining entire net income does not

properly reflect the taxpayer's income during the period covered by the

report under this part, the director of finance shall be authorized in

his discretion to determine such entire net income solely on the basis

of the taxpayer's income during the period covered by its report under

this part.

(j) For taxable years beginning after December thirty-first, nineteen

hundred eighty-one, except with respect to recovery property subject to

the provisions of section two hundred eighty-F of the internal revenue

code and recovery property placed in service in this state in taxable

years beginning after December thirty-first, nineteen hundred

eighty-four, and provided a deduction has not been excluded from entire

net income pursuant to subparagraph nine of paragraph (b) of this

subdivision, a taxpayer shall be allowed with respect to recovery

property the depreciation deduction allowable under section one hundred

sixty-seven of the internal revenue code as such section would have

applied to property placed in service on December thirty-first, nineteen

hundred eighty.

(l) for taxable years ending after September 10, 2001, in the case of

qualified property described in paragraph 2 of subsection k of section

168 of the internal revenue code, other than qualified resurgence zone

property described in paragraph (n) of this subdivision, and other than

qualified New York Liberty Zone property described in paragraph 2 of

subsection b of section 1400L of the internal revenue code (without

regard to clause (i) of subparagraph (C) of such paragraph), a taxpayer

shall be allowed with respect to such property the depreciation

deduction allowable under section 167 of the internal revenue code as

such section would have applied to such property had it been acquired by

the taxpayer on September 10, 2001.

(m) for taxable years ending after September 10, 2001, upon the

disposition of property to which paragraph (l) of this subdivision

applies, the amount of any gain or loss includible in entire net income

shall be adjusted to reflect the inclusions and exclusions from entire

net income pursuant to subparagraph 11 of paragraph (a) and subparagraph

13 of paragraph (b) of this subdivision attributable to such property.

(n) for purposes of paragraphs (l) and (m) of this subdivision,

qualified resurgence zone property shall mean qualified property

described in paragraph 2 of subsection k of section 168 of the internal

revenue code substantially all of the use of which is in the resurgence

zone, as defined below, and is in the active conduct of a trade or

business by the taxpayer in such zone, and the original use of which in

the resurgence zone commences with the taxpayer after September 10,

2001. The resurgence zone shall mean the area of New York county bounded

on the south by a line running from the intersection of the Hudson River

with the Holland Tunnel, and running thence east to Canal Street, then

running along the centerline of Canal Street to the intersection of the

Bowery and Canal Street, running thence in a southeasterly direction

diagonally across Manhattan Bridge Plaza, to the Manhattan Bridge and

thence along the centerline of the Manhattan Bridge to the point where

the centerline of the Manhattan Bridge would intersect with the easterly

bank of the East River, and bounded on the north by a line running from

the intersection of the Hudson River with the Holland Tunnel and running

thence north along West Avenue to the intersection of Clarkson Street

then running east along the centerline of Clarkson Street to the

intersection of Washington Avenue, then running south along the

centerline of Washington Avenue to the intersection of West Houston

Street, then east along the centerline of West Houston Street, then at

the intersection of the Avenue of the Americas continuing east along the

centerline of East Houston Street to the easterly bank of the East

River.

9. (a) The term "calendar year" means a period of twelve calendar

months (or any shorter period beginning on the date the taxpayer becomes

subject to the tax imposed by this part) ending on the thirty-first day

of December, provided the taxpayer keeps its books on the basis of such

period or on the basis of any period ending on any day other than the

last day of a calendar month, or provided the taxpayer does not keep

books, and includes, in case the taxpayer changes the period on the

basis of which it keeps its books from a fiscal year to a calendar year,

the period from the close of its last old fiscal year up to and

including the following December thirty-first.

(b) The term "fiscal year" means a period of twelve calendar months

(or any shorter period beginning on the date the taxpayer becomes

subject to the tax imposed by this part) ending on the last day of any

month other than December, provided the taxpayer keeps its books on the

basis of such period, and includes, in case the taxpayer changes the

period on the basis of which it keeps its books from a calendar year to

a fiscal year or from one fiscal year to another fiscal year, the period

from the close of its last old calendar or fiscal year up to the date

designated as the close of its new fiscal year.

10. The term "tangible personal property" means corporeal personal

property, such as machinery, tools, implements, goods, wares and

merchandise, and does not mean money, deposits in banks, shares of

stock, bonds, notes, credits or evidences of an interest in property and

evidences of debt.