N.Y. General City Model 772/66 § 4-a: Credit relating to stock transfer tax

§ 4-a. Credit relating to stock transfer tax. (1) A taxpayer shall be

allowed a credit, to be credited or refunded in the manner hereinafter

provided in this section, against the tax imposed by this part. The

amount of such credit shall be fifty per cent of the tax incurred in

market making transactions under the provisions of article twelve of the

tax law on such transactions subject to such tax occurring on and after

August first, nineteen hundred seventy-six and paid by such taxpayer

(except when such tax shall have been paid pursuant to section two

hundred seventy-nine-a of such tax law).

(2) For purposes of this subsection:

(a) the term "taxpayer" shall mean any corporation subject to tax

under this part registered with the United States securities and

exchange commission in accordance with subsection (b) of section fifteen

of the securities exchange act of nineteen hundred thirty-four, as

amended, and acting as a dealer in a transaction described in paragraph

(b) of this subdivision, and

(b) the term "market making transaction" shall mean any transaction

involving a sale (including a short sale) by a dealer of shares or

certificates subject to the tax imposed by article twelve of the tax

law, provided such shares or certificates are sold:

(i) as stock in trade or inventory or as property held for sale in the

ordinary course of such dealer's trade or business (including transfers

which are part of an underwriting),

(ii) in (a) a bona fide arbitrage transaction; (b) a bona fide hedge

transaction involving a long or short position in any equity security

and a long or short position in a security entitling the holder to

acquire or sell such equity security; or (c) a risk arbitrage

transaction in connection with a merger, acquisition, tender offer,

recapitalization, reorganization, or similar transaction, or

(iii) to offset a transaction made in error.

Provided, however, that, except as to subparagraph (ii) (c) of this

paragraph, the term "market making transaction" shall not include any

sale of shares or certificates identified in such dealer's records as a

security held for investment within the meaning of section twelve

hundred thirty-six of the internal revenue code.

(3) The credit allowed under this section for any taxable year shall

be deemed to be an overpayment of tax by the taxpayer to be credited or

refunded in accordance with the provisions of section seventy-seven of

this title, except as otherwise provided in subdivision three of section

six and subdivision eleven of section eight of this part; provided,

however, that the provisions of this chapter notwithstanding, the amount

to be refunded pursuant to this section shall not be paid prior to the

first day of the eighth month following the close of the taxable year,

and the provisions of subdivision three of section seventy-nine of this

title notwithstanding, interest shall be allowed and paid on the

overpayment of the credit under this section from the first day of the

eleventh month following the close of the taxable year, or three months

after a claim for the credit or refund provided for in this section has

been filed, whichever is later.

(4) Provided, however, that the credit provided under this subsection

shall be allowed only to the extent that the amount of credit allowable

with respect to market making transactions under the provisions of this

subsection (determined without regard to the provisions of this

subdivision) exceeds fifty percent of all rebates (provided for under

the provisions of section two hundred eighty-a of article twelve of the

tax law) allowed for such taxes incurred in the same market making

transactions with respect to which the credit is allowed. No credit

shall be allowed under this subsection with respect to any tax incurred

in market making transactions occurring on or after October first,

nineteen hundred eighty-one.