N.Y. Tax Law § 184: Additional franchise tax on transportation and transmission corporations and associations

§ 184. Additional franchise tax on transportation and transmission

corporations and associations.-- 1. The term "corporation" as used in

this section shall include an association, within the meaning of

paragraph three of subsection (a) of section seventy-seven hundred one

of the internal revenue code (including a limited liability company), a

publicly traded partnership treated as a corporation for purposes of the

internal revenue code pursuant to section seventy-seven hundred four

thereof.

Every corporation, joint-stock company or association formed for or

principally engaged in the conduct of canal, steamboat, ferry (except a

ferry company operating between any of the boroughs of the city of New

York under a lease granted by the city), express, navigation, pipe line,

transfer, baggage express, omnibus, taxicab, telegraph or local

telephone business, or formed for or principally engaged in the conduct

of two or more of such businesses, and every corporation, joint-stock

company or association formed for or principally engaged in the conduct

of surface railroad, whether or not operated by steam, subway railroad,

elevated railroad, palace car, sleeping car or trucking business or

formed for or principally engaged in the conduct of two or more such

businesses and which has made an election pursuant to subdivision ten of

section one hundred eighty-three of this article, and every other

corporation, joint-stock company or association formed for or

principally engaged in the conduct of a transportation or transmission

business (other than a telephone business), except a corporation,

joint-stock company or association formed for or principally engaged in

the conduct of a surface railroad, whether or not operated by steam,

subway railroad, elevated railroad, palace car, sleeping car or trucking

business or formed for or principally engaged in the conduct of two or

more of such businesses and which has not made the election provided for

in subdivision ten of section one hundred eighty-three of this article,

and, except a corporation, joint-stock company or association

principally engaged in the conduct of aviation (including air freight

forwarders acting as principal and like indirect air carriers) and

except a corporation principally engaged in providing telecommunication

services between aircraft and dispatcher, aircraft and air traffic

control or ground station and ground station (or any combination of the

foregoing), at least ninety percent of the voting stock of which

corporation is owned, directly or indirectly, by air carriers and which

corporation's principal function is to fulfill the requirements of (i)

the federal aviation administration (or the successor thereto) or (ii)

the international civil aviation organization (or the successor

thereto), relating to the existence of a communication system between

aircraft and dispatcher, aircraft and air traffic control or ground

station and ground station (or any combination of the foregoing) for the

purposes of air safety and navigation and for the privilege of

exercising its corporate franchise, or of doing business, or of

employing capital, or of owning or leasing property in this state in a

corporate or organized capacity, or maintaining an office in this state,

shall pay a franchise tax which shall be equal to three-eighths of one

percent for taxable years commencing after two thousand, upon its gross

earnings from all sources within this state; except that, for taxable

years commencing on or after January first, nineteen hundred ninety,

every corporation, joint-stock company or association formed for or

principally engaged in the conduct of local telephone business, or

telegraph business shall pay a franchise tax which shall be equal to

three-eighths of one percent for taxable years commencing after two

thousand, upon its gross earnings from all sources within this state,

except that a corporation, joint-stock company or association formed for

or principally engaged in the conduct of a local telephone business

shall exclude the following earnings (but not in any event earnings

derived by such taxpayer from the provision of carrier access services)

derived by such taxpayer from sales for ultimate consumption of

telecommunications service to its customers (i) thirty percent of

separately charged intra-LATA toll service (which shall also include

interregion regional calling plan service) and (ii) one hundred percent

of separately charged inter-LATA, interstate or international

telecommunications service; and except that corporations, joint-stock

companies or associations formed for or principally engaged in the

conduct of canal, steamboat, ferry (except a ferry company operating

between any of the boroughs of the city of New York under a lease

granted by the city), navigation or any corporation formed for or

principally engaged in the operation of vessels, shall pay a franchise

tax which shall be equal to three-quarters of one per centum upon its

gross earnings from all sources within this state, excluding earnings

derived from business of an interstate or foreign character; except that

for taxable years beginning in nineteen hundred ninety-seven or

thereafter, in the case of a corporation, joint-stock company or

association which, with respect to taxable years beginning after

nineteen hundred ninety-seven, has made an election pursuant to

subdivision ten of section one hundred eighty-three of this article and

which is formed for or principally engaged in the conduct of surface

railroad, whether or not operated by steam, subway railroad, elevated

railroad, palace car, sleeping car or trucking business or formed for or

principally engaged in the conduct of two or more of such businesses,

such corporation, joint-stock company or association shall pay a

franchise tax which shall be equal to three-eighths of one percent for

taxable years commencing after two thousand, upon its gross earnings

from all sources within this state, provided that in the case of a

corporation, joint-stock company or association formed for or

principally engaged in the conduct of surface railroad, whether or not

operated by steam, subway railroad, elevated railroad, palace car or

sleeping car business, or formed for or principally engaged in the

conduct of two or more of such businesses, such gross earnings shall not

include earnings derived from business of an interstate or foreign

character.

Provided, however, with respect to railroad, elevated railroad, palace

car or sleeping car business or any other corporation formed for or

principally engaged in the conduct of a railroad business and canal,

steamboat, ferry (except a ferry company operating between any of the

boroughs of the city of New York under a lease granted by the city),

navigation or any corporation formed for or principally engaged in the

operation of vessels where the gross earnings from such transportation

business both originating and terminating within this state and

traversing both this state and another state or states or country shall

be subject to the franchise tax imposed by this section (except where

such corporation, joint-stock company or association is formed for or

principally engaged in the conduct of a railroad (including surface

railroad, whether or not operated by steam, subway railroad or elevated

railroad), palace car or sleeping car business or formed for or

principally engaged in the conduct of two or more of such businesses,

and has not made the election provided for under subdivision ten of

section one hundred eighty-three of this article) and such earnings

shall be allocated to this state in the same ratio that the mileage

within the state bears to the total mileage of such business. Provided,

further, a corporation, joint-stock company or association formed for or

principally engaged in the transportation, transmission or distribution

of gas, electricity or steam shall not be subject to tax under this

section or section one hundred eighty-three of this article.

The term "local telephone business" means the provision or furnishing

of telecommunication services for hire wherein the service furnished by

the provider thereof consists of carrier access service or the service

originates and terminates within the same local access and transport

area ("LATA"), a local access and transport area being that geographic

area as established and approved, and as so set and in existence on July

first, nineteen hundred ninety-four, pursuant to the modification of

final judgment in United States v. Western Electric Company (civil

action no. 82-0192) in the United States district court for the District

of Columbia or within the LATA-like Rochester non-associated independent

area.

The term "telecommunication services" shall have the meaning ascribed

to such term in section one hundred eighty-six-e of this article.

1-a. Where a taxpayer is a partner, member or associate of a publicly

traded partnership or an association which is subject to the tax imposed

under this section, the amount to be included in such taxpayer's gross

earnings with respect to such partnership or association shall be the

amount received with respect to such partnership or association which is

required to be reported as dividends to the United States treasury

department.

2. (a) During the period that the state tax on motor fuel, computed

without regard to any reimbursement allowable under paragraph (d) of

subdivision three of section two hundred eighty-nine-c of this chapter,

exceeds two cents per gallon the corporations herein classed as

"taxicab" and "omnibus", other than corporations described in paragraph

(b) of this subdivision, shall be taxed under the provisions of article

nine-a of the tax law and as other business corporations are taxed and

not upon their gross receipts.

(b) (1) A corporation classed as a "taxicab" or "omnibus",

(i) which is organized, incorporated or formed under the laws of any

other state, country or sovereignty, and

(ii) which neither owns nor leases property in this state in a

corporate or organized capacity, nor

(iii) maintains an office in this state in a corporate or organized

capacity, but

(iv) which is doing business or employing capital in this state by

conducting at least one but fewer than twelve trips into this state

during the calendar year, shall not be taxed under the provisions of

this article. If the only property a corporation owns or leases in this

state is a vehicle or vehicles used to conduct trips, it shall not be

considered, for purposes of clause (ii) of this subparagraph, to be

owning or leasing property in this state.

(2) For purposes of this subdivision, a corporation classed as a

"taxicab" or "omnibus" shall be considered to be conducting a trip into

New York state when one of its vehicles enters New York state and

transports passengers to, from, or to and from a location in New York

state. A corporation shall not be considered to be conducting a trip

into New York state if its vehicle only makes incidental stops at

locations in the state while in transit from a location outside New York

state to another location outside New York state. The number of trips a

corporation conducts into New York state shall be calculated by

determining the number of trips each vehicle owned, leased or operated

by the corporation conducts into New York state and adding those numbers

together.

3. Any corporation, joint-stock company or association formed for or

principally engaged in the conduct of subway railroad, elevated

railroad, or surface railroad not operated by steam, business, whose

property is leased to another railroad corporation, shall only be

required under this section to pay an annual tax at the rate of four and

one-half per centum upon the dividends paid during the year ending on

the thirty-first day of December in excess of four per centum upon the

amount of its capital stock, provided, however, that for the year ending

on the thirty-first day of December nineteen hundred seventy-six, as

described in subdivision two of section one hundred ninety-two of this

chapter, the tax shall be paid upon dividends paid during the months of

July through December of such year in excess of two per centum upon the

amount of its capital stock, except that where the property leased is

operated by a receiver and the gross earnings are not included with the

gross earnings of the lessee for the purposes of taxation under this

section, then such receiver shall be required to pay the tax upon gross

earnings as hereinbefore provided.

4. Allocation of gross earnings from transportation and transmission

services.--(a) General. A transportation or transmission corporation

shall determine its gross earnings from transportation and transmission

services within this state (except as otherwise provided for in this

subdivision) by multiplying its gross earnings from transportation and

transmission within and without the state by a fraction, the numerator

of which is the taxpayer's mileage within this state and the denominator

of which is the taxpayer's mileage within and without this state during

the period covered by the report or reports required by this chapter.

(b) Corporations engaged in the operation of vessels. A corporation

principally engaged in the operation of vessels shall determine its

gross earnings from transportation services within this state during the

period covered by the report or reports required by this chapter by

multiplying its gross earnings from transportation services within and

without this state by a percentage which represents the ratio of the

aggregate number of working days of the vessels it owns or leases in all

navigable lakes, rivers, streams and waters within this state and in New

York territorial waters to the aggregate number of working days of all

the vessels it owns or leases during such period.

(c) Telephone and telegraph corporations. A telephone or telegraph

corporation shall determine its gross earnings from transmission

services within this state during the period covered by the report or

reports required by this chapter by totaling its gross operating revenue

from transmission services performed wholly within this state plus the

portion of revenue from interstate and foreign transmission service

attributable to this state during such report period.

(d) All other gross earnings, if any, shall be allocated to this state

in the manner prescribed by rules and regulations promulgated by the tax

commission.

(e) With respect to other types of transportation and transmission

corporations or where the tax commission decides that with respect to a

certain corporation the method prescribed above does not fairly and

equitably reflect gross earnings from all sources within this state, the

tax commission shall prescribe methods of allocation or apportionment

which fairly and equitably reflect gross earnings from all sources

within this state. Also, the tax commission may, in order to properly

reflect gross earnings, determine the report period in which any item of

gross earnings shall be included without regard to the method of

accounting employed by a corporation taxable hereunder.

7-a. A railroad, palace car or sleeping car corporation, navigation,

canal, ferry (except a ferry company operating between any of the

boroughs of the city of New York under a lease granted by the city),

steamboat, or any other corporation formed for or principally engaged in

the operation of vessels whose only activity in this state is (i) the

maintenance of an office in this state and for the employing of capital

in this state and (ii) the use of property exclusively in interstate or

foreign commerce, shall not be subject to the tax imposed by this

section.