N.Y. Tax Law § 210: Computation of tax

§ 210. Computation of tax. 1. The tax imposed by subdivision one of

section two hundred nine of this chapter shall be: (A) in the case of

each taxpayer other than a New York S corporation or a qualified

homeowners association, the highest of the amounts prescribed in

paragraphs (a), (b), and (d) of this subdivision, (B) in the case of

each New York S corporation, the amount prescribed in paragraph (d) of

this subdivision, and (C) in the case of a qualified homeowners

association, the highest of the amounts prescribed in paragraphs (a) and

(b) of this subdivision. For purposes of this paragraph, the term

"qualified homeowners association" means a homeowners association, as

such term is defined in subsection (c) of section five hundred

twenty-eight of the internal revenue code without regard to subparagraph

(E) of paragraph one of such subsection (relating to elections to be

taxed pursuant to such section), which has no homeowners association

taxable income, as such term is defined in subsection (d) of such

section. Provided, however, that in the case of a small business

taxpayer (other than a New York S corporation) as defined in paragraph

(f) of this subdivision, for taxable years beginning before January

first, two thousand sixteen, if the amount prescribed in such paragraph

(b) is higher than the amount prescribed in such paragraph (a) solely by

reason of the application of the rate applicable to small business

taxpayers, then with respect to such taxpayer the tax referred to in the

previous sentence shall be higher of the amounts prescribed in

paragraphs (a) and (d) of this subdivision.

(a) Business income base. For taxable years beginning before January

first, two thousand sixteen, the amount prescribed by this paragraph

shall be computed at the rate of seven and one-tenth percent of the

taxpayer's business income base. For taxable years beginning on or after

January first, two thousand sixteen, the amount prescribed by this

paragraph shall be six and one-half percent of the taxpayer's business

income base. For taxable years beginning on or after January first, two

thousand twenty-one and before January first, two thousand thirty for

any taxpayer with a business income base for the taxable year of more

than five million dollars, the amount prescribed by this paragraph shall

be seven and one-quarter percent of the taxpayer's business income base.

The taxpayer's business income base shall mean the portion of the

taxpayer's business income apportioned within the state as hereinafter

provided. However, in the case of a small business taxpayer, as defined

in paragraph (f) of this subdivision, the amount prescribed by this

paragraph shall be computed pursuant to subparagraph (iv) of this

paragraph and in the case of a manufacturer, as defined in subparagraph

(vi) of this paragraph, the amount prescribed by this paragraph shall be

computed pursuant to subparagraph (vi) of this paragraph, and, in the

case of a qualified emerging technology company, as defined in

subparagraph (vii) of this paragraph, the amount prescribed by this

paragraph shall be computed pursuant to subparagraph (vii) of this

paragraph.

(iv) for taxable years beginning before January first, two thousand

sixteen, if the business income base is not more than two hundred ninety

thousand dollars the amount shall be six and one-half percent of the

business income base; if the business income base is more than two

hundred ninety thousand dollars but not over three hundred ninety

thousand dollars the amount shall be the sum of (1) eighteen thousand

eight hundred fifty dollars, (2) seven and one-tenth percent of the

excess of the business income base over two hundred ninety thousand

dollars but not over three hundred ninety thousand dollars and (3) four

and thirty-five hundredths percent of the excess of the business income

base over three hundred fifty thousand dollars but not over three

hundred ninety thousand dollars;

(v) if the taxable period to which subparagraph (iv) of this paragraph

applies is less than twelve months, the amount prescribed by this

paragraph shall be computed as follows:

(A) Multiply the business income base for such taxpayer by twelve;

(B) Divide the result obtained in (A) by the number of months in the

taxable year;

(C) Compute an amount pursuant to subparagraph (iv) as if the result

obtained in (B) were the taxpayer's business income base;

(D) Multiply the result obtained in (C) by the number of months in the

taxpayer's taxable year;

(E) Divide the result obtained in (D) by twelve.

(vi) for taxable years beginning on or after January first, two

thousand fourteen, the amount prescribed by this paragraph for a

taxpayer that is a qualified New York manufacturer, shall be computed at

the rate of zero percent of the taxpayer's business income base. The

term "manufacturer" shall mean a taxpayer that during the taxable year

is principally engaged in the production of goods by manufacturing,

processing, assembling, refining, mining, extracting, farming,

agriculture, horticulture, floriculture, viticulture or commercial

fishing. However, the generation and distribution of electricity, the

distribution of natural gas, and the production of steam associated with

the generation of electricity shall not be qualifying activities for a

manufacturer under this subparagraph. Moreover, in the case of a

combined report, the combined group shall be considered a "manufacturer"

for purposes of this subparagraph only if the combined group during the

taxable year is principally engaged in the activities set forth in this

paragraph, or any combination thereof. A taxpayer or, in the case of a

combined report, a combined group shall be "principally engaged" in

activities described above if, during the taxable year, more than fifty

percent of the gross receipts of the taxpayer or combined group,

respectively, are derived from receipts from the sale of goods produced

by such activities. In computing a combined group's gross receipts,

intercorporate receipts shall be eliminated. A "qualified New York

manufacturer" is a manufacturer that has property in New York that is

described in clause (A) of subparagraph (i) of paragraph (b) of

subdivision one of section two hundred ten-B of this article and either

(I) the adjusted basis of such property for New York state tax purposes

at the close of the taxable year is at least one million dollars or (II)

all of its real and personal property is located in New York. A taxpayer

or, in the case of a combined report, a combined group, that does not

satisfy the principally engaged test may be a qualified New York

manufacturer if the taxpayer or the combined group employs during the

taxable year at least two thousand five hundred employees in

manufacturing in New York and the taxpayer or the combined group has

property in the state used in manufacturing, the adjusted basis of which

for New York state tax purposes at the close of the taxable year is at

least one hundred million dollars.

(vii) For a taxpayer that is defined as a qualified emerging

technology company under paragraph (c) of subdivision one of section

thirty-one hundred two-e of the public authorities law regardless of the

ten million dollar limitation expressed in subparagraph one of such

paragraph (c) the amount prescribed by this paragraph shall be computed

at the rate of 5.7 percent for taxable years beginning on or after

January first, two thousand fifteen and before January first, two

thousand sixteen, 5.5 percent for taxable years beginning on or after

January first two thousand sixteen and before January first, two

thousand eighteen, and 4.875 percent for taxable years beginning on or

after January first, two thousand eighteen.

(viii) (A) In computing the business income base, taxpayers shall be

allowed both a prior net operating loss conversion subtraction under

this subparagraph and a net operating loss deduction under subparagraph

(ix) of this paragraph. The prior net operating loss conversion

subtraction computed under this subparagraph shall be applied against

the business income base before the net operating loss deduction

computed under subparagraph (ix) of this paragraph.

(B) Prior net operating loss conversion subtraction.

(1) Definitions.

(I) "Base year" means the last taxable year beginning on or after

January first, two thousand fourteen and before January first, two

thousand fifteen.

(II) "Unabsorbed net operating loss" means the unabsorbed portion of

net operating loss as calculated under paragraph (f) of subdivision nine

of section two hundred eight of this article or subsection (k-1) of

section fourteen hundred fifty-three of this chapter as such sections

were in effect on December thirty-first, two thousand fourteen, that was

not deductible in previous taxable years and was eligible for carryover

on the last day of the base year subject to the limitations for

deduction under such sections, including any net operating loss

sustained by the taxpayer during the base year.

(III) "Base year BAP" means the taxpayer's business allocation

percentage as calculated under paragraph (a) of subdivision three of

this section for the base year, or the taxpayer's allocation percentage

as calculated under section fourteen hundred fifty-four of this chapter

for purposes of calculating entire net income for the base year, as such

sections were in effect on December thirty-first, two thousand fourteen.

(IV) "Base year tax rate" means the taxpayer's tax rate for the base

year as calculated under this paragraph or subsection (a) of section

fourteen hundred fifty-five of this chapter, as such provisions were in

effect on December thirty-first, two thousand fourteen.

(2) The prior net operating loss conversion subtraction shall be

calculated as follows:

(I) The taxpayer shall first calculate the tax value of its unabsorbed

net operating loss for the base year. The value is equal to the product

of (I) the amount of the taxpayer's unabsorbed net operating loss, (II)

the taxpayer's base year BAP, and (III) the taxpayer's base year tax

rate.

(II) The product determined under item (I) of this subclause is then

divided by six and one-half percent, or in the case of a qualified New

York manufacturer, five and seven-tenths percent. This result shall

equal the taxpayer's prior net operating loss conversion subtraction

pool.

(III) The taxpayer's prior net operating loss conversion subtraction

for the taxable year shall equal one-tenth of its net operating loss

conversion subtraction pool plus any amount of unused prior net

operating loss conversion subtraction from preceding taxable years.

Provided, however, the prior net operating loss conversion subtraction

of a small business corporation, as defined in paragraph (f) of this

subdivision, as of the last day of the base year, shall not be subject

to the one-tenth limitation in the previous sentence.

(IV) In lieu of the subtraction described in item (III) of this

subclause, if the taxpayer so elects, the taxpayer's prior net operating

loss conversion subtraction for the tax years beginning on or after

January first, two thousand fifteen and before January first, two

thousand seventeen shall equal in each year, not more than one-half of

its net operating loss conversion subtraction pool until the pool is

exhausted. If the pool is not exhausted at the end of such time period,

the remainder of the pool shall be forfeited. The taxpayer shall make

such revocable election on its first return for the tax year beginning

on or after January first, two thousand fifteen and before January

first, two thousand sixteen by the due date for such return (determined

with regard to extensions).

(3) Combined groups. (I) Where a taxpayer was properly included or

required to be included in a combined report for the base year pursuant

to section two hundred eleven of this article or a combined return under

section fourteen hundred sixty-two of this chapter, as such sections

were in effect on December thirty-first, two thousand fourteen, and the

members of the combined group for the base year are the same as the

members of the combined group for the taxable year immediately

succeeding the base year, the combined group shall calculate its prior

net operating loss conversion subtraction pool using the combined

group's total unabsorbed net operating loss, base year BAP, and base

year tax rate.

(II) If a combined group includes additional members in the taxable

year immediately succeeding the base year that were not included in the

combined group during the base year, each base year combined group and

each taxpayer that filed separately in the base year but is included in

the combined group in the taxable year succeeding the base year shall

calculate its prior net operating loss conversion subtraction pool, and

the sum of the pools shall be the combined prior net operating loss

conversion subtraction pool of the combined group.

(III) If a taxpayer was properly included in a combined report for the

base year and files a separate report in a subsequent taxable year, then

the amount of remaining prior net operating loss conversion subtraction

allowed to the taxpayer filing such separate report shall be

proportionate to the amount that such taxpayer contributed to the prior

net operating loss conversion subtraction pool on a combined basis, and

the remaining prior net operating loss conversion subtraction allowed to

the remaining members of the combined group shall be reduced

accordingly.

(IV) If a taxpayer filed a separate report for the base year and is

properly included in a combined report in a subsequent taxable year,

then the prior net operating loss conversion subtraction pool of the

combined group shall be increased by the amount of the remaining net

operating loss conversion subtraction allowed to the taxpayer at the

time the taxpayer is properly included in the combined group.

(4) The prior net operating loss conversion subtraction may be used to

reduce the taxpayer's tax on the apportioned business income base to the

higher of the tax on the capital base under paragraph (b) of this

subdivision or the fixed dollar minimum under paragraph (d) of this

subdivision. Unless the taxpayer has made the election provided for in

item (IV) of subclause two of this clause, any amount of unused

subtraction shall be carried forward to subsequent tax year or years

until the prior net operating loss conversion subtraction pool is

exhausted, but for no longer than twenty taxable years, or the taxable

year beginning on or after January first, two thousand thirty-five but

before January first, two thousand thirty-six, whichever comes first.

Such amount carried forward shall not be subject to the one-tenth

limitation for the subsequent tax year or years. However, if the

taxpayer elects to compute its prior net operating loss conversion

subtraction pursuant to item (IV) of subclause two of this clause, the

taxpayer shall not carry forward any unused amount of such subtraction

to any tax year beginning on or after January first, two thousand

seventeen.

(ix) Net operating loss deduction. In computing the business income

base, a net operating loss deduction shall be allowed. A net operating

loss deduction is the amount of net operating loss or losses from one or

more taxable years that are carried forward or carried back to a

particular taxable year. A net operating loss is the amount of a

business loss incurred in a particular tax year multiplied by the

apportionment factor for that year as determined under section two

hundred ten-A of this article. The maximum net operating loss deduction

that is allowed in a taxable year is the amount that reduces the

taxpayer's tax on the apportioned business income base to the higher of

the tax on the capital base or the fixed dollar minimum. Such deduction

and loss are determined in accordance with the following:

(1) Such net operating loss deduction is not limited to the amount

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

code or the amount that would have been allowed if the taxpayer had not

made an election under subchapter S of chapter one of the internal

revenue code.

(2) Such net operating loss deduction shall not include any net

operating loss incurred during any taxable year beginning prior to

January first, two thousand fifteen, or during any taxable year in which

the taxpayer was not subject to the tax imposed by this article.

(3) A taxpayer that files as part of a federal consolidated return but

on a separate basis for purposes of this article must compute its

deduction and loss as if it were filing on a separate basis for federal

income tax purposes.

(4) A net operating loss may be carried back three taxable years

preceding the taxable year of the loss ("the loss year"). However no

loss can be carried back to a taxable year beginning before January

first, two thousand fifteen. The loss is first carried to the earliest

of the three taxable years. If it is not entirely used in that year, it

is carried to the second taxable year preceding the loss year, and any

remaining amount is carried to the taxable year immediately preceding

the loss year. Any unused amount of loss then remaining may be carried

forward for as many as twenty taxable years following the loss year.

Losses carried forward are carried forward first to the taxable year

immediately following the loss year, then to the second taxable year

following the loss year, and then to the next immediately subsequent

taxable year or years until the loss is used up or the twentieth taxable

year following the loss year, whichever comes first.

(5) Such net operating loss deduction shall not include any net

operating loss incurred during a New York S year; provided, however, a

New York S year must be treated as a taxable year for purposes of

determining the number of taxable years to which a net operating loss

may be carried forward.

(6) Where there are two or more apportioned net operating losses, or

portions thereof, carried back or carried forward to be deducted in one

particular tax year from apportioned business income, the earliest

apportioned loss incurred must be applied first.

(7) A taxpayer may elect to waive the entire carryback period with

respect to a net operating loss. Such election must be made on the

taxpayer's original timely filed return (determined with regard to

extensions) for the taxable year of the net operating loss for which the

election is to be in effect. Once an election is made for a taxable

year, it shall be irrevocable for that taxable year. A separate election

must be made for each loss year. This election applies to all members of

a combined group.

(b) Capital base. (1) (i) The amount prescribed by this paragraph

shall be computed at .15 percent for each dollar of the taxpayer's total

business capital, or the portion thereof apportioned within the state as

hereinafter provided for taxable years beginning before January first,

two thousand sixteen. However, in the case of a cooperative housing

corporation as defined in the internal revenue code, the applicable rate

shall be .04 percent until taxable years beginning on or after January

first, two thousand twenty and zero percent for taxable years beginning

on or after January first, two thousand twenty-one. The rate of tax for

subsequent tax years shall be as follows: .125 percent for taxable years

beginning on or after January first, two thousand sixteen and before

January first, two thousand seventeen; .100 percent for taxable years

beginning on or after January first, two thousand seventeen and before

January first, two thousand eighteen; .075 percent for taxable years

beginning on or after January first, two thousand eighteen and before

January first, two thousand nineteen; .050 percent for taxable years

beginning on or after January first, two thousand nineteen and before

January first, two thousand twenty; .025 percent for taxable years

beginning on or after January first, two thousand twenty and before

January first, two thousand twenty-one; and .1875 percent for years

beginning on or after January first, two thousand twenty-one and before

January first, two thousand thirty, and zero percent for taxable years

beginning on or after January first, two thousand thirty. Provided

however, for taxable years beginning on or after January first, two

thousand twenty-one, the rate of tax for a small business as defined in

paragraph (f) of this subdivision shall be zero percent. The rate of tax

for a qualified New York manufacturer shall be .132 percent for taxable

years beginning on or after January first, two thousand fifteen and

before January first, two thousand sixteen, .106 percent for taxable

years beginning on or after January first, two thousand sixteen and

before January first, two thousand seventeen, .085 percent for taxable

years beginning on or after January first, two thousand seventeen and

before January first, two thousand eighteen; .056 percent for taxable

years beginning on or after January first, two thousand eighteen and

before January first, two thousand nineteen; .038 percent for taxable

years beginning on or after January first, two thousand nineteen and

before January first, two thousand twenty; .019 percent for taxable

years beginning on or after January first, two thousand twenty and

before January first, two thousand twenty-one; and zero percent for

years beginning on or after January first, two thousand twenty-one. (ii)

In no event shall the amount prescribed by this paragraph exceed three

hundred fifty thousand dollars for qualified New York manufacturers and

for all other taxpayers five million dollars.

(2) For purposes of subparagraph one of this paragraph, the term

"manufacturer" shall mean a taxpayer that during the taxable year is

principally engaged in the production of goods by manufacturing,

processing, assembling, refining, mining, extracting, farming,

agriculture, horticulture, floriculture, viticulture or commercial

fishing. Moreover, for purposes of computing the capital base in a

combined report, the combined group shall be considered a "manufacturer"

for purposes of this subparagraph only if the combined group during the

taxable year is principally engaged in the activities set forth in this

subparagraph, or any combination thereof. A taxpayer or, in the case of

a combined report, a combined group shall be "principally engaged" in

activities described above if, during the taxable year, more than fifty

percent of the gross receipts of the taxpayer or combined group,

respectively, are derived from receipts from the sale of goods produced

by such activities. In computing a combined group's gross receipts,

intercorporate receipts shall be eliminated. A "qualified New York

manufacturer" is a manufacturer that has property in New York that is

described in clause (A) of subparagraph (i) of paragraph (b) of

subdivision one of section two hundred ten-B of this article and either

(i) the adjusted basis of that property for New York state tax purposes

at the close of the taxable year is at least one million dollars or (ii)

all of its real and personal property is located in New York. In

addition, a "qualified New York manufacturer" means a taxpayer that is

defined as a qualified emerging technology company under paragraph (c)

of subdivision one of section thirty-one hundred two-e of the public

authorities law regardless of the ten million dollar limitation

expressed in subparagraph one of such paragraph. A taxpayer or, in the

case of a combined report, a combined group, that does not satisfy the

principally engaged test may be a qualified New York manufacturer if the

taxpayer or the combined group employs during the taxable year at least

two thousand five hundred employees in manufacturing in New York and the

taxpayer or the combined group has property in the state used in

manufacturing, the adjusted basis of which for New York state tax

purposes at the close of the taxable year is at least one hundred

million dollars.

(d) Fixed dollar minimum. (1) (A) The amount prescribed by this

paragraph for New York S corporations, other than New York S

corporations that are qualified New York manufacturers or qualified

emerging technology companies, will be determined in accordance with the

following table:

If New York receipts are: The fixed dollar minimum tax is:

not more than $100,000 $ 25

more than $100,000 but not over $250,000 $ 50

more than $250,000 but not over $500,000 $ 175

more than $500,000 but not over $1,000,000 $ 300

more than $1,000,000 but not over $5,000,000 $1,000

more than $5,000,000 but not over $25,000,000 $3,000

Over $25,000,000 $4,500

(B) Provided further, the amount prescribed by this paragraph for New

York S corporations that are qualified New York manufacturers, as

defined in subparagraph (vi) of paragraph (a) of this subdivision, and

for New York S corporations that are qualified emerging technology

companies under paragraph (c) of subdivision one of section thirty-one

hundred two-e of the public authorities law regardless of the ten

million dollar limitation expressed in subparagraph one of such

paragraph (c), will be determined in accordance with the following

tables.

For taxable years beginning on or after January 1, 2015 and before

January 1, 2016:

If New York receipts are: The fixed dollar minimum tax is:

not more than $100,000 $ 22

more than $100,000 but not over $250,000 $ 44

more than $250,000 but not over $500,000 $ 153

more than $500,000 but not over $1,000,000 $ 263

more than $1,000,000 but not over $5,000,000 $ 877

more than $5,000,000 but not over $25,000,000 $2,631

Over $25,000,000 $3,947

For taxable years beginning on or after January 1, 2016 and before

January 1, 2018:

If New York receipts are: The fixed dollar minimum tax is:

not more than $100,000 $ 21

more than $100,000 but not over $250,000 $ 42

more than $250,000 but not over $500,000 $ 148

more than $500,000 but not over $1,000,000 $ 254

more than $1,000,000 but not over $5,000,000 $ 846

more than $5,000,000 but not over $25,000,000 $2,538

Over $25,000,000 $3,807

For taxable years beginning on or after January 1, 2018:

If New York receipts are: The fixed dollar minimum tax is:

not more than $100,000 $ 19

more than $100,000 but not over $250,000 $ 38

more than $250,000 but not over $500,000 $ 131

more than $500,000 but not over $1,000,000 $ 225

more than $1,000,000 but not over $5,000,000 $ 750

more than $5,000,000 but not over $25,000,000 $2,250

Over $25,000,000 $3,375

(C) Provided further, the amount prescribed by this paragraph for a

qualified New York manufacturer, as defined in subparagraph (vi) of

paragraph (a) of this subdivision, and a qualified emerging technology

company under paragraph (c) of subdivision one of section thirty-one

hundred two-e of the public authorities law regardless of the ten

million dollar limitation expressed in subparagraph one of such

paragraph (c), that is not a New York S corporation, will be determined

in accordance with the following tables. However, with respect to

qualified New York manufacturers, the amounts in these tables will apply

in the case of a combined report only if the combined group satisfies

the requirements to be a qualified New York manufacturer as set forth in

such subparagraph (vi).

For tax years beginning on or after January 1, 2015 and before January

1, 2016:

If New York receipts are: The fixed dollar minimum tax is:

not more than $100,000 $ 22

more than $100,000 but not over $250,000 $ 66

more than $250,000 but not over $500,000 $ 153

more than $500,000 but not over $1,000,000 $ 439

more than $1,000,000 but not over $5,000,000 $1,316

more than $5,000,000 but not over $25,000,000 $3,070

Over $25,000,000 $4,385

For tax years beginning on or after January 1, 2016 and before January

1, 2018:

If New York receipts are: The fixed dollar minimum tax is:

not more than $100,000 $ 21

more than $100,000 but not over $250,000 $ 63

more than $250,000 but not over $500,000 $ 148

more than $500,000 but not over $1,000,000 $ 423

more than $1,000,000 but not over $5,000,000 $1,269

more than $5,000,000 but not over $25,000,000 $2,961

Over $25,000,000 $4,230

For tax years beginning on or after January 1, 2018:

If New York receipts are: The fixed dollar minimum tax is:

not more than $100,000 $ 19

more than $100,000 but not over $250,000 $ 56

more than $250,000 but not over $500,000 $ 131

more than $500,000 but not over $1,000,000 $ 375

more than $1,000,000 but not over $5,000,000 $1,125

more than $5,000,000 but not over $25,000,000 $2,625

Over $25,000,000 $3,750

(D) Otherwise, for all other taxpayers not covered by clauses (A),

(B), (C) and (D-1) of this subparagraph, the amount prescribed by this

paragraph will be determined in accordance with the following table:

If New York receipts are: The fixed dollar minimum tax is:

not more than $100,000 $ 25

more than $100,000 but not over $250,000 $ 75

more than $250,000 but not over $500,000 $ 175

more than $500,000 but not over $1,000,000 $ 500

more than $1,000,000 but not over $5,000,000 $1,500

more than $5,000,000 but not over $25,000,000 $3,500

more than $25,000,000 but not over $50,000,000 $5,000

more than $50,000,000 but not over $100,000,000 $10,000

more than $100,000,000 but not over $250,000,000 $20,000

more than $250,000,000 but not over $500,000,000 $50,000

more than $500,000,000 but not over $1,000,000,000 $100,000

Over $1,000,000,000 $200,000

(D-1) In the case of a REIT or a RIC that is not a captive REIT or

captive RIC, the amount prescribed by this paragraph will be determined

in accordance with the following table:

If New York receipts are: The fixed dollar minimum tax is:

not more than $100,000 $ 25

more than $100,000 but not over $250,000 $ 75

more than $250,000 but not over $500,000 $ 175

more than $500,000 $ 500

(E) For purposes of this paragraph, New York receipts are the receipts

included in the numerator of the apportionment factor determined under

section two hundred ten-A for the taxable year.

(2) If the taxable year is less than twelve months, the amount of New

York receipts is determined by dividing the amount of the receipts for

the taxable year by the number of months in the taxable year and

multiplying the result by twelve, and the amount prescribed by this

paragraph shall be reduced by twenty-five percent of the period for

which the taxpayer is subject to tax is more than six months but not

more than nine months and by fifty percent if the period for which the

taxpayer is subject to tax is not more than six months. In the case of a

termination year of a New York S corporation, the sum of the tax

computed under this paragraph for the S short year and for the C short

year shall not be less than the amount computed under this paragraph as

if the corporation were a New York C corporation for the entire taxable

year.

(f) For purposes of this section, the term "small business taxpayer"

shall mean a taxpayer (i) which has an entire net income of not more

than three hundred ninety thousand dollars for the taxable year; (ii)

the aggregate amount of money and other property received by the

corporation for stock, as a contribution to capital, and as paid-in

surplus, does not exceed one million dollars; (iii) which is not part of

an affiliated group, as defined in section 1504 of the internal revenue

code, unless such group, if it had filed a report under this article on

a combined basis, would have itself qualified as a "small business

taxpayer" pursuant to this subdivision; and (iv) which has an average

number of individuals, excluding general executive officers, employed

full-time in the state during the taxable year of one hundred or fewer.

If the taxable period to which subparagraph (i) of this paragraph

applies is less than twelve months, entire net income under such

subparagraph shall be placed on an annual basis by multiplying the

entire net income by twelve and dividing the result by the number of

months in the period. For purposes of subparagraph (ii) of this

paragraph, the amount taken into account with respect to any property

other than money shall be the amount equal to the adjusted basis to the

corporation of such property for determining gain, reduced by any

liability to which the property was subject or which was assumed by the

corporation. The determination under the preceding sentence shall be

made as of the time the property was received by the corporation. For

purposes of subparagraph (iv) of this paragraph, "average number of

individuals, excluding general executive officers, employed full-time"

shall be computed by ascertaining the number of such individuals

employed by the taxpayer on the thirty-first day of March, the thirtieth

day of June, the thirtieth day of September and the thirty-first day of

December during each taxable year or other applicable period, by adding

together the number of such individuals ascertained on each of such

dates and dividing the sum so obtained by the number of such dates

occurring within such taxable year or other applicable period. An

individual employed full-time means an employee in a job consisting of

at least thirty-five hours per week, or two or more employees who are in

jobs that together constitute the equivalent of a job at least

thirty-five hours per week (full-time equivalent). Full-time equivalent

employees in the state include all employees regularly connected with or

working out of an office or place of business of the taxpayer within the

state.

1-c. The computations specified in paragraph (b) of subdivision one of

this section shall not apply to the first two taxable years of a

taxpayer which, for one or both such years, is a small business taxpayer

as defined in paragraph (f) of subdivision one of this section.

2. The amount of investment capital and business capital shall each be

determined by taking the average value of the assets included therein

(less liabilities deductible therefrom pursuant to the provisions of

subdivisions five and seven of section two hundred eight), and, if the

period covered by the report is other than a period of twelve calendar

months, by multiplying such value by the number of calendar months or

major parts thereof included in such period, and dividing the product

thus obtained by twelve. For purposes of this subdivision, real property

and marketable securities shall be valued at fair market value and the

value of personal property other than marketable securities shall be the

value thereof shown on the books and records of the taxpayer in

accordance with generally accepted accounting principles.

3. A corporation that is a partner in a partnership shall compute tax

under this article using the aggregate method as defined in the

regulations of the commissioner, unless another method for computing

such tax is required or allowed by such regulations. Under the aggregate

method, a corporation that is a partner in a partnership is viewed as

having an undivided interest in the partnership's assets, liabilities,

and items of receipts, income, gain, loss and deduction. Under the

aggregate method, the corporation that is a partner in a partnership is

treated as participating in the partnership's transactions and

activities.