New York Revises Draft Tax Guidance for Out-of-State Cos.

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By John Herzfeld

Revisions were issued Feb. 16 to draft New York regulations that would provide guidance on the taxation of out-of-state corporations and corporate partnerships, the state Department of Taxation and Finance announced.

The draft regulations, first issued in September 2015 as part of an informal process preceding formal rulemaking, cover the economic nexus standards set in state budget legislation for the tax year beginning Jan. 1, 2015. Earlier revisions were made in January and June of 2016.

The revisions were made to specify that an out-of-state corporation engaged in activities that subject it to tax remains subject to tax even after it surrenders its authority to do business.

They also include an exception that corporate partners are subject to the corporate franchise tax unless already subject to tax under rules for transportation and insurance companies, and provide for a cross-reference of the definition of “credit cards” in the draft apportionment regulations.

In general, under the draft rules, the activities that will subject an out-of-state corporation or members of a unitary group to the corporate franchise tax have been expanded to include issuing credit cards in New York and deriving receipts from activity in New York when certain designated thresholds are met.

Comments on the latest revisions are due May 11.

To contact the reporter on this story: John Herzfeld in New York at

To contact the editor responsible for this story: Ryan C. Tuck at

For More Information

The revised draft rules are at

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