New York's Related Member Royalty Payment Legislation: The Old, the New, and What the Amendments Mean to You

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

Many states, including New York, have challenged tax strategies involving intangible holding companies by enacting “add back” statutes, adding back to income payments of royalties to affiliated holding companies. In this article, Richard W. Genetelli and David B. Zigman, of The Genetelli Consulting Group, discuss the new amendments to New York's add back statute. Of specific interest is New York's removal of a provision permitting taxpayers receiving royalty payments from a related member to exclude the income to the extent included in federal taxable income, and not excluded from add back by the related member payor.