New York Codes, Rules and Regulations
Title 20 - DEPARTMENT OF TAXATION AND FINANCE
Chapter I - Franchise and Certain Business Taxes
Subchapter A - Business Corporation Franchise Tax
Part 4 - APPORTIONMENT
Subpart 4-2 - SPECIFIC APPORTIONMENT RULES
Section 4-2.6 - Interest income and net gains from asset backed securities and other government agency debt

Universal Citation: 20 NY Comp Codes Rules and Regs § 4-2.6

Current through Register Vol. 47, No. 12, March 26, 2025

(Tax Law, section 210-A(5)(a)(2)(C))

(a)

(1) 8% of interest income from:
(i) asset backed securities or other securities issued by government agencies, including but not limited to securities issued by the Government National Mortgage Association, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or the Small Business Administration; or

(ii) asset backed securities issued by other entities, is included in New York receipts.

(2) 100% of all such interest income subject to paragraph 1 of this subdivision is included in everywhere receipts.

(b)

(1)
(i) 8% of net gains (not less than zero) from sales of:
(a) asset backed securities or other securities issued by government agencies; or

(b) asset backed securities that are sold through a registered securities broker or dealer or through a licensed exchange, is included in New York receipts.

(ii) 100% of all such net gains (not less than zero) subject to subparagraph (i) of this paragraph is included in everywhere receipts.

(2) The amount of net gains (not less than zero) from sales of asset backed securities not referenced in paragraph (1) of this subdivision included in New York receipts is the product of net gains from the sale of all such asset backed securities and a fraction, the numerator of which is gross proceeds from sales of such asset backed securities to purchasers located within New York State and the denominator of which is gross proceeds from sales of such asset backed securities to purchasers located within and without New York State. Net gains (not less than zero) from the sale of such asset backed securities is included in everywhere receipts.

(c)

(1) For each sale of an asset backed security, the corporation shall compute a gain or loss from the sale by subtracting its adjusted basis in such security from the sale price of such security. If the sale price exceeds the adjusted basis, the result is a gain. If the sale price is less than the adjusted basis, the result is a loss.

(2) To determine the amount of net gains from sales of the asset backed securities referenced in paragraph (1) of subdivision (b) of this section, the corporation shall subtract the sum of all losses from the sale of such asset backed securities from the sum of all gains from the sale of such asset backed securities. If the result is equal to or less than zero, no amount is included in New York receipts and everywhere receipts.

(3) To determine the amount of net gains from sales of the asset backed securities referenced in paragraph (2) of subdivision (b) of this section, the corporation shall subtract the sum of all losses from the sale of such asset backed securities from the sum of all gains from the sale of such asset backed securities. If the result is equal to or less than zero, no amount is included in New York receipts and everywhere receipts.

(d) If the purchaser is an individual, the individual is located in New York State if the corporation's records indicate the purchaser's billing address in the records of the corporation is in New York State. If the purchaser is a business entity, the business entity is located in New York State if its commercial domicile is in New York State.

(e) Gross proceeds shall be determined after the deduction of transactional costs incurred to acquire the asset backed security, but shall not be less than zero. The transactional costs incurred to acquire the asset backed security shall not include the corporation's adjusted basis.

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