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 4-2.7 - Interest income and net gains from corporate bonds

(1) 8% of net gains (not less than zero) from sales of corporate bonds sold through a registered securities broker or dealer or through a licensed exchange is included in New York receipts. 100% of all such net gains (not less than zero) is included in everywhere receipts.

(2) The amount of net gains (not less than zero) from sales of corporate bonds, other than bonds sold through a registered securities broker or dealer or through a licensed exchange, included in New York receipts is the product of net gains from the sale of all such bonds and a fraction, the numerator of which is gross proceeds from sales of such bonds to purchasers located within New York State and the denominator of which is gross proceeds from sales of such bonds to purchasers located within and without New York State. Net gains (not less than zero) from the sale of such bonds shall be included in everywhere receipts.

(1) For each sale of a bond, the corporation shall compute a gain or loss from the sale by subtracting the adjusted basis in such bond from the sale price of such bond. 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 corporate bonds sold through a registered securities broker or dealer or through a licensed exchange, the corporation shall subtract the sum of all losses from the sale of such bonds from the sum of all gains computed from the sale of such bonds. 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 corporate bonds, other than bonds sold through a registered securities broker or dealer or through a licensed exchange, the corporation shall subtract the sum of all losses from the sale of such bonds from the sum of all gains from the sale of such bonds. If the result is equal to or less than zero, no amount shall be included in New York receipts and everywhere receipts.

(4) If the purchaser is an individual, the individual is located in New York State if the individual'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.

(5) Gross proceeds shall be determined after the deduction of transactional costs incurred to acquire the corporate bond, but shall not be less than zero. The transactional costs incurred to acquire the corporate bond shall not include the corporation's adjusted basis in the bond.