instructions for form nyc-3l f i n a n c e new york ...ch. 62, pt. g3, sec. 6 of the laws of 2003....

Instructions for Form NYC-3L

GENERAL INFORMATION

S CORPORATIONSAn S Corporation is subject to the GeneralCorporation Tax and must file either FormNYC-4S or NYC-3L, whichever is applicable.See Finance Memorandum 99-3 for informa-tion regarding the treatment of qualified sub-chapter S subsidiaries.

CORPORATION DEFINEDUnincorporated entities electing to be treat-ed as associations taxable as corporations forfederal income tax purposes pursuant to the“check-the-box” rules under IRC §7701(a)(3)are treated as corporations for City tax pur-poses and are not subject to the Unincorpo-rated Business Tax. Eligible entities having asingle owner disregarded as a separate entityunder the “check-the-box” rules and treatedas either a sole proprietorship or a branch forfederal tax purposes will be similarly treatedfor City tax purposes. See Finance Memoran-dum 99-1 for additional information.

TRANSITIONAL PROVISIONSRELATING TO THE ENACTMENTOF THE GRAMM-LEACH-BLILEY ACTOF 1999:

Existing Corporations:Except for a banking corporation describedin paragraphs (1) through (8) of Ad. Codesection 11-640(a) (see, Form NYC-1,Instructions "Who Must File" items Athrough C), for taxable years beginningafter 1999 and before 2001, a corporationthat was in existence before January 1, 2000was taxable under the same tax (either NYCGeneral Corporation Tax (GCT) or NYCBanking Corporation Tax (BCT)) as appliedto it for its last taxable year beginningbefore January 1, 2000. For this purpose, acorporation was considered to have beensubject to a tax prior to 2000 if it was not ataxpayer but was properly included in acombined report filed by another corpora-tion under that tax. A corporation that wasin existence prior to 2000 but first became

subject to tax after 2000 is considered tohave been subject to whichever tax, GCT orBCT, would have applied based on its activi-ties had it been a taxpayer prior to 2000.

Ad. Code §11-640 was amended to similarlyrequire a corporation that was in existenceprior to January 1, 2001 to be taxed in yearsbeginning after 2000 and before 2003 underthe same tax, either GCT or BCT, thatapplied to it for the last year beginning before2001. Ch. 383, Laws of 2001, Part P, §8.

Ad. Code 11-640 was further amended torequire a corporation that was in existenceprior to January 1, 2003 to be taxed in yearsbeginning after 2002 and before 2004 underthe same tax, either GCT or BCT, thatapplied to it for the last year beginningbefore 2003. Ch. 62, Pt. G3, sec. 6 of theLaws of 2003. Ad. Code §11-640 again wasamended in 2004 to require a corporationthat was in existence prior to January 1,2004 to be taxed in years beginning after

F I N A N C ENEW YORK

General Corporation Tax Return For fiscal years beginning in 2006 or for calendar year 2006

For films and shows completed on or after January 1, 2005, eligible taxpayers are allowed a Made in NYC Film Production Credit equal to 5% of the qualified production costs paid or incurred in the production of qualified films and television shows. Use Form NYC-9.9 to claim the credit against the General Corporation Tax.

For tax years beginning after 2005, qualifying taxpayers that relocate to an industrial business zone (IBZ) to engage in industrial and manufacturing activities may be eligible for a one-time refundable credit equal to $1,000 for each full-time employee at eligible premises in the IBZ, with certain limits. Use Form NYC-9.6 to claim the credit against the General Corporation Tax.

For tax years beginning on or after January 1, 2004, in determining entire net income (“ENI”) of taxpayers, other than eligible farmers (for purposes of the New York State farmers' school tax credit), the amount allowed as a deduction with respect to a sport utility vehicle that is not a passenger automobile for purposes of section 280F(d)(5) of the Internal Revenue Code is limited to the amount allowed under section 280F as if the vehicle were a passenger automobile as defined in that section. For SUVs that are qualified property, other than qualified Resurgence Zone property and other than New York Liberty Zone property, the amount allowed as a deduction is calculated as of the date the SUV was actually placed in service and not as of September 10, 2001. See, Finance Memorandum 06-1 dated October 12, 2006 “Application of IRC Section 280F Limits to Sports Utility Vehicles” for more information.The Relocation Employment Assistance Program (REAP) has been reinstated and a program granting similar benefits to businesses that relocate to lower Manhattan (LMREAP) has been enacted. Both the reinstatement of the REAP program and the enactment of the LMREAP program are effective as of July 1, 2003. See Administrative Code sections 11-604.17 and 11-604.19.

Related members income and expense modifications—For tax years beginning on or after January 1, 2003, taxpayers may be required to add back to ENI certain payments for the use of intangible property, such as trademarks or patents, made during the tax year to related member(s) to the extent such payments were deducted in computing federal taxable income. Where the related member is a New York City taxpayer, the related member must subtract from ENI those payments received during the tax year to the extent the payments were included in federal taxable income and were required to be added back to the ENI of a related taxpayer. See Chapter 686 of the Laws of 2003, Part M.

Effective for tax periods beginning on and after August 1, 2002, entities that receive eighty percent or more of their gross receipts from charges for the provision of mobile telecommunications services to customers will be taxed as if they were regulated utilities for purposes of the New York City Utility Tax, General Corporation Tax, Banking Corporation Tax and Unincorporated Business Tax. Thus, such entities will be subject to only the New York City Utility Tax. The amount of gross income subject to tax has been amended to conform to the Federal Mobile Telecommunications Sourcing Act of 2000. In addition, if any such entity is a partnership, its partners will not be subject to the New York City Utility Tax on their distributive share of the income of any such entity. Finally, for tax years beginning on and after August 1, 2002, partners in any such entity will not be taxed on their distributive share of the income of any such entity. Chapter 93, Part C, of the Laws of New York, 2002.Effective for tax years ending after September 10, 2001, for purposes of the New York City Unincorporated Business Tax, General Corpo- ration Tax and Banking Corporation Tax, the City has "decoupled" from the Federal bonus depreciation deductions allowed under the Job Creation and Worker Assistance Act of 2002 and the Jobs and Growth Tax Relief Reconciliation Act of 2003, except with respect to the depreciation deductions allowed with respect to "qualified New York liberty zone property", "qualified New York liberty zone leasehold improvements" and "qualified property" placed in service in the Resurgence Zone (generally the area in the borough of Manhattan South of Houston Street and North of Canal Street.) For City tax purposes, depreciation deductions for all other "qualified property" must be calculated as if the property was placed in service prior to September 11, 2001. See, Finance Memorandum 02-3 (Revised) "New York City Tax Consequences of Certain Retroactive Federal and New York Tax Law Changes" and Form NYC-399Z for more information.

Highlights of Recent Tax Law Changes for Corporations

2003 and before 2006 under the tax, either GCT or BCT, that applied to it for the last year beginning before 2004. Ch. 60, Pt.G, §6 of the Laws of 2004.

Newly-formed Corporations:

A corporation formed on or after January 1, 2000, and before January 1, 2001, was permitted to elect to be subject to either the GCT or BCT for its first taxable year beginning after 1999 and before 2001 provided either:

the corporation was a financial subsidiary, or

at least 65% of the corporation's voting stock is owned or controlled, directly or indirectly, by a financial holding company, and the corporation is principally engaged in activities described in sections 4(k) 4 or 4(k)5 of the Bank Hold- ing Company Act of 1956, as amended, or described in regulations promulgat- ed under that section.

A financial subsidiary is a corporation whose voting stock is 65% or more owned or controlled directly or indirectly, by a banking corporation (including a corporation that has elected to be subject to the BCT under these transition rules) described in paragraphs (1) through (3) of Ad. Code section 11-640(a) and described in 12 USCS section 24a or section 46 of the Federal Deposit Insurance Act.

A financial holding company is a corporation that has filed with the Federal Reserve Board a written declaration of its election to be a financial holding company under section 4(i) of the Bank Holding Company Act of 1956, as amended, provided the Federal Reserve Board has not found that election to be ineffective.

An election by a newly-formed corporation under this provision must have been made on or before the due date for filing its return for the applicable year, including extensions, and was made by filing the return required under the appropriate tax. The election is irrevocable.

Ad. Code §11-640(h) permits a qualifying corporation formed on or after January 1, 2001 and before January 1, 2003 to make a comparable election for its first tax year beginning after 2000 and before 2003.

Similarly, Ad. Code §11-640(i) permits a qualifying corporation formed on or after Jan- uary 1, 2003 and before January 1, 2004 to make a comparable election for its first tax year beginning after 2002 and before 2004. Ch. 62, Pt. G3, sec. 6 of the Laws of 2003.

Ad. Code §11-640(j) similarly permits a qualifying corporation formed on or after January 1, 2004 and before January 1, 2006 to make a comparable election for its first taxable year beginning after 2003 and before

2006. Ch. 60, Pt. G, §6 of the Laws of 2004.

Combined Filing under Transitional Provisions

A bank holding company doing business in the City that, during a taxable year beginning after 1999 and before 2008, registers for the first time as a bank holding company under the Bank Holding Company Act of 1956, as amended, and elects to be a financial holding company, may file a combined report under the BCT for such year with one or more banking corporations doing business in the City and 65% or more owned or controlled, directly or indirectly, by that bank holding company without seeking permission from the Commissioner. In addition, such bank holding company may, without seeking the Commissioner's permission: (i) include in a combined report filed for a subsequent year beginning after 1999 and before 2008 any eligible banking corporation that, for the first time in such subsequent year, either is doing business in the City or meets the above ownership requirements; and (ii) eliminate from a combined report filed in any such subsequent year any corporation no longer meeting the requirements for combination in such subsequent year. Except as provided above, the permission of the Commissioner is required for any such bank holding company to cease to file on a combined basis, elect to file on a combined basis or make any changes to the composition of the group of corporations filing on a combined basis for any subsequent year. Ad Code §11-646(f)(2)(iv).

CORPORATIONS REQUIRED TO FILEFORM NYC-3LA corporation (as defined in Section 11-602.1 of the New York City AdministrativeCode) doing business, employing capital, orowning or leasing property in a corporate ororganized capacity, or maintaining an officein New York City must file Form NYC-3Land cannot use Form NYC-4S if:1) it carries on business both inside and

outside New York City;2) it has subsidiary and/or investment

capital;3) it claims an optional deduction for

expenditures relating to air pollutioncontrol facilities, as provided in Section11-602.8(g) of the NYC Admin. Code;

4) it claims a modification with respect togain arising from the sale of certainproperty, as provided in Section 11-602.8(h) of the NYC Admin. Code;

5) it is a real estate investment trust quali-fied under Sections 856 and 857 of theInternal Revenue Code (see section 11-603.7 of the NYC Admin. Code);

6) it entered into a “safe harbor” leasetransaction under provisions of theInternal Revenue Code as it was ineffect for agreements entered into priorto January 1, 1994;

7) it claims a credit for sales and compen-sating use taxes paid in the currentyear or is required to adjust its currentGeneral Corporation Tax as a result ofcredits claimed in prior years. See theinstructions to Form NYC-9.5 and theinstructions for Schedule B, lines 6aand 14 for more information.

8) it claims a credit for increased realestate tax payments made to a landlordin connection with the relocation ofemployment opportunities to New YorkCity, as provided in Section 11-604.13 ofthe NYC Admin. Code;

9) it claims a credit for certain costs orexpenses incurred in relocating to New YorkCity, as provided in Sections 11-604.14,11-604.17, 11-604.17-b or 11-604.19 of the NYC Admin. Code. See Instr. to FormsNYC-9.5, NYC-9.6 and NYC-9.8;

10) it claims a modification with respect towages and salaries disallowed as adeduction for federal income tax pur-poses (work incentive/jobs credit pro-visions), as provided in Section 11-602.8(a)(7) of the NYC Admin. Code;

11) either separately or as a member of apartnership, it is engaged in an insur-ance business as a member of the NewYork Insurance Exchange;

12) it is a Regulated Investment Companyas defined in Section 851 of the InternalRevenue Code (see section 11-603.7 ofthe NYC Admin. Code);

13) it is a Domestic International Sales Cor-poration (DISC) or a Foreign Sales Cor-poration;

14) it claims a credit for New York CityUnincorporated Business Tax paid by apartnership in which it is a partner asprovided in Section 11-604.18 of theNYC Admin. Code;

15) it will be included in a combined report(Form NYC-3A);

16) it is required by Ad. Code section 1-602.8(n) either to add back paymentsfor the use of intangibles made to relat-ed members or subtract such paymentsfrom related members. See "Highlightsof Recent Tax Law Changes for Corpo-rations;" or

17) It claims a credit for certain costsincurred in the production of qualifiedfilms and television shows, as providedin Section 11-604.20 of the NYC Admin-istrative Code.

The following are NOT required to file aGeneral Corporation Tax Return:a) A dormant corporation that did not at

any time during its taxable year engagein any activity or hold title to real prop-erty located in New York City.

b) A nonstock corporation organized andoperated exclusively for nonprofit purpos-es and not engaged in substantial com-

Instructions for Form NYC-3L - 2006

Code 11-640 was also amended in 2006 to require a corporation that was in existence prior to January 1, 2006 to be taxed in years beginning after 2005 and before 2008 under the tax, either the GCT or the BCT that applied to it for the last year beginning before 2006. Ad. Code § 11-640(k), as added by Ch. 62, Pt.I, of the Laws of 2006.

Also, new Ad. Code § 11-640(k) permits a qualifying corporation formed on or after January 1, 2006 and before January 1, 2008 to make a comparable election for its first taxable year beginning after 2005 and before 2008. Ad. Code § 11-640(k), as added by Ch. 62, Pt.I, of the Laws of 2006.

mercial activities that has been granted anexemption by the Department of Finance.

c) Corporations subject to taxation underPart 4 of Subchapter 3 of Chapter 6,Title 11 (Banking Corporations) orunder Chapter 11, Title 11 (Utility Cor-porations) of the NYC Admin. Code arenot required to file General CorporationTax returns. However, corporations thatare subject to tax under Chapter 11 asvendors of utility services are subject tothe General Corporation Tax in accor-dance with section 11-603.4 of the NYCAdmin. Code and must file a return.

d) A limited profit housing corporationorganized and operating pursuant tothe provisions of Article Two of the Pri-vate Housing Finance Law.

e) Insurance corporations.f) A Housing Development Fund Company

(HDFC) organized and operating pur-suant to the provisions of Article Elevenof the Private Housing Finance Law.

g) Organizations organized exclusively forthe purpose of holding title to propertyas described in Sections 501(c)(2) or(25) of the Internal Revenue Code.

h) An entity treated as a Real Estate Mort-gage Investment Conduit (REMIC) forfederal income tax purposes. (Holders ofinterests in a REMIC remain taxable onsuch interests or on the income thereon.)

i) Corporations principally engaged in theconduct of a ferry business and operatingbetween any of the boroughs of the Cityunder a lease granted by the City.

j) A corporation principally engaged in theconduct of an aviation, steamboat, ferryor navigation business, or two or moresuch businesses, provided that all of thecapital stock of the corporation is ownedby a municipal corporation of New York.

k) Bank holding corporations filing on acombined basis in accordance with Sec-tion 11-646(f) of the NYC Admin. Code.

l) Corporations principally engaged in theoperation of marine vessels whoseactivities in the City are limited exclu-sively to the use of property in inter-state or foreign commerce.

m) Foreign corporations that are exemptunder the provisions of Public Law 86-272. See 19 RCNY Section 11-04 (b)(11).

n) For taxable years beginning on or afterJanuary 1, 1998, an alien corporation ifits activities in the City are limited sole-ly to investing or trading in stocks andsecurities for its own account withinthe meaning of IRC §864(b)(2)(A)(ii)or investing or trading in commoditiesfor its own account within the meaningof IRC §864(b)(2)(B)(ii) or any combi-nation of these activities. NYC Admin.Code §11-603.2-a.

NOTE: A corporation that has an officer,employee, agent or representative in the City

and that is not subject to the General Corpo-ration Tax is not required to file a Form NYC-3L or NYC-4S but must file a Form NYC - 245(Section 11-605 of the NYC Admin. Code).

WHEN AND WHERE TO FILEThe due date for filing is on or beforeMarch 15, 2007, or, for fiscal year taxpayers,on or before the 15th day of the 3rd monthfollowing the close of the fiscal year.

Special short-period returns: If this isNOT a final return and your Federal returncovered a period of less than 12 months as aresult of your joining or leaving a Federalconsolidated group or as a result of a FederalIRC §338 election, this return generally willbe due on the due date for the Federal returnand not on the date noted above. Check thebox on the front of the return.

Returns with remittances:NYC Department of FinanceP.O. Box 5040Kingston, NY 12402-5040

Returns claiming refunds:NYC Department of FinanceP.O. Box 5050Kingston, NY 12402-5050

All others:NYC Department of FinanceP.O. Box 5060Kingston, NY 12402-5060

AUTOMATIC EXTENSIONSAn automatic extension of six months for fil-ing this return will be allowed if, by the origi-nal due date, the taxpayer files with theDepartment of Finance an application for auto-matic extension on Form NYC-6 and pays theamount properly estimated as its tax. See theinstructions for Form NYC-6 for informationregarding what constitutes a proper estimatedtax for this purpose. Failure to pay a properestimated amount will result in a denial of theextension. A taxpayer with a valid six-monthautomatic extension filed on Form NYC-6 mayrequest up to two additional three-monthextensions by filing Form NYC-6.1. A sepa-rate Form NYC-6.1 must be filed for eachadditional three-month extension.

Mail Forms NYC-6 and 6.1 to the addressindicated on those forms.

FINAL RETURNSIf a corporation ceases to do business inNew York City, the due date for filing a finalGeneral Corporation Tax Return is the 15thday after the due date of the cessation (Sec-tion 11-605 of the NYC Admin. Code). Cor-porations may apply for an automatic six-month extension for filing a final return byfiling Form NYC-6F, Application for Exten-sion to File Final Return. Any tax due mustbe paid with the final return or the exten-sion, whichever is filed earlier.

ACCESSING NYC TAX FORMSBy Computer - Download forms from theFinance website at nyc.gov/financeBy Fax - For fax copies call 212-504-4038from the phone connected to your faxmachine or modem.By Phone - Order forms through Finance’sform ordering service, by calling 212-504-4035, and receive forms in the mail.

OTHER FORMS YOU MAY BEREQUIRED TO FILE

FORM NYC-6 OR NYC-6F - Application forAutomatic Extension for General Corpora-tion Tax is an application for a six-monthextension of time to file a tax return. File iton or before the due date of the return. Ifthe corporation ceased to be subject to taxduring 2006, use Form NYC-6F to requestan extension to file a final return.

FORM NYC-6.1 - Application for AdditionalExtension for General Corporation Tax is arequest for an additional three months oftime to file a return. A corporation with avalid six-month extension is limited to twoadditional extensions.

FORM NYC-8 - General Corporation TaxClaim for Credit or Refund is used to claima refund of General Corporation Tax.Please note that it no longer can be used tofile an amended return.

FORM NYC-222 - Underpayment of Esti-mated Tax by Corporations will help a cor-poration determine if it has underpaid anestimated tax installment and, if necessary,compute the penalty due.

FORM NYC-245 - Activities Report of Cor-porations must be filed by a corporation thathas an officer, employee, agent or represen-tative in the City but disclaims liability forthe General Corporation Tax.

FORM NYC-399 - Schedule of New YorkCity Depreciation Adjustments is used tocompute the allowable New York Citydepreciation deduction if a federal ACRS orMACRS depreciation deduction is claimedfor certain property placed in service afterDecember 31, 1980.

FORM NYC-399Z - Depreciation Adjust-ments for Certain Post 9/10/01 Propertymay have to be filed by taxpayers claimingdepreciation deductions for certain sportutility vehicles or "qualified property," otherthan "qualified New York Liberty Zoneproperty" and "qualified New York LibertyZone leasehold improvements" placed inservice after September 10, 2001 for Federalor New York State tax purposes. See,Finance Memorandum 06-1 dated October12, 2006 “Application of IRC §280FLimits to Sports Utility Vehicles” andFinance Memorandum 02-3 (Revised)


"New York City Tax Consequences of Cer-tain Retroactive Federal and New York TaxLaw Changes".

FORM NYC-400 - Declaration of EstimatedTax by General Corporations must be filedby any corporation whose New York Citytax liability can reasonably be expected toexceed $1,000 for the 2007 calendar year orfiscal year beginning in 2007.

FORM NYC-3360 - General Corporation TaxReport of Change in Tax base made by theInternal Revenue Service and/or New YorkState Department of Taxation and Financeis used for reporting adjustments in taxableincome or other basis of tax resulting froman audit of your federal corporate tax returnand/or State audit of your State corporatetax return.

FORM NYC-CR-A - Commercial Rent TaxAnnual Return must be filed by every tenantthat rents premises for business purposesin Manhattan south of the center line of96th Street and whose annual or annualizedgross rent for any premises is at least$200,000. (Effective June 1, 2001.)

FORM NYC-RPT - Real Property TransferTax Return must be filed when the corpora-tion acquires or disposes of an interest inreal property, including a leasehold interest;when there is a partial or complete liquida-tion of the corporation that owns or leasesreal property; or when there is a transfer ofa controlling economic interest in a corpora-tion, partnership or trust that owns or leas-es real property.

ESTIMATED TAXIf the tax for the period following that cov-ered by this return is expected to exceed$1,000, a declaration of estimated tax andinstallment payments are required. FormNYC-400 is to be used for this purpose. Ifthe tax on this return exceeds $1,000, FormNYC-400 will automatically be mailed toyou.

If, after filing a declaration, your estimatedtax substantially increases or decreases as aresult of a change in income, deduction orallocation, you must amend your declara-tion on or before the next date for an install-ment payment. The procedure is as follows:

Complete the amended schedule of thenotice of estimated tax due. (This isyour quarterly notice for payment ofestimated tax.)Mail the bottom portion of the noticealong with your check to:

NYC Department of Finance P.O. Box 5100Kingston, NY 12402-5100

If the amendment is made after the 15th day ofthe 9th month of the taxable year, any increasein tax must be paid with the amendment.

For more information regarding estimated taxpayments and due dates, see Form NYC-400.

PENALTY FOR UNDERSTATING TAXIf there is a substantial understatement oftax (i.e., if the amount of the understate-ment exceeds the greater of 10% of the taxrequired to be shown on the return or$5,000) for any taxable year, a penalty willbe imposed equal to 10% of the amount ofthe understated tax.

The amount on which you pay the penaltycan be reduced by subtracting any item forwhich (1) there is or was substantial author-ity for the way in which the item was treatedon the return, or (2) there is adequate dis-closure of the relevant facts affecting theitem’s tax treatment on the return or in astatement attached to the return.

CHANGE OF BUSINESSINFORMATIONIf there have been any changes in your busi-ness name, identification number, billing ormailing address or telephone number, com-plete Form DOF-1, Change of BusinessInformation. You can obtain this form bycalling Taxpayer Assistance at (212) 504-4036. You can also visit our Internet web-site at http://nyc.gov/finance.

FOREIGN AIRLINESRetroactive to tax years beginning on orafter January 1, 1989, foreign airlines thathave a foreign air carrier permit pursuant toSection 402 of the Federal Aviation Act of1958 are permitted to exclude from entirenet income the following items:

all income from the international opera-tion of aircraft, even though effectivelyconnected with the conduct of a tradeor business in the United States

income from outside the United Statesthat is derived from the operation of air-craft

certain passive income derived fromsources outside the United States

The above exclusions are permitted provid-ed that the foreign country in which the air-line is based and organized grants a similaror greater exemption from tax with respectto United States airlines. For more informa-tion, see Admin. Code Section 11-602.8 (c-1).

For taxable years beginning on or after Jan-uary 1, 1994, property, receipts and wages,salaries or other personal service compen-sation directly attributable to the generationof income described above not included inentire net income under Admin. Code Sec-tion 11-602.8 (c-1) are excluded when calcu-lating the business allocation percentage.See Admin. Code Section 11-604.3 (a) (6).

Also for taxable years beginning on or afterJanuary 1, 1994, in calculating the tax on busi-ness and investment capital of foreign air-lines, assets (and the liabilities directly orindirectly attributable to those assets)employed in generating the income excludedfrom entire net income are excluded. (SeeAdmin. Code Sections 11-602.4 and 11-602.6.)

WIRELESS TELECOMMUNICATIONSSERVICE PROVIDERSEffective for tax periods beginning on andafter August 1, 2002, entities who receiveeighty percent or more of their grossreceipts from charges for the provision ofmobile telecommunications services to cus-tomers will be taxed as if they were regulat-ed utilities for purposes of the New YorkCity Utility Tax and General CorporationTax. Thus, such entities will be subject toonly the New York City Utility Tax. Theamount of gross income subject to tax hasbeen amended to conform to the FederalMobile Telecommunications Sourcing Actof 2000. In addition, for tax years beginningon and after August 1, 2002, partners in anysuch entity will not be subject to GeneralCorporation Tax on their distributive shareof the income of any such entity.

SIGNATUREThis report must be signed by an officerauthorized to certify that the statements con-tained herein are true. If the taxpayer is apublicly-traded partnership or another unin-corporated entity taxed as a corporation, thisreturn must be signed by a person dulyauthorized to act on behalf of the taxpayer.

TAX PREPARERSAnyone who prepares a return for a fee mustsign the return as a paid preparer and enterhis or her Social Security Number or PTIN.See Finance Memorandum 00-1. Include thecompany or corporation name and EmployerIdentification Number, if applicable.

Preparer Authorization: If you want toallow the Department of Finance to discussyour return with the paid preparer whosigned it, you must check the "yes" box in thesignature area of the return. This authoriza-tion applies only to the individual whose sig-nature appears in the "Preparer's Use Only"section of your return. It does not apply tothe firm, if any, shown in that section. Bychecking the "Yes" box, you are authorizingthe Department of Finance to call the prepar-er to answer any questions that may ariseduring the processing of your return. Also,you are authorizing the preparer to:

Give the Department any informationmissing from your return,Call the Department for informationabout the processing of your return orthe status of your refund or payment(s),and


Respond to certain notices that you haveshared with the preparer about matherrors, offsets, and return preparation. Thenotices will not be sent to the preparer.

You are not authorizing the preparer toreceive any refund check, bind you to any-thing (including any additional tax liability),or otherwise represent you before theDepartment. The authorization cannot berevoked, however, the authorization will auto-matically expire no later than the due date(without regard to any extensions) for filingnext year's return. Failure to check thebox will be deemed a denial of authority.

SPECIFIC INSTRUCTIONS

Check the box marked "yes" on page 1 ofthis form if, on your federal return: (i) youreported bonus depreciation and/or a firstyear expense deduction under IRC §179 for"qualified New York Liberty Zone property,""qualified New York Liberty Zone leaseholdimprovements," or "qualified ResurgenceZone property," regardless of whether youare required to file form NYC-399Z, (ii) youclaimed a federal targeted jobs credit for Lib-erty Zone business employees, or (iii) youreplaced property involuntarily converted asa result of the attacks on the World TradeCenter during the five (5) year extendedreplacement period. You must attach Feder-al forms 4562, 4684, 4797 and 8884 to thisreturn. See instructions for Schedule B,lines 6d, 15, and 16 for more information.

SCHEDULE AComputation of Tax

LINES 2a AND 2b - TAX ON ALLOCATED CAPITALFor cooperative housing corporations asdefined in the Internal Revenue Code, therate of tax on capital is 4/10 mill (.04%)instead of 1 1/2 mills (.15%). For all othercorporations subject to tax, including hous-ing companies organized and operating pur-suant to Article Four of the Private HousingFinance Law (other than cooperative hous-ing corporations), the rate of tax on capitalis 1 1/2 mills (.15%).

Enter the amount from Schedule E, line 14in the left-hand column of line 2a or line 2b.Multiply by the applicable percentage andenter the tax in the right-hand column. Ifthat amount exceeds $350,000, enter$350,000. See instructions for ScheduleE, lines 7-11 for information on how to cal-culate capital for short tax years.

LINE 3 - ALTERNATIVE TAXEvery taxpayer, other than a real estateinvestment trust or regulated investmentcompany, must calculate its alternative taxand enter its computation on line 3. To com-pute the alternative tax, measured by entire

net income plus compensation, you may usethe worksheet on page 6 of Form NYC-3L.Professional corporations must calculate thealternative tax.Additional Information for Computingthe Alternative Tax

ALTERNATIVE TAX WORKSHEET a) Line 2 - Salaries. For taxable years begin-

ning on or after 7/1/99 no portion of offi-cers salaries and other compensation isincluded in the alternative tax base.Notwithstanding the foregoing, include inthe alternative tax computation 100%of all salaries and compensation ofstockholders owning more than 5% ofthe corporation’s stock, as deductedfor federal tax purposes and reportedon Schedule F, regardless of whethersuch stockholders are also officers. Indetermining whether a stockholder ownsmore than 5% of the issued capital stock,include all classes of voting and nonvotingstock, issued and outstanding.

b) Line 3 - Enter on line 3 the sum of line 1and line 2.

c) Line 4 - For taxable years beginning onor after 7/1/98, enter $40,000. If thereturn does not cover an entire year,the exclusion must be prorated basedon period covered by the return.

LINE 5 - ALLOCATED SUBSIDIARYCAPITALEnter the amount from Schedule C, line 2,Column G. If that amount is less than zero,enter "0".

LINE 7 - UBT PAID CREDITEnter on line 7 the credit against the Gener-al Corporation Tax for Unincorporated Busi-ness Tax paid by partnerships from whichyou receive a distributive share or guaran-teed payment that you include in calculatingGeneral Corporation Tax liability on eitherthe entire net income or income plus com-pensation base. (Attach Form NYC-9.7.)

LINE 8a - CREDITS FROMFORM NYC-9.5Enter on this line the following creditsagainst the General Corporation Tax:1) Relocation and employment assistance

program (REAP) credit (Attach FormNYC-9.5.)

2) Sales and compensating use taxes(Refer to instructions on Form NYC-9.5and attach form.)

NOTE: This credit may only be taken forsales tax paid in the current year for cer-tain purchases in certain prior periods.

LINE 8b – CREDITS FROMFORM NYC-9.8Enter on this line the credit against the Gen-eral Corporation Tax for the new LowerManhattan relocation and employment assis-

tance program. (Attach Form NYC-9.8.)

LINE 9a - CREDITS FROMFORM NYC-9.6Real estate tax escalation credit, employment opportunity relocation costs credit, and Industrial Business Zone credit (Refer to instructions on Form NYC-9.6 and attach form.)

LINE 9b – CREDITS FROMFORM NYC-9.9Enter on this line the NYC film productioncredit. (Attach Form NYC-9.9.)

LINE 11b - FIRST INSTALLMENTPAYMENTDo not use this line if an application for auto-matic extension, Form NYC-6, has been filed.The payment of the amount shown at line 11bis required as payment on account of estimat-ed tax for the 2007 calendar year, if a calen-dar year taxpayer, or for the taxable yearbeginning in 2007, if a fiscal year taxpayer.

LINE 12 - SALES TAX ADDBACKThis line relates to the General CorporationTax credit for sales and compensating usetaxes paid on certain machinery and equip-ment and/or certain services. If the taxpay-er received a credit or refund of any suchsales or compensating use taxes during theyear covered by this return for which itclaimed a General Corporation Tax credit ina prior tax period, the amount of such creditor refund must be added back at line 12. Acorresponding adjustment is to be made atline 14 on Schedule B. (Refer to instructionsto line 14 on Schedule B.)

LINE 14 - PREPAYMENTSEnter the sum of all estimated tax paymentsmade for this tax period, the payment madewith the extension request, if any, and boththe carryover credit and the first installmentreported on the prior tax period’s return.This figure should be obtained from theComposition of Prepayments Schedule onpage 6 of Form NYC-3L.

LINE 17a - LATE PAYMENT - INTERESTIf the tax is not paid on or before the duedate (determined without regard to anyextension of time), interest must be paid onthe amount of the underpayment from thedue date to the date paid. For informationas to the applicable rate of interest, call:(212) 504-4036.

LINE 17b - LATE PAYMENT OR LATEFILING/ADDITIONAL CHARGESa) A late filing penalty is assessed if you

fail to file this form when due, unlessthe failure is due to reasonable cause.For every month or partial month thatthis form is late, add to the tax (lessany payments made on or before thedue date) 5%, up to a total of 25%.

b) If this form is filed more than 60 days


late, the above late filing penalty cannotbe less than the lesser of (1) $100 or(2) 100% of the amount required to beshown on the form (less any paymentsmade by the due date or creditsclaimed on the return).

c) A late payment penalty is assessed ifyou fail to pay the tax shown on thisform by the prescribed filing date,unless the failure is due to reasonablecause. For every month or partialmonth that your payment is late, add tothe tax (less any payments made)1/2%, up to a total of 25%.

d) The total of the additional charges in a)and c) may not exceed 5% for any onemonth except as provided for in b).

If you claim not to be liable for these addi-tional charges, attach a statement to yourreturn explaining the delay in filing, pay-ment or both.

LINE 17c - PENALTY FOR UNDER-PAYMENT OF ESTIMATED TAXA penalty is imposed for failure to file a dec-laration of estimated tax or for failure to payeach installment payment of estimated taxdue. (For complete details, refer to FormNYC-222, Underpayment of Estimated Tax byCorporations.) If you underpaid your esti-mated tax, use Form NYC-222 to computethe penalty. Attach Form NYC-222. If nopenalty is due, enter “0” on line 17c.

LINE 21 - TOTAL REMITTANCEIf the amount on line 15 is greater than zeroor the amount on line 19 is less than zero,enter on line 21 the sum of line 15 and theamount, if any, by which line 18 exceeds theamount on line 16. After completing thisreturn, enter the amount of your remittanceon line A. This must be the full amount asshown on line 21. All remittances must bepayable in U.S. dollars drawn on a U.S.bank. Checks drawn on foreign banks willbe rejected and returned. Remittancesmust be made payable to the order of NYCDepartment of Finance.

LINE 22 - NEW YORK CITY RENTIf the corporation is carrying on businessboth inside and outside New York City, com-plete Schedule G and enter on line 22 ofSchedule A total rent from Schedule G, part1. If the corporation is only carrying on busi-ness in New York City, enter the total rentdeducted on the federal return for premiseslocated in the City. Rent includes considera-tion paid for the use or occupancy of premis-es as well as payments made to or on behalfof a landlord for taxes, charges, insurance orother expenses normally payable by the land-lord other than for the improvement, repairor maintenance of the tenant’s premises.

SCHEDULE BComputation and Allocation of Entire NetIncome

LINE 1 - FEDERAL TAXABLEINCOMEEnter your federal taxable income (beforenet operating loss and special deductions)as required to be reported on your federaltax return.If you file federal Form 1120, use theamount from line 28.If you file federal Form 1120-A, use theamount from line 24.If you file federal Form 1120-RIC, seeAdmin. Code section 11-603.8.If you file federal Form 1120-REIT, seeAdmin. Code section 11-603.7.

S Corporations and qualified subchap-ter S subsidiaries (QSSS) must filereturns as ordinary corporations. Ifyou are an S corporation filing on Form1120S or a QSSS, you must report online 1 the amount you would have hadto report as taxable income were younot a federal S corporation or QSSS. Enter at Schedule B, line 1, the total amountof income reported on lines 1 through 10 ofthe federal form 1120S, Schedule K, less thetotal amount of deductions reported on lines11 through 12d of that Schedule. In addi-tion, include other items and amounts thatare required to be reported separately toshareholders and not numerically includedon federal Schedule K, but attached in aseparate schedule.

NOTE: The charitable contributiondeduction from federal Form 1120S, Sched-ule K, line 12a may not exceed 10% of thesum of lines 1 through 12d (other than line12a) of Schedule K.

LINE 2 - NONTAXABLE INTERESTInclude all interest received or accruedwhich was not taxable on your federalincome tax return.

LINES 3 AND 4 -SUBSIDIARY CAPITALA subsidiary is a corporation which is con-trolled by the taxpayer by reason of the tax-payer’s ownership of more than 50% of thetotal number of shares of the corporation’svoting capital stock, issued and outstanding.The term “subsidiary capital” means allinvestments in the stock of subsidiary cor-porations, plus all indebtedness from sub-sidiary corporations (other than accountsreceivable acquired in the ordinary courseof business for services rendered or fromsales of property held primarily for sale tocustomers), whether or not evidenced bybonds or other written instruments, onwhich interest is not claimed and deductedby the subsidiary for purposes of taxation

under Title 11, Chapter 6, Subchapters 2and 3 of the Admin. Code.

If you have a subsidiary, complete lines 3and 4, and attach a list of all items included.You will also have to complete Schedule C.If you do not have a subsidiary, enter “0” onlines 3 and 4.

On line 3, enter total of amounts, includinginterest expense, deducted in computingfederal taxable income that are directlyattributable to subsidiary capital or toincome, gains or losses from subsidiary cap-ital. Include capital losses from sales orexchanges of subsidiary capital, all otherlosses, bad debts and any carrying chargesattributable to subsidiary capital.

On line 4, enter all amounts, including inter-est, that are indirectly attributable to sub-sidiary capital or to income, gains or lossesfrom subsidiary capital.

For more information, see also Statement of Audit Procedure 96-1-GCT, Noninterest Ex-pense Attribution, January 29, 1996, available on the Department's website (nyc.gov/finance).

LINE 5 - STATE AND LOCAL INCOMETAXESOn line 5a enter the amount deducted onyour federal return for income taxes paid oraccrued to any state, any political subdivi-sion of a state or to the District of Columbia,if they are on or measured by profits orincome or include profits or income as ameasure of tax, including taxes expressly inlieu of any of the foregoing taxes. Includethe New York State Metropolitan Trans-portation Business Tax surcharge. On line 5b enter the amount of New YorkCity General Corporation Tax and BankingCorporation Tax deducted on your federalreturn.

Attach a schedule listing each locality and theamount of all those taxes deducted on yourfederal return.

LINES 6a, 6b, 6c AND 6d -NEW YORK CITY ADJUSTMENTSa) The credit for sales tax paid on electric-

ity or electric service used in the pro-duction of certain tangible property for-merly allowed by Admin. Code §11-604.15 has been repealed for purchaseson or after November 1, 2000. Noamount should be added back withrespect to this credit.

Purchases of machinery or equipmentfor which a credit is allowed by Admin.Code §11-604.12 were exempted fromsales tax effective December 1, 1989.Purchases of certain services per-formed on machinery or equipmentused in production for which a credit isallowed by Admin. Code §11-604.17-a


were exempted from sales tax effectiveSeptember 1, 1996. Credits may betaken under these two provisions onlyif the sales tax payment was made inthe current year with respect to a pur-chase in a period when the applicablesales tax was effective. In such case,the sales tax excluded or deducted forfederal tax purposes should be addedback. If you are claiming a credit pur-suant to §11-604.12, a form NYC 9.5 forthe year 1990 or a prior year should beused. If you are claiming a credit pur-suant to §11-604.17-a, a form NYC 9.5for the year 2000 or a prior year shouldbe used.

b&c) Taxpayers claiming the real estate tax escalation credit, the employment oppor-tunity relocation costs credit, or the Industrial Business Zone credit must enter on lines 6(c) and 6(b), respectively the amounts shown on lines 4 and 5, respectively, of Part II of Form NYC-9.6.

d) The Federal bonus depreciationallowed for "qualified property," asdefined in the Job Creation and WorkerAssistance Act of 2002 is not allowedfor General Corporation Tax purposesexcept for such deductions allowedwith respect to "qualified New York lib-erty zone property", "qualified NewYork liberty zone leasehold improve-ments" and "qualified property" placedin service in the Resurgence Zone (gen-erally the area in the borough of Man-hattan South of Houston Street andNorth of Canal Street.) For City taxpurposes, depreciation deductions forall other "qualified property" must becalculated as if the property was placedin service prior to September 11, 2001.See, Finance Memorandum 02-3(Revised) "New York City Tax Conse-quences of Certain Retroactive Federaland New York Tax Law Changes" formore information. For tax years begin-ning on or after January 1, 2004, otherthan for eligible farmers (for purposesof the New York State farmers' schooltax credit), the amount allowed as adeduction with respect to a sport utilityvehicle that is not a passenger automo-bile for purposes of section 280F(d)(5)of the Internal Revenue Code is limitedto the amount allowed under section280F of the Internal Revenue Code as ifthe vehicle were a passenger automo-bile as defined in that section. ForSUVs that are qualified property otherthan qualified Resurgence Zone proper-ty and other than New York LibertyZone property, the amount allowed as adeduction is calculated as of the datethe SUV was actually placed in serviceand not as of September 10, 2001. On

the disposition of an SUV subject to thelimitation, the amount of any gain orloss included in income must be adjust-ed to reflect the limited deductionsallowed for City purposes under thisprovision. Enter on Schedule B, line6(d) and 16 the appropriate adjust-ments from form NYC-399Z. SeeFinance Memorandum 06-1 datedOctober 12, 2006 “Application of IRC§280F Limits to Sports Utility Vehi-cles.”

The federal depreciation deductioncomputed under the Accelerated CostRecovery System or Modified Acceler-ated Cost Recovery System (IRC Sec-tion 168) is not allowed for the follow-ing types of property:

property placed in service in NewYork State in taxable years begin-ning before January 1, 1985 (exceptrecovery property subject to theprovisions of Internal RevenueCode Section 280-F)property of a taxpayer principallyengaged in the conduct of an avia-tion, steamboat, ferry, or navigationbusiness, or two or more such busi-nesses which is placed in service intaxable years beginning afterDecember 31, 1988, and before Jan-uary 1, 1994.

In place of the federal depreciationdeduction, a depreciation deductionusing pre-ACRS or MACRS rules (IRCSection 167) is allowed. Enter on line6d the ACRS adjustment from FormNYC-399, Schedule C, line 8, ColumnA. Enter on line 16 the ACRS adjust-ment from Form NYC-399, Schedule C,line 8, Column B.ACRS and MACRS may be available forproperty placed in service outside NewYork in years beginning after 1984 andbefore 1994. See Finance Memoran-dum 99-4 “Depreciation for PropertyPlaced in Service Outside New YorkAfter 1984 and Before 1994”.

LINE 7a - PAYMENT FOR USE OFINTANGIBLESAdd back payments for the use of intangiblesmade to related members as required by Ad.Code section 11-602.8(n). See "Highlights ofRecent Tax Law Changes for Corporations."

LINE 7b - OTHER ADDITIONS a) Effective for taxable years beginning on

or after January 1, 1982, the New YorkCity Admin. Code was amended to nullifythe effects of federal “safe harbor leases”upon New York City taxable income (Sec-tion 11-602.8(a)(8) and (9) of the Admin.Code). This applies to agreements

entered into prior to January 1, 1984.Any amount included in the computa-tion of federal taxable income solely asa result of an election made under IRCSection 168(f)(8) must be removedwhen computing New York City tax-able income. Any amount excluded inthe computation of federal taxableincome solely as a result of an electionmade under IRC Section 168(f)(8) mustbe included when computing New YorkCity taxable income.Exempt from these adjustments areleases for qualified mass commutingvehicles and property of a taxpayer,subject to the General Corporation Tax,principally engaged in the conduct ofan aviation, steamboat, ferry or naviga-tion business, or two or more suchbusinesses, which is placed in servicebefore taxable years beginning in 1989.Enter the appropriate additions anddeductions on lines 7 and 17, respec-tively, and attach a rider to show the“safe harbor” adjustments to New YorkCity taxable income.

b) Foreign taxes paid or accrued that arededucted from gross income to deter-mine federal taxable income must beadded to entire net income. A foreign taxcredit may not be used as a deductionwhen computing NYC entire net income.

c) Any “windfall profit” tax deducted incomputing federal income must beadded back when computing NYCentire net income.

d) If the taxpayer deducted on its federalreturn interest paid to a corporatestockholder owning more than 50% ofits issued and outstanding stock, thatcorporate shareholder may not excludethat interest from its NYC entire netincome as income from subsidiary capi-tal. (See instructions for lines 3, 4 and9.) To enable a more than 50% corpo-rate shareholder to treat any such inter-est as excludible income from sub-sidiary capital, such interest should beadded back on line 7 of this return incomputing NYC entire net income.

e) In the case of a taxpayer organized out-side the United States, all income fromsources outside the United States, lessall allowable deductions attributablethereto, that was not taken into accountin computing federal taxable incomemust be added back in computing NYCentire net income.

LINES 9a and 9b - INCOME FROMSUBSIDIARY CAPITALEnter on line 9a dividends, capital gains andother income and gain from subsidiary capi-tal that was included as part of federal tax-able income. Complete Schedule C.


Enter on line 9b interest from subsidiarycapital that was included in federal taxableincome. Do not enter on line 9b interestfor which the payor subsidiary claimed adeduction. (See instructions for Schedule B,lines 3 and 4, above, for the definition of sub-sidiary capital.)

LINE 10 - NONSUBSIDIARY DIVIDENDSEnter 50% of dividends received from non-subsidiary corporations. Do not include thefollowing: (1) “gross-up” dividends pursuantto IRS Section 78, and (2) dividends fromstocks not meeting the holding periodrequirement set forth in IRC Section 246(c).Regulated investment companies and realestate investment trusts do not qualify forthis deduction.

LINE 11 - NET OPERATING LOSSEnter New York City net operating loss car-ryforward from prior years. The followingrules apply to net operating losses. 1) A deduction may only be claimed for net

operating losses sustained in taxableyears during all or part of which the cor-poration was subject to the General Cor-poration Tax. New York City allows netoperating losses to be used in the samemanner as provided by IRC Section 172.However, the amount of any federal lossmust be adjusted in accordance withSection 11-602.8(f) of the Admin. Code.Regulated investment companies andreal estate investment trusts do not qual-ify for this deduction.

2) The deduction of a net operating losscarryforward from prior years may notexceed, and is limited to, the amount ofthe current year’s federal taxableincome. A net operating loss may not beclaimed as a deduction if Schedule B,line 1 reflects a loss.

3) The deduction shall not exceed thededuction that would have been allowedif the taxpayer had not made an electionto be an S Corporation under the rules ofthe Internal Revenue Code or had notelected to be included in a group report-ing on a consolidated basis for federalincome tax purposes.

4) The New York City net operating lossdeduction taken for City purposes foreach year may not exceed the deductionallowable for that year for federal incometax purposes calculated as if the taxpay-er had elected to relinquish the carry-back period except with respect to thefirst $10,0000 of each year’s loss. Thecarryback period for General Corpora-tion Tax purposes corresponds to thefederal carryback period. If the taxpayerelects to use a 2-year carryback periodfor federal purposes, the same carrybackperiod applies for City purposes. If the

taxpayer elects to relinquish the entirecarryback period for federal purposes,then the taxpayer may not carryback anyamount for City purposes. See instruc-tions for Forms NYC-8 and NYC-8CB formore information.

5) Losses which are not permitted to be car-ried back, may generally be carried for-ward and used to offset income for theperiod permitted for federal tax purpos-es, generally 20 years subsequent to theloss year for losses incurred in taxableyears beginning after August 5, 1997.

6) Corporations principally engaged in theconduct of an aviation, steamboat, ferryor navigation business or two or more ofsuch businesses are permitted to claim anet operating loss deduction in the samemanner as other corporations.These corporations are allowed to carryforward any net operating losses or aproportionate part of a net operating losssustained during the federal taxable peri-od(s) covering the years 1985 through1988, provided the corporation was tax-able under Title 11, Chapter 6, Subchap-ter 4 of the Admin. Code (TransportationCorporation Tax) for the calendar years1985 through and including 1988. Thenet operating loss must be computed as if:a) the corporation had been subject to

taxation under Subchapter 2 (Gener-al Corporation Tax) during the peri-od(s) the loss was sustained,

b) the loss was sustained in 1988, andc) the taxpayer had elected to relin-

quish the entire carryback periodunder IRC Section 172.

For special rules relating to acquisitions,mergers or consolidations involving cor-porations principally engaged in the con-duct of aviation, steamboat, ferry or navi-gation business, refer to Section 77b ofChapter 241 of the Laws of 1989.

7) Corporations reporting both businessand investment income must completeline 22 of this schedule to apportion anynet operating loss between businessincome and investment income.

Attach a copy of the schedule supporting thededuction claimed at either line 29(a) onpage 1 of your federal Form 1120 or line25(a) of your federal Form 1120A.

CARRYBACK LOSSESIf the amount on line 18 is greater than theamount on line 8 so that the entry on line 19would be a loss, a request to carry it back asa net operating loss deduction in any prioryear must be made separately on Form NYC-8CB or Form NYC-8. Do not attach or mail aForm NYC-8CB or Form NYC-8 with the taxreturn. This request must be submittedwithin three years of the due date of thereturn for the loss year or within the period

prescribed in Section 11-678 of the Admin.Code. Corporations that have elected torelinquish the carryback period for a netoperating loss incurred in taxable yearsbeginning after August 5, 1997 must submita copy of the federal election.Because an S corporation does not carryover NOLs, it will not have made a federalelection to relinquish any or all of its carry-back period. Therefore, for City tax purpos-es for losses arising in taxable years endingin or after 2002, it will be presumed that,unless the taxpayer S corporation attached astatement to this return indicating that thetaxpayer intends to carry back the loss, thetaxpayer is presumed to have elected torelinquish the entire carryback period. For Scorporations filing on a combined basis onlywith other S corporations or qualified Sub-chapter S subsidiaries, any statementattached either to a proforma NYC-3L or tothe NYC-3A will be deemed applicable to theentire group. Any excess net operating lossmay be carried forward as if the taxpayer hadelected to relinquish the entire carrybackperiod for all but the first $10,000 of the loss.

LINE 12 - PROPERTY ACQUIREDPRIOR TO 1966A deduction is allowed with respect to gainfrom the sale or other disposition of any prop-erty acquired prior to January 1, 1966 (exceptstock in trade, inventory, property held pri-marily for sale to customers in the ordinarycourse of trade or business or accounts ornotes receivable acquired in the ordinarycourse of trade or business). The amount ofthe deduction with respect to each such prop-erty is equal to the difference between:a) the amount of the taxpayer’s federal

taxable income; andb) the amount of the taxpayer’s federal

taxable income (if smaller than theamount described in(a)), computed asif the federal adjusted basis of eachsuch property (on the sale or other dis-position of which gain was realized) onthe date of the sale or other dispositionhad been equal to either:

1) its fair market value on January 1,1966, or the date of its sale orother disposition prior to January1, 1966, plus or minus all adjust-ments to basis made with respectto such property for federalincome tax purposes for periodson or after January 1, 1966; or

2) the amount realized from its saleor other disposition, whichever islower.

In no event, however, shall the total amountcomputed above exceed the taxpayer’s netgain for the year from the sale or other dis-position of property (other than stock intrade, inventory, property held primarily for


sale to customers in the ordinary course oftrade or business, or accounts or notesreceivable acquired in the ordinary courseof trade or business).

Attach a rider showing computation and acopy of federal Form 1120, 1120-A or 1120-S, Schedule D.

LINE 13 - CITY AND STATEREFUNDSEnter at line 13 refunds or credits of theNew York City General Corporation Tax,New York State Franchise Tax or New YorkCity or State Banking Corporation Tax forwhich no tax exclusion or deduction wasallowed in determining the taxpayer’s tax-able (entire) net income in a prior year.

LINE 14 - SALES TAX REFUNDS ANDCREDITSThis line relates to credits or refunds ofsales and compensating use tax paid on cer-tain machinery and equipment and/or cer-tain services included in federal taxableincome for which a credit was claimed in aprior year. The amount entered hereshould be the same as the amount enteredat line 12 of Schedule A. (Refer to instruc-tions for Schedule A, line 12.)

There is no addback for current refunds ofsales tax paid on purchases of electricity orelectric service used in the production ofcertain tangible property for which the tax-payer took a credit in a prior period underAdm. Code §11-604.15.

LINE 15 - FEDERAL JOBS CREDITEnter the portion of wages and salaries paidor incurred for the taxable year for which adeduction is not allowed pursuant to theprovisions of Section 280C of the InternalRevenue Code because the federal targetedjobs tax credit was taken. Attach FederalForm 5884 or 8884 for Liberty Zone busi-ness employees. The New York LibertyZone business employee credit is only avail-able for wages paid or incurred during thecurrent taxable year for work performed in2002 or 2003.

LINE 16 - DEPRECIATION ADJUSTMENTEnter on line 16 the adjustments from FormNYC-399 and/or Form NYC-399Z, ScheduleC, line 8, Column B. See instructions forSchedule B, line 6(d).

LINE 17a - ROYALTY INCOME FROMINTANGIBLESSubtract income such as royalties fromrelated members for the use of intangiblesas described in section 11-602.8(n) of theAdministrative Code. See "Highlights ofRecent Tax Law Changes for Corporations."

LINE 17b - OTHER DEDUCTIONSa) Refer to instructions to Schedule B,

line 7 for adjustments relating to safeharbor leases.

b) Taxpayers entitled to a special deduc-tion for construction, reconstruction,erection or improvement of air pollu-tion control facilities initiated on orafter January 1, 1966, and having a situsin NYC in accordance with Section 11-602.8(g) should submit a rider showingthe complete computation.Enclose certification of complianceissued pursuant to Section 17-0707 orSection 19-0309 of the EnvironmentalConservation Law. Entire net incomefor the current year and all succeedingyears must be computed without anydeduction for such expenditures or fordepreciation of such property.

c) Deduct foreign dividend gross-up pur-suant to Section 78 of the IRC (see fed-eral Form 1120, Schedule C, line 15) tothe extent not deducted at line 9a.Entire net income does not include anyamount treated as dividends pursuantto Section 78 of the IRC.

d) Regulated investment companies mustdeduct dividends paid to stockholderson this line.

LINE 19 – ENTIRE NET INCOMEIf line 18 is greater than line 8 so that theamount on this line would be a loss, enterzero (“0”) on this line, skip lines 22 through26, and enter zero (“0”) on line 27 of thisSchedule B and on line 1 of Schedule A.That loss may be available as a carryover.See instructions to Schedule B, Line 11, formore information.

LINE 20 - SPECIAL ADJUSTMENTSIf, as a result of the adjustments on this line,entire net income is a loss, enter zero (“0”)on this line, skip lines 22 through 26, andenter zero on line 27 of this Schedule B andline 1 of Schedule A.a) A corporation organized outside the

United States must enter at line 20 itsentire net income wherever earned,including all income from sources out-side the United States, less all allow-able deductions attributable thereto,not taken into account in computingfederal taxable income. Attach Sched-ule. See “FOREIGN AIRLINES” underGENERAL INFORMATION, above.

b) If you are, either separately or as amember of a partnership, doing insur-ance business as a member of the NewYork Insurance Exchange described inSection 6201 of the Insurance Law,make the adjustment required underSection 11-602.8(a)(6) and Section 11-602.8(b)(8) of the Admin. Code.

c) For tax years beginning on or after August 1, 2002, corporations that are partners in partnerships that receive at least eighty percent of their gross receipts from providing mobile telecommunications services must exclude their distributive share of income, gains, losses and deductions from any such partnership, including their share of separately reported items, from their federal taxable income reported on line 1. See "Highlights of Recent Tax Law Changes for Corporations", supra.

LINE 21 - INVESTMENT INCOMEInvestment income includes: 50% of dividends from non-subsidiary stocks held for investment; interest from investment capital; net capital gain or loss from sales or exchanges of nonsubsidiary securities held for investment; and income from cash if an election is made to treat cash as investment capital on line 3 of Schedule D. Do not include any “gross-up” dividends pursuant to Section 78 of the IRC that have been deducted in computing entire net income.

Investment income includes interest received on a loan to a subsidiary if the subsidiary claims such interest as a NYC General or Banking Corporation Tax deduction on any return for any period, and if such loan is evidenced by a bond or other corporate security. Do not include any capital loss which was not used in computing federal taxable income.

In computing investment income, subtract the amount of deductions allowable in computing entire net income which are directly or indirectly attributable to investment capital or investment income.LINE 21a - DIVIDENDS Enter dividends not excluded on line 10 except for “gross-up” dividends pursuant to Section 78 of the IRC. This includes 50% of dividends from nonsubsidiary corporations for which an exclusion was allowed on line 10 of this schedule and 100% of dividends from stock not meeting the holding period requirement set forth in Section 246(c) of the IRC;

LINE 21d - INCOME FROM CASHEnter income from cash on Schedule B, line 21d, only if you have elected to treat cash as investment capital and have entered the amount thereof on Schedule D, line 3.

LINE 21f - DEDUCTIONS ATTRIBUTABLE TO INVESTMENT INCOMEFor more information, see Statement of Audit Procedure 96-1-GCT, Noninterest Expense Attribution, January 29, 1996 and Statement of Audit Procedure 04-02-AU, GCT & UBT Treatment of Repurchase Agreements and Securities Lending and Borrowing Transactions for Financial Services Firms Regularly Engaged in Such Activities, September 24, 2004, available on the Department's website at nyc.gov/finance.


LINE 22 - APPORTIONED NEWYORK CITY NET OPERATINGLOSS DEDUCTIONCorporations that report both business andinvestment income must apportion any netoperating loss deduction on line 11 betweenbusiness income and investment income.This is computed by multiplying the netoperating loss deduction by a ratio. Theratio is a fraction, the numerator of whichconsists of investment income beforededucting any net operating loss and thedenominator of which is entire net incomebefore deducting any net operating loss.The ratio may be expressed as a percentage.Multiply the net operating loss deduction bythe result. Enter this amount on line 22.

LINE 23b – INVESTMENT INCOME TOBE ALLOCATEDEnter the amount from line 23a. If theamount on line 23a is greater than theamount on line 19 or 20, enter the amountfrom line 19 or 20. If the entry on line 23a isa loss, enter zero (“0”) on line 23b.

LINE 25 - ALLOCATEDINVESTMENT INCOMEIf the investment allocation percentage iszero, interest on bank accounts must bemultiplied by the business allocation per-centage.

SCHEDULE CSubsidiary Capital and Allocation

- and -SCHEDULE DInvestment Capital and Allocation

Complete Schedule C if you have any sub-sidiaries. (Refer to the instructions for Sched-ule B, lines 3 and 4 for the definition of a sub-sidiary and subsidiary capital.)

Complete Schedule D if you have invest-ment capital. Investment capital is the aver-age value of your investments in stocks,bonds, and other corporate or governmentsecurities, less liabilities, both long termand short term, directly or indirectly attrib-utable to investment capital. Investmentcapital does not include those stocks, bondsor other securities that are held for sale tocustomers in the regular course of businessor that constitute subsidiary capital. Invest-ment capital does not include interests in, orobligations of, partnerships or other unin-corporated entities. (Refer to Title 19 Rulesof the City of New York Section 11-37 for thedefinition of investment capital.)

To determine the value of your assets forbusiness, investment and subsidiary capitalpurposes, you must include real property andmarketable securities at fair market value.

The fair market value of any asset is the price(without any encumbrance, whether or not

the taxpayer is liable) at which a willing sell-er, not compelled to sell, will sell and a willingpurchaser, not compelled to buy, will buy.The fair market value, on any date, of stocks,bonds and other securities regularly dealt inon an exchange, or in the over-the-countermarket, is the mean between the highest andlowest selling prices on that date.

The value of all other property must beincluded at the value shown on the taxpay-er’s books and records in accordance withgenerally accepted accounting principles(GAAP). (Refer to the instructions for Sched-ule E, lines 1 through 5 for more informationon computing average value.)

In completing Schedules C and D, you mayuse the worksheet which appears below todetermine the amount of liabilities indirect-ly attributable to a particular asset.

In column D of Schedules C and D on theline for the asset in question, include thesum of the amount from line 15 of this work-sheet and the amount of liabilities directlyattributable to that asset.

WORKSHEET

Total liabilities from Sch. E, line 6, Col. C .. 1.Liabilities directly attributable to:

Subsidiary capital ....................... 2. __________

Investment capital ...................... 3. __________

Business capital .......................... 4. __________

Add: lines 2, 3, and 4 ............................... 5. __________

Subtract: line 5 from line 1 ....................... 6. __________

Enter amount from either:Sch. C, line 1, col. C less amount from line 2 of worksheet . 7a.__________

ORSch. D, line 1, col. C lessamount from line 3 of worksheet . 7b.__________

Enter amount from Sch. E, line 5, col. Cless amount from line 5 of worksheet ....... 8. __________

Divide: line 7a or 7b by line 8 .................. 9. ________%

Multiply: line 6 by line 9 .......................... 10.__________

Average value of a particular asset .......... 11.__________

Enter amount from either:Sch. C, line 1, col. C ................... 12a._________

ORSch. D, line 1, col. C ................... 12b._________

Divide: line 11 by line 12a or 12b ............ 13.________%

Enter amount from line 10 ....................... 14.__________

Multiply: line 14 by line 13 ...................... 15.__________

To determine the portion of subsidiary orinvestment capital to be allocated within theCity, multiply the amount of subsidiary orinvestment capital during the period cov-ered by the return (column E) by theissuer’s allocation percentage (as defined inthe instructions for Schedule E, line 15).This percentage may be obtained (1) fromtax service publications, (2) by writing to:NYC Department of Finance, Taxpayer Cor-respondence Unit, 59 Maiden Lane, 28th

Floor, New York, NY 10038, (3) from thedepartment’s website under “Forms/Guides”at nyc.gov/finance, or (4) by calling (212)504-4036. If the subsidiary or other issuerwas not doing business in New York Cityduring the preceding year, the percentage iszero. The investment allocation percentageshould be rounded to the nearest one hun-dredth of a percentage point.

SCHEDULE D, LINE 3 - CASHIf you have both business and investmentcapital, you may elect to treat cash on handor on deposit as either business or invest-ment capital. If you wish to elect to treatcash as investment capital, you mustinclude it on this line. Otherwise, you willbe deemed to have elected to treat cash asbusiness capital. You may not elect to treatpart of such cash as business capital andpart as investment capital. You may notrevoke your election after it has been made.

SCHEDULE EComputation and Allocation of Capital

LINES 1 THROUGH 5 - AVERAGE VALUE OF TOTAL ASSETSTo determine the value of your assets forbusiness, investment and subsidiary capitalpurposes, you must include real property andmarketable securities at fair market value.The value of all other property must beincluded at the value shown on the taxpay-er's books and records in accordance withgenerally accepted accounting principles(GAAP).On Schedule E, line 1, enter the value oftotal assets at the beginning of the year incolumn A and at the end of the year in col-umn B. Enter the average value in columnC. Attach a schedule showing the computa-tion of the average value.On line 2, enter the value of real property andmarketable securities included in line 1.Enter on line 4 the fair market value of realproperty and marketable securities.Average value is generally computed on aquarterly basis. A more frequent basis(monthly, weekly or daily) may be used.Where the taxpayer’s usual accounting prac-tice does not permit computation of averagevalue on a quarterly or more frequent basis,a semiannual or annual basis may be used ifno distortion of average value results.

With respect to real property owned bythe taxpayer and located within NewYork City, the fair market value is pre-sumed to be not less than the estimatedmarket value of the property on the FinalAssessment Roll of the City for the peri-od covered by the return or the mostrecent sales price, whichever is greater.

LINE 6 - TOTAL LIABILITIESThe liabilities deductible in computing each


type of capital are those liabilities (both longand short term) that are directly or indirect-ly attributable to each type of capital. Usethe same method of averaging as is used indetermining average value of assets.

LINES 7 THROUGH 11If the period covered by this report is otherthan a period of twelve calendar months, firstfollow the instructions on Schedule E to calcu-late preliminary amounts for lines 7 through11. Before entering these amounts on Sched-ule E multiply each amount by a fraction, thenumerator of which is the number of monthsor major parts thereof included in such periodand the denominator of which is twelve.

Enter on line 8, the amount from ScheduleC, Column E, line 1. Subtract the amount online 8 from the amount on line 7 and enterthe difference on line 9 of this Schedule E.If the amount on line 8 is less than zerobecause liabilities attributable to subsidiarycapital exceed the value of the assets report-ed in Schedule C, add the absolute amountof the amount on line 8 to the amount online 7 and enter the total on line 9. Forexample, if the amount on Schedule E, line 8is ($100) and the amount on Schedule E,line 7 is $200, the amount on Schedule E,line 9 should be $300.If the amount on Schedule D, line 4 is lessthan zero, enter zero (“0”) on line 10 of thisSchedule E, enter the amount from line 9 online 11, and enter zero (“0”) on line 12.

LINE 15 - ISSUER’SALLOCATION PERCENTAGEThe percentage is determined by addingtogether allocated New York City business,investment and subsidiary capital, dividingthe sum by total capital, and rounding to thenearest one hundredth of a percentage point.

The issuer's allocation percentage can-not be less than zero. Do not calculateyour issuer's allocation percentage byadding the business, investment andsubsidiary capital allocation percentagesand dividing that total by the number ofpercentages.

The issuer’s allocation percentage repre-sents the amount of capital employed withinNew York City as compared to total capitalemployed everywhere. Every taxpayer usingForm NYC-3L is required to compute itsissuer’s allocation percentage.

Combined filers must compute a combinedissuer’s allocation percentage by usingamounts from Form NYC-3A. The com-bined issuer’s allocation percentage shouldbe entered on Schedule A of Form NYC-3A.

SCHEDULE HBusiness Allocation

NOTE: Zip codes beginning with the fol-lowing three-digits are within the five bor-

oughs of New York City:

Manhattan - 100, 101, 102Bronx - 104Brooklyn - 112Queens - 111, 113, 114, 116Staten Island - 103

In addition, the five-digit zip codes 11004,11005 and some addresses with a zip code of11001 are in the borough of Queens. If thezip code is 11001, call the US Postal Serviceat (516) 354-3297 to determine if the corpo-ration's address is within New York City.

A corporation is entitled to allocate part ofits business income and capital outside NewYork City if it carries on business bothinside and outside New York City and, fortaxable years beginning before July 1, 1996,only if it has a “regular place of business”outside the City. Otherwise, 100% of itsbusiness income and capital must be allocat-ed to New York City. If you did not carry onbusiness both inside and outside New YorkCity, you must enter 100% at Schedule H,line 5. If you carried on business bothinside and outside New York City, you mustcomplete Schedule G, parts I and II andSchedule H, business allocation percentage.

The business allocation percentage is gen-erally computed by means of a three factorformula:

real and tangible personal property(including rented property)business receiptspayroll

Each factor is computed by dividing theamount in column A (New York Cityamount) by the amount in column B (totalamount). The three resulting percentagesare added together, the sum is divided by 3rounded to the nearest one hundredth of apercentage point and the resulting businessallocation percentage is entered at ScheduleH, line 5. If one of the factors is missing,the other two percentages are added andthe sum is divided by two. If two of the fac-tors are missing, the remaining percentageis the business allocation percentage. A fac-tor is not missing merely because itsnumerator is zero, but is missing if both itsnumerator and denominator are zero.Example: A corporation owns no real ortangible personal property and rents no realproperty either within or without the City.The property factor being missing, the busi-ness allocation percentage is computed byadding the business receipts and payrollpercentages and dividing the total by two.

Property Factor

LINES 1 AND 2

When computing the property percentage,value real and tangible personal propertyowned by the corporation at the adjusted

basis used for federal income tax purposes.However, you may make a one-time revoca-ble election to value real and tangible per-sonal property owned at fair market value.You must make this election on or beforethe due date (or extended due date) for fil-ing the taxpayer’s first General CorporationTax Return. This election will not apply toany taxable year with respect to which thecorporation is included in a combined reportunless each of the corporations included onthe combined report has made the electionwhich remains in effect for such year.

LINE 1b - REAL ESTATE RENTEDThe value of real property rented to the tax-payer is eight times the gross rent payableduring the year covered by this return.Gross rent includes any amount payable asrent or in lieu of rent, such as taxes, repairs,etc., and, if there are leasehold improve-ments made by or on behalf of the taxpayer,the amount of annual amortization of suchcost. Do not include the rental of personalproperty on this line.

LINE 1d - TANGIBLE PERSONALPROPERTY OWNEDEnter the average value of the tangible per-sonal property owned. The term “tangiblepersonal property” means corporeal personalproperty, such as machinery, tools, imple-ments, goods and wares. Do not includecash, shares of stock, bonds, notes, credits,evidences of an interest in property, or evi-dences of debt.

LINE 1e - TANGIBLE PERSONALPROPERTY RENTEDEnter the average value of the tangible per-sonal property you rented. The value ofrented tangible personal property is eighttimes the gross rent payable during theyear covered by this return.

Receipts Factor

LINES 2a AND 2b - SALES OFTANGIBLE PERSONAL PROPERTYEnter on line 2a, column A, receipts in theregular course of business from the sale oftangible personal property where shipmentsare made to points within New York City.Enter on line 2b, column B, receipts from allsales of tangible personal property.

LINE 2c - SERVICES PERFORMEDReceipts from services performed withinNew York City are allocable to New YorkCity. All amounts received by the taxpayerin payment for such services are allocable toNew York City regardless of whether theservices were performed by employees oragents of the taxpayer, by subcontractors,or by any other persons. It is immaterialwhere such amounts were payable or wherethey actually were received.

Commissions received by the taxpayer are


allocated to New York City if the servicesfor which the commissions were paid wereperformed in New York City. If the taxpay-er’s services for which commissions werepaid were performed for the taxpayer bysalesmen attached to or working out of aNew York City office of the taxpayer, thetaxpayer’s services will be deemed to havebeen performed in New York City.

Corporations engaged in publishing newspa-pers or periodicals must allocate receiptsfrom advertising in such publications basedon the circulation of the publication in theCity compared to the total circulation. Corpo-rations engaged in radio or television broad-casting, whether by cable or other means,must allocate receipts from broadcasting pro-grams or commercial messages based uponthe location of the audience for the broad-casts in the City compared to the total audi-ence. For taxable years beginning on or afterJanuary 1, 2002, corporations engaged in pub-lishing newspapers or periodicals or in radioor television broadcasting must allocatereceipts from subscriptions to such newspa-pers, periodicals and broadcast programsbased on the location of the subscriber.

Taxpayers principally engaged in the activi-ty of air freight forwarding acting as princi-pal and like indirect air carriers arerequired to determine receipts for purposesof the receipts factor arising from the activi-ty from services performed within NewYork City as follows: 100% of the receipts ifboth the pick up and delivery associatedwith the receipts are made in New YorkCity and 50% of the receipts if either thepickup or delivery associated with thereceipts is made in the City but not both.

Receipts from management, admin. or dis-tribution services provided to a regulatedinvestment company (RIC) must be allocat-ed based upon the percentage of the RIC’sshareholders domiciled in New York City.(Attach rider showing computation.)

LINE 2d - RENTALS OF PROPERTYReceipts from rentals of real and personalproperty situated in New York City are allo-cable to New York City. These include allamounts received by the taxpayer for theuse or occupation of property, whether ornot such property is owned by the taxpayer.

LINE 2e - ROYALTIESRoyalties from the use in New York City ofpatents or copyrights are allocable to NewYork City. These include all amountsreceived by the taxpayer for the use ofpatents or copyrights, whether or not thepatents or copyrights were originally issuedto or are owned by the taxpayer. A patentor copyright is used in New York City to theextent that activities thereunder are carriedon in New York City.

Do not include royalty income from relatedmembers that was subtracted on line 17 ofSchedule B. See "Highlights of Recent TaxLaw Changes for Corporations."

LINE 2f - OTHER BUSINESSRECEIPTSAll other business receipts earned by thetaxpayer within New York City are allocableto New York City. Business receipts are notconsidered to have been earned by the tax-payer in New York City solely by reason ofthe fact that they were payable in New YorkCity or actually were received in New YorkCity. Receipts from sales of capital assets(property not held by the taxpayer for saleto customers in the regular course of busi-ness) are not business receipts.

Do not include payments for the use ofintangibles from related members that weresubtracted on line 17 of Schedule B.The following are also business receipts andare allocable to New York City:

receipts from the sale of real propertyheld by the taxpayer as a dealer for saleto customers in the regular course ofbusiness, provided the real property wassituated in New York City

receipts from sales of intangible per-sonal property included in businesscapital held by the taxpayer as a dealerfor sale to customers in the regularcourse of business, provided the saleswere made in New York City orthrough a regular place of business inNew York City.

LINE 2i - ADDITIONAL RECEIPTSFACTORFor taxable years beginning after 6/30/96, amanufacturing business may elect to use adouble-weighted receipts factor. An elec-tion must be made on a timely filed originalreturn and is made by entering on line 2ithe amount from line 2h. The election isirrevocable except with special permissionof the Commissioner under certain circum-stances. If you make an election, add thepercentages in column B and divide thesum by 4 and enter the result on line 5rounded to the nearest one hundredth of apercentage point. If one or more of theother factors is missing, add the remainingpercentage(s) and divide by the number ofpercentages so added. If you do not wishto make the election, do not enter anamount on line 2i. For purposes of thiselection, a corporation is engaged in a man-ufacturing business if it is primarilyengaged in the manufacturing and sale oftangible personal property. Manufacturingincludes assembly, working raw materialsinto wares, and giving new shapes, qualitiesor combinations to matter that has alreadygone through some artificial process,

through the use of machinery, tools, appli-ances or other similar equipment. A corpo-ration is primarily engaged in manufactur-ing if more than 50% of its gross receipts forthe year are attributable to manufacturing.See Title 19 Rules of the City of New York§11-63(c)(4) for more information.

If a taxpayer that is otherwise eligible toelect to use a double-weighted receipts fac-tor is permitted or required to file on a com-bined basis with one or more other corpora-tions, the taxpayer may elect to use a dou-ble-weighted receipts factor only if therequirements for the election would be metif all the corporations included in the com-bined report were treated as a single corpo-ration. If a taxpayer included in a combinedreport properly makes an election to use adouble-weighted receipts factor, each of theother corporations in the combined groupswill be treated as having made a proper elec-tion to use a double-weighted receipts factor.

Payroll Factor

LINE 3a - WAGES AND SALARIESEmployees within New York City include allemployees, except general executive offi-cers, regularly connected with or workingout of an office or place of business main-tained by the taxpayer within New YorkCity, irrespective of where the services ofthese employees were performed.

General executive officers include the chair-man, president, vice-president, secretary,assistant secretary, treasurer, assistant trea-surer, comptroller, and any other officercharged with the general executive affairsof the corporation. An executive officerwhose duties are restricted to territoryeither inside or outside of New York City isnot a general executive officer.

LINE 5 - BUSINESS ALLOCATIONPERCENTAGEAviation Corporations and CorporationsOperating Vessels. Complete Schedule I (Business Allocationfor Aviation Corporations and CorporationsOperating Vessels) and enter the percent-age from part 1 or 2 on Schedule H, line 5.

SCHEDULE IBusiness Allocation for Aviation Corpora-tions and Corporations Operating Vessels.

Part 1 - Aviation CorporationsA taxpayer principally engaged in the con-duct of aviation is required to determine theportion of the entire net income to be allocat-ed within the City by multiplying its businessincome by a business allocation percentagewhich is equal to the arithmetic average ofthe three percentages from part 1, lines 2, 4and 6.

Line 1“Aircraft arrivals and departures” means


the number of landings and takeoffs of theaircraft of an aviation corporation and thenumber of air pickups and deliveries bysuch aircraft. Arrivals and departures solelyfor maintenance or repair, refueling (whereno debarking or embarking of trafficoccurs), or arrivals and departures in theevent of emergency situations should notbe included in computing this percentage.

Line 3“Revenue tons handled” by an aviation cor-poration at an airport means the weight, intons, of revenue passengers (at two hun-dred pounds per passenger) and revenuecargo first received either as originating orconnecting traffic, or finally discharged bysuch corporation at such airport.

Line 5“Originating revenue” means revenue toan aviation corporation from the trans-portation of revenue passengers and rev-enue property first received by such cor-poration at an airport as either originat-ing or connecting traffic.

Line 8Transfer the percentage from part 1, line8 to Schedule H, line 5.

Part 2 - Corporations Operating VesselsA taxpayer principally engaged in the opera-tion of vessels is required to determine theportion of entire net income to be allocatedwithin the City by multiplying its businessincome by a business allocation percentagedetermined by dividing the aggregate num-ber of working days of the vessels it ownsor leases in territorial waters of the City dur-ing the period covered by its report by theaggregate number of working days of all thevessels it owns or leases during the period.Complete part 2.Line 1

“Working days” means days duringwhich a vessel is sufficiently manned forthe carriage of persons or cargo or duringwhich it has cargo aboard. The workingtime in New York City territorial watersand the working time everywhere shallbe computed for each vessel in hours andminutes. At the end of the year, suchtime shall be totalled for all vessels andthe sum converted into days. In lieu ofrecords indicating actual time in NewYork City territorial waters, such timemay be computed on the basis of recordsshowing the number of times theAmbrose Light Station was passed on theway in and out of port.

Line 2Transfer the percentage from part 2, line2 to Schedule H, line 5.

SCHEDULE JAdditional Required Information

All questions must be answered.Question 1In reporting the "NYC principal businessactivity," give the one activity that accountsfor the largest percentage of total receipts.Total receipts means gross receipts plus allother income. State the broad field of busi-ness activity as well as the specific productor service (e.g., mining copper, manufactur-ing cotton broad woven fabric, wholesalemeat, retail men’s apparel, export or importchemicals, real estate rental, or real estateoperation of motel).Question 2If the corporation is included in a consoli-dated federal return, give the name of thecommon parent corporation filing the con-solidated return.Question 3If the corporation is included in a New YorkCity Combined General Corporation TaxReturn, give the name of the corporationthat is a member of the combined groupand owns or controls, directly or indirectly,substantially all of the capital stock of eachother member of the combined group. If nocorporation that is part of the combinedgroup satisfies this requirement, give thename of the person or corporation thatowns or controls, directly or indirectly, sub-stantially all of the capital stock of all themembers of the combined group.Question 10If you answer “yes” to question a, attach aseparate sheet providing street address, bor-ough, block and lot number of such proper-ty. If you answer “yes” to question b, c or d,complete questions 11 and 12.

A controlling interest in the case of a corpo-ration means:

50% or more of the total combined vot-ing power of all classes of stock of suchcorporation; or50% or more of the total fair marketvalue of all classes of stock of such cor-poration.

Question 13If you answer “yes” to question 13, no por-tion of the income, gain, loss, deduction orcapital of a QSSS is permitted to be includedin a separate report filed by the S corpora-tion parent. The QSSS must file a separategeneral corporation tax report. See FinanceMemorandum 99-3.

SCHEDULE KFederal Return InformationIf the corporation files as a member of afederal consolidated group, enter the infor-mation as it appears on its proforma feder-al return. If the corporation files a sepa-

rate return, enter the information appear-ing on the Federal 1120 filed with the IRS.

PREPAYMENTS SCHEDULEEnter the payment date and the amount of allprepayments made for this tax period. In thelast column enter the Transaction ID Num-ber. Every corporate estimated payment toNew York City has been stamped with atwelve digit Transaction ID Code. (Thenumber can be found on the face of your can-celled check.) Enter on line E the amount ofany overpayment from the prior year thatyou elected to credit toward this year’s tax.Do not include this amount on lines Bthrough D.

CUSTOMER ASSISTANCEFor interest calculations and account infor-mation, contact Customer Assistance at(212) 504-4036, Monday through Fri-day, 8:30am to 5:30 pm. You can speak to a Customer AssistanceRepresentative between the hours of 9:00am and 4:30 pm.You can also visit our Internet website at

nyc.gov/finance

PRIVACY ACT NOTIFICATIONThe Federal Privacy Act of 1974, as amend-ed, requires agencies requesting SocialSecurity Numbers to inform individualsfrom whom they seek this information asto whether compliance with the request isvoluntary or mandatory, why the request isbeing made and how the information willbe used. The disclosure of Social SecurityNumbers for taxpayers is mandatory and isrequired by section 11-102.1 of the Admin-istrative Code of the City of New York.Such numbers disclosed on any report orreturn are requested for tax administrationpurposes and will be used to facilitate theprocessing of tax returns and to establishand maintain a uniform system for identify-ing taxpayers who are or may be subject totaxes administered and collected by theDepartment of Finance, and, as may berequired by law, or when the taxpayergives written authorization to the Depart-ment of Finance for another department,person, agency or entity to have access(limited or otherwise) to the informationcontained in his or her return.


NYC-3L - 2006 Instructions

instructions for form nyc-3l f i n a n c e new york ...ch. 62, pt. g3, sec. 6 of the laws of 2003....

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