Instructions for Form NYC-3L

Instructions for Form NYC-3L F I N A N C ENEW � YORK

General Corporation Tax Return For fiscal years beginning in 2007 or for calendar year 2007

� For tax years beginning in 2007, taxpayers with (1) gross income, as defined under §61 of the Internal Revenue Code, of less than$250,000, (2) a business allocation of 100%, and (3) no investment capital or income, or subsidiary capital or income are exempt fromhaving to determine the alternative tax on capital and the alternative tax on entire net income plus compensation. See section 11-604(1)(I)ofthe Administrative Code of the City of NewYork, as added by Chapter 491 of the Laws of 2007. If a taxpayer meets these criteria and isotherwise eligible to file Form NYC 4-S, the taxpayer may be eligible to use new Form NYC-4S-EZ. To determine if you can use FormNYC-4S-EZ, see the instructions for that new form. Taxpayers who meet the three criteria noted above but are not eligible to file a FormNYC-4S-EZ must use Form NYC-3L but need not calculate the alternative tax on capital and the alternative tax on entire net income pluscompensation. For purposes of computing entire net income for city purposes, corporations, other than New York State S corporations,that meet the three requirements listed above, may elect to use the sum of NewYork State entire net income and any deductions taken forthe taxable year in computing federal taxable income for General Corporation Tax paid or accrued.

� For tax years beginning in 2007, the alternative tax measured by entire net income plus compensation is determined by using 26.25percent, as a multiplier, instead of 30 percent. See Chapter 491 of the Laws of 2007.

� This year’s form has been modified to make it easier for taxpayers to request the consent of the Department of Finance to the use analternative business allocation method. Taxpayers simply check the box the appropriate box in of Schedule H, complete ScheduleH, Part 3, pay the tax based on that Schedule, and attach a rider, as further explained in the instructions to Schedule H.

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

� For films and shows completed on or after January 1, 2005, eligible taxpayers are allowed a Made in NYC Film Production Creditequal to 5% of the qualified production costs paid or incurred in the production of qualified films and television shows. Use FormNYC-9.9 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 farm-ers (for purposes of the New York State farmers' school tax credit), the amount allowed as a deduction with respect to a sport utilityvehicle that is not a passenger automobile for purposes of section 280F(d)(5) of the Internal Revenue Code is limited to the amountallowed under section 280F as if the vehicle were a passenger automobile as defined in that section. For SUVs that are qualified prop-erty, other than qualified Resurgence Zone property and other than New York Liberty Zone property, the amount allowed as a de-duction is calculated as of the date the SUV was actually placed in service and not as of September 10, 2001. See, FinanceMemorandum 07-3 dated September 24, 2007 “Application of IRC Section 280F Limits to Sports Utility Vehicles” for more infor-mation.

� The Relocation Employment Assistance Program (REAP) has been reinstated and a program granting similar benefits to businessesthat relocate to lower Manhattan (LMREAP) has been enacted. Both the reinstatement of the REAP program and the enactment ofthe 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 requiredto add back to ENI certain payments for the use of intangible property, such as trademarks or patents, made during the tax year torelated member(s) to the extent such payments were deducted in computing federal taxable income. Where the related member is aNew York City taxpayer, the related member must subtract from ENI those payments received during the tax year to the extent thepayments were included in federal taxable income and were required to be added back to the ENI of a related taxpayer. See Chap-ter 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 receiptsfrom charges for the provision of mobile telecommunications services to customers will be taxed as if they were regulated utilitiesfor 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 beenamended to conform to the Federal Mobile Telecommunications Sourcing Act of 2000. In addition, if any such entity is a partner-ship, its partners will not be subject to the New York City Utility Tax on their distributive share of the income of any such entity. Fi-nally, for tax years beginning on and after August 1, 2002, partners in any such entity will not be taxed on their distributive share ofthe 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, GeneralCorporation Tax and Banking Corporation Tax, the City has "decoupled" from the Federal bonus depreciation deductions allowedunder the Job Creation and Worker Assistance Act of 2002 and the Jobs and Growth Tax Relief Reconciliation Act of 2003, exceptwith respect to the depreciation deductions allowed with respect to "qualified New York liberty zone property", "qualified New Yorkliberty zone leasehold improvements" and "qualified property" placed in service in the Resurgence Zone (generally the area in theborough of Manhattan South of Houston Street and North of Canal Street.) For City tax purposes, depreciation deductions for allother "qualified property" must be calculated as if the property was placed in service prior to September 11, 2001. See, Finance Mem-orandum 02-3 (Revised) "New York City Tax Consequences of Certain Retroactive Federal and New York Tax Law Changes" andForm NYC-399Z for more information.

Highlights of Recent Tax Law Changes for Corporations

GENERAL INFORMATION

S CORPORATIONSAn S Corporation is subject to the GeneralCorporation Tax and must file either FormNYC-4S, NYC-4S-EZ or NYC-3L, whicheveris applicable. See Finance Memorandum 99-3 for information regarding the treatment ofqualified subchapter S subsidiaries.

CORPORATION DEFINEDUnincorporated entities electing to be treatedas associations taxable as corporations for fed-eral income tax purposes pursuant to the“check-the-box” rules under IRC §7701(a)(3)are treated as corporations for City tax purposesand are not subject to the Unincorporated Busi-ness Tax. Eligible entities having a single ownerdisregarded as a separate entity under the“check-the-box” rules and treated as either a soleproprietorship or a branch for federal tax pur-poses will be similarly treated for City tax pur-poses. See Finance Memorandum 99-1 foradditional information.

TRANSITIONAL PROVISIONSRELATING TO THE ENACTMENTOFTHE GRAMM-LEACH-BLILEYACT OF 1999:Existing Corporations:Except for a banking corporation described inparagraphs (1) through (8) of Ad. Code sec-tion 11-640(a) (see, Form NYC-1, Instructions"Who Must File" items A through C), for tax-able years beginning after 1999 and before2001, a corporation that was in existence be-fore January 1, 2000 was taxable under thesame tax (either NYC General CorporationTax (GCT) or NYC Banking Corporation Tax(BCT)) as applied to it for its last taxable yearbeginning before January 1, 2000. For thispurpose, a corporation was considered to havebeen subject to a tax prior to 2000 if it was nota taxpayer but was properly included in a com-bined report filed by another corporationunder that tax. A corporation that was in exis-tence prior to 2000 but first became subject totax after 2000 is considered to have been sub-ject to whichever tax, GCT or BCT, wouldhave applied based on its activities had it beena 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, that appliedto it for the last year beginning before 2001.Ch. 383, Laws of 2001, Part P, §8.Ad. Code 11-640 was further amended to re-quire a corporation that was in existence priorto January 1, 2003 to be taxed in years begin-ning after 2002 and before 2004 under thesame tax, either GCT or BCT, that applied to

it for the last year beginning before 2003. Ch.62, Pt. G3, sec. 6 of the Laws of 2003. Ad.Code §11-640 again was amended in 2004 torequire a corporation that was in existenceprior to January 1, 2004 to be taxed in yearsbeginning after 2003 and before 2006 underthe tax, either GCT or BCT, that applied to itfor the last year beginning before 2004. Ch.60, Pt.G, §6 of the Laws of 2004.Code 11-640 was also amended in 2006 to re-quire a corporation that was in existence priorto January 1, 2006 to be taxed in years begin-ning after 2005 and before 2008 under the tax,either the GCT or the BCT that applied to itfor the last year beginning before 2006. Ad.Code § 11-640(k), as added by Ch. 62, Pt. I,of the Laws of 2006.Newly-formed Corporations:A corporation formed on or after January 1,2000, and before January 1, 2001, was per-mitted to elect to be subject to either the GCTor BCT for its first taxable year beginningafter 1999 and before 2001 provided either:� the corporationwas a financial subsidiary, or� at least 65% of the corporation's voting

stock is owned or controlled, directly or in-directly, by a financial holding company,and the corporation is principally engagedin activities described in sections 4(k) 4 or4(k)5 of the Bank Holding Company Actof 1956, as amended, or described in reg-ulations promulgated under that section.

A financial subsidiary is a corporation whosevoting stock is 65% or more owned or con-trolled directly or indirectly, by a banking cor-poration (including a corporation that haselected to be subject to the BCT under thesetransition rules) described in paragraphs (1)through (3) of Ad. Code section 11-640(a) anddescribed in 12 USCS section 24a or section46 of the Federal Deposit Insurance Act.A financial holding company is a corporationthat has filed with the Federal Reserve Boarda written declaration of its election to be a fi-nancial holding company under section 4(i) ofthe Bank Holding Company Act of 1956, asamended, provided the Federal Reserve Boardhas not found that election to be ineffective.An election by a newly-formed corporationunder this provision must have been madeon or before the due date for filing its re-turn for the applicable year, including ex-tensions, and was made by filing the returnrequired under the appropriate tax. Theelection is irrevocable.

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

Similarly, newAd. Code §11-640(i) permits aqualifying corporation formed on or after Jan-uary 1, 2003 and before January 1, 2004 tomake a comparable election for its first taxyear beginning after 2002 and before 2004.Ch. 62, Pt. G3, sec. 6 of the Laws of 2003.New Ad. Code §11-640(j) similarly permits aqualifying corporation formed on or after Jan-uary 1, 2004 and before January 1, 2006 tomake a comparable election for its first tax-able year beginning after 2003 and before2006. Ch. 60, Pt. G, §6 of the Laws of 2004.Also, new Ad. Code § 11-640(k) permits aqualifying corporation formed on or after Jan-uary 1, 2006 and before January 1, 2008 tomake a comparable election for its first tax-able year beginning after 2005 and before2008. Ad. Code § 11-640(k), as added by Ch.62, Pt. I, of the Laws of 2006.Combined Filing under Transitional Provi-sions

Abank holding company doing business in theCity that, during a taxable year beginning after1999 and before 2008, registers for the firsttime as a bank holding company under theBank Holding Company Act of 1956, asamended, and elects to be a financial holdingcompany, may file a combined report underthe BCT for such year with one or more bank-ing corporations doing business in the Cityand 65% or more owned or controlled, directlyor indirectly, by that bank holding companywithout seeking permission from the Com-missioner. In addition, such bank holdingcompany may, without seeking the Commis-sioner's permission: (i) include in a combinedreport filed for a subsequent year beginningafter 1999 and before 2008 any eligible bank-ing corporation that, for the first time in suchsubsequent year, either is doing business in theCity or meets the above ownership require-ments; and (ii) eliminate from a combined re-port filed in any such subsequent year anycorporation no longer meeting the require-ments for combination in such subsequentyear. Except as provided above, the permis-sion of the Commissioner is required for anysuch bank holding company to cease to file ona combined basis, elect to file on a combinedbasis or make any changes to the compositionof the group of corporations filing on a com-bined basis for any subsequent year. Ad Code§11-646(f)(2)(iv).

CORPORATIONS REQUIREDTO FILE FORM NYC-3LA corporation (as defined in Section 11-602.1of the New York City Administrative Code)doing business, employing capital, or owningor leasing property in a corporate or organizedcapacity, or maintaining an office in NewYorkCity must file Form NYC-3L and cannot use

Instructions for Form NYC-3L - 2007 Page 2

Form NYC-4S if:1) it carries on business both inside and out-

side New York City;2) it has subsidiary and/or investment capital;3) it claims an optional deduction for ex-

penditures relating to air pollution controlfacilities, as provided in Section 11-602.8(g) of the NYCAdmin. Code;

4) it claims a modification with respect togain arising from the sale of certain prop-erty, as provided in Section 11-602.8(h)of the NYCAdmin. Code;

5) it is a real estate investment trust quali-fied under Sections 856 and 857 of the In-ternal Revenue Code (see section11-603.7 of the NYCAdmin. Code);

6) it entered into a “safe harbor” lease transac-tion under provisions of the Internal Rev-enueCode as it was in effect for agreementsentered into prior to January 1, 1994;

7) it claims a credit for sales and compen-sating use taxes paid in the current yearor is required to adjust its current GeneralCorporation Tax as a result of creditsclaimed in prior years. See the instruc-tions to Form NYC-9.5 and the instruc-tions for Schedule B, lines 6a and 14 formore information.

8) it claims a credit for increased real estatetax payments made to a landlord in con-nection with the relocation of employ-ment opportunities to New York City, asprovided in Section 11-604.13 of theNYCAdmin. Code;

9) it claims a credit for certain costs or ex-penses incurred in relocating employmentopportunities to New York City, as pro-vided in Sections 11-604.14, 11-604.17,11-604.17-b or 11-604.19 of the NYCAdmin. Code. See Instr. to Forms NYC-9.5, NYC-9.6 and NYC-9.8;

10) it claims a modification with respect towages and salaries disallowed as a de-duction for federal income tax purposes(work incentive/jobs credit provisions), asprovided in Section 11-602.8(a)(7) of theNYCAdmin. Code;

11) either separately or as a member of a part-nership, it is engaged in an insurancebusiness as a member of the New YorkInsurance Exchange;

12) it is a Regulated Investment Company asdefined in Section 851 of the InternalRevenue Code (see section 11-603.7 ofthe NYCAdmin. 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 City Un-incorporated Business Tax paid by a part-nership in which it is a partner asprovided in Section 11-604.18 of theNYCAdmin. 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 payments forthe use of intangiblesmade to relatedmem-bers or subtract such payments from relatedmembers. See "Highlights of Recent TaxLaw Changes for Corporations;" or

17) It claims a credit for certain costs incurredin the production of qualified films and tel-evision shows, as provided in Section 11-604.20 of the NYCAdministrative Code.

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

time during its taxable year engage in anyactivity or hold title to real property lo-cated in New York City.

b) A nonstock corporation organized andoperated exclusively for nonprofit pur-poses and not engaged in substantialcommercial activities that has beengranted an exemption by the Departmentof Finance.

c) Corporations subject to taxation underPart 4 of Subchapter 3 of Chapter 6, Title11 (Banking Corporations) or underChapter 11, Title 11 (Utility Corpora-tions) of the NYC Admin. Code are notrequired to file General Corporation Taxreturns. However, corporations that aresubject to tax under Chapter 11 as ven-dors of utility services are subject to theGeneral Corporation Tax in accordancewith section 11-603.4 of the NYCAdmin.Code and must file a return.

d) A limited profit housing corporation or-ganized and operating pursuant to theprovisions of Article Two of the PrivateHousing Finance Law.

e) Insurance corporations.f) AHousing 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 property asdescribed in Sections 501(c)(2) or (25) ofthe 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 NewYork.

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

l) Corporations principally engaged in the

operation of marine vessels whose activ-ities in the City are limited exclusively tothe use of property in interstate or foreigncommerce.

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 after Jan-uary 1, 1998, an alien corporation if its ac-tivities in the City are limited solely toinvesting or trading in stocks and securitiesfor its own account within the meaning ofIRC §864(b)(2)(A)(ii) or investing or trad-ing in commodities for its own accountwithin themeaning of IRC§864(b)(2)(B)(ii)or any combination of these activities. NYCAdmin. Code §11-603.2-a.

NOTE:A corporation that has an officer, em-ployee, agent or representative in the City andthat is not subject to theGeneral CorporationTaxis not required to file a Form NYC-3L or NYC-4S or NYC-4S-EZ but must file a Form NYC-245 (Section 11-605 of the NYCAdmin. Code).

WHENANDWHERE TO FILEThe due date for filing is on or before March17, 2008, or, for fiscal year taxpayers, on orbefore the 15th day of the 3rd month followingthe close of the fiscal year.

Special short-period returns: If this isNOTa final return and your Federal return covereda period of less than 12 months as a result ofyour joining or leaving a Federal consolidatedgroup or as a result of a Federal IRC §338election, this return generally will be due onthe due date for the Federal return and not onthe date noted above. Check the box on thefront 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 au-tomatic extension on Form NYC-6 and paysthe amount properly estimated as its tax. Seethe instructions for Form NYC-6 for informa-tion regarding what constitutes a proper esti-mated tax for this purpose. Failure to pay a


proper estimated amount will result in a denialof the extension. A taxpayer with a valid six-month automatic extension filed on FormNYC-6 may request up to two additionalthree-month extensions by filing Form NYC-6.1. A separate Form NYC-6.1 must be filedfor each additional three-month extension.Mail Forms NYC-6 and 6.1 to the address in-dicated on those forms.

FINALRETURNSIf a corporation ceases to do business in NewYork City, the due date for filing a final GeneralCorporation Tax Return is the 15th day after thedue date of the cessation (Section 11-605 of theNYC Admin. Code). Corporations may applyfor an automatic six-month extension for filinga final return by filing Form NYC-6F,Applica-tion for Extension to File Final Return. Any taxdue must be paid with the final return or the ex-tension, whichever is filed earlier.

ACCESSING NYC TAX FORMSBy Computer - Download forms from the Fi-nance website at nyc.gov/financeBy Phone - Order forms through Finance’sform ordering service, by calling 212-504-4035, and receive forms in the mail.

OTHER FORMS YOUMAY BEREQUIRED TO FILEFORMNYC-6 OR NYC-6F -Application forAutomatic Extension for General CorporationTax is an application for a six-month extensionof time to file a tax return. File it on or beforethe due date of the return. If the corporationceased to be subject to tax during 2007, useForm NYC-6F to request an extension to filea final return.FORMNYC-6.1 -Application forAdditional Ex-tension for General Corporation Tax is a requestfor an additional threemonths of time to file a re-turn. A corporation with a valid six-month ex-tension is limited to two additional extensions.FORM NYC-8 - General Corporation TaxClaim for Credit or Refund is used to claim arefund of General Corporation Tax. Pleasenote that it no longer can be used to file anamended return.FORM NYC-222 - Underpayment of Esti-mated Tax by Corporations will help a corpo-ration 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 representa-tive in the City but disclaims liability for theGeneral Corporation Tax.FORMNYC-399 - Schedule of NewYork CityDepreciation Adjustments is used to compute

the allowable New York City depreciation de-duction if a federalACRS or MACRS depreci-ation deduction is claimed for certain propertyplaced in service after December 31, 1980.FORMNYC-399Z - DepreciationAdjustmentsfor Certain Post 9/10/01 Property may have tobe filed by taxpayers claiming depreciation de-ductions for certain sport utility vehicles or"qualified property," other than "qualified NewYork Liberty Zone property" and "qualifiedNew York Liberty Zone leasehold improve-ments" placed in service after September 10,2001 for Federal or New York State tax pur-poses. See, Finance Memorandum 07-3 datedSeptember 24, 2007 “Application of IRC §280FLimits to Sports Utility Vehicles” and FinanceMemorandum 02-3 (Revised) "NewYork CityTax Consequences of Certain Retroactive Fed-eral and NewYork Tax Law Changes".FORM NYC-400 - Declaration of EstimatedTax by General Corporations must be filed byany corporation whose New York City tax li-ability can reasonably be expected to exceed$1,000 for the 2008 calendar year or fiscalyear beginning in 2008.FORM NYC-3360 - General Corporation TaxReport of Change in Tax base made by the In-ternal Revenue Service and/or NewYork StateDepartment of Taxation and Finance is usedfor reporting adjustments in taxable income orother basis of tax resulting from an audit ofyour federal corporate tax return and/or Stateaudit of your State corporate tax return.FORM NYC-CR-A - Commercial Rent TaxAnnual Return must be filed by every tenantthat rents premises for business purposes inManhattan south of the center line of 96thStreet and whose annual or annualized grossrent for any premises is at least $200,000. (Ef-fective June 1, 2001.)FORM NYC-RPT - Real Property TransferTax Return must be filed when the corporationacquires or disposes of an interest in real prop-erty, including a leasehold interest; when thereis a partial or complete liquidation of the cor-poration that owns or leases real property; orwhen there is a transfer of a controlling eco-nomic interest in a corporation, partnership ortrust that owns or leases real property.

ESTIMATED TAXIf the tax for the period following that coveredby this return is expected to exceed $1,000, adeclaration of estimated tax and installmentpayments are required. Form NYC-400 is tobe used for this purpose. If the tax on this re-turn exceeds $1,000, Form NYC-400 will au-tomatically be mailed to you.If, after filing a declaration, your estimated taxsubstantially increases or decreases as a resultof a change in income, deduction or allocation,you must amend your declaration on or before

the next date for an installment payment. Theprocedure is as follows:� Complete the amended schedule of the no-

tice of estimated tax due. (This is your quar-terly notice for payment of estimated tax.)

� Mail the bottom portion of the noticealong with your check to:NYC Department of FinanceP.O. Box 5100Kingston, NY 12402-5100

If the amendment is made after the 15th day ofthe 9th month of the taxable year, any increase intax 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 of tax(i.e., if the amount of the understatement ex-ceeds the greater of 10% of the tax required tobe shown on the return or $5,000) for any tax-able year, a penalty will be imposed equal to10% of the amount of the understated tax.The amount on which you pay the penalty canbe reduced by subtracting any item for which(1) there is or was substantial authority for theway in which the item was treated on the re-turn, or (2) there is adequate disclosure of therelevant facts affecting the item’s tax treatmenton the return or in a statement attached to thereturn.

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 Business Infor-mation. You can obtain this form by callingTaxpayer Assistance at (212) 504-4036. Youcan also visit our Internet website at the fol-lowing address: nyc.gov/finance.

FOREIGNAIRLINESRetroactive to tax years beginning on or afterJanuary 1, 1989, foreign airlines that have aforeign air carrier permit pursuant to Section402 of the Federal Aviation Act of 1958 arepermitted to exclude from entire net incomethe following items:� all income from the international opera-

tion of aircraft, even though effectivelyconnected with the conduct of a trade orbusiness in the United States

� income from outside the United States thatis derived from the operation of aircraft

� certain passive income derived fromsources outside the United States

The above exclusions are permitted providedthat the foreign country in which the airline isbased and organized grants a similar or greater


exemption from tax with respect to UnitedStates airlines. For more information, seeAdmin. Code Section 11-602.8 (c-1).For taxable years beginning on or after Janu-ary 1, 1994, property, receipts and wages,salaries or other personal service compensa-tion directly attributable to the generation ofincome described above not included in entirenet income under Admin. Code Section 11-602.8 (c-1) are excluded when calculating thebusiness 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 airlines,assets (and the liabilities directly or indirectlyattributable to those assets) employed in gen-erating the income excluded from entire netincome are excluded. (SeeAdmin. Code Sec-tions 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 gross receiptsfrom charges for the provision of mobiletelecommunications services to customers willbe taxed as if they were regulated utilities forpurposes of the NewYork City Utility Tax andGeneral Corporation Tax. Thus, such entitieswill be subject to only the NewYork City Util-ity Tax. The amount of gross income subjectto tax has been amended to conform to theFederal Mobile Telecommunications Sourc-ingAct of 2000. In addition, for tax years be-ginning on and after August 1, 2002, partnersin any such entity will not be subject to Gen-eral Corporation Tax on their distributiveshare of the income of any such entity.

SIGNATUREThis report must be signed by an officer au-thorized 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 duly au-thorized to act on behalf of the taxpayer.

TAX PREPARERSAnyone who prepares a return for a fee mustsign the return as a paid preparer and enter hisor her Social Security Number or PTIN. SeeFinance Memorandum 00-1. Include the com-pany or corporation name and Employer Iden-tification Number, if applicable.

PreparerAuthorization: If you want to allowthe Department of Finance to discuss your re-turn with the paid preparer who signed it, youmust check the "yes" box in the signature areaof the return. This authorization applies only tothe individual whose signature appears in the"Preparer's Use Only" section of your return.

It does not apply to the firm, if any, shown inthat section. By checking the "Yes" box, youare authorizing the Department of Finance tocall the preparer to answer any questions thatmay arise during the processing of your return.Also, you are authorizing the preparer to:� Give the Department any information

missing from your return,� Call the Department for information about

the processing of your return or the statusof your refund or payment(s), and

� Respond to certain notices that you haveshared with the preparer about math er-rors, offsets, and return preparation. Thenotices will not be sent to the preparer.

You are not authorizing the preparer to re-ceive any refund check, bind you to anything(including any additional tax liability), or oth-erwise represent you before the Department.The authorization cannot be revoked, how-ever, the authorization will automatically ex-pire no later than the due date (without regardto any extensions) for filing next year's return.Failure to check the box will be deemed adenial of authority.

SPECIFIC INSTRUCTIONSCheck the box marked "yes" on page 1 of thisform if, on your federal return: (i) you reportedbonus depreciation and/or a first year expense de-duction under IRC§179 for "qualifiedNewYorkLibertyZone property," "qualifiedNewYorkLib-erty Zone leasehold improvements," or "qualifiedResurgence Zone property," regardless ofwhether you are required to file formNYC-399Z,(ii) you claimed a federal targeted jobs credit forLiberty Zone business employees, or (iii) you re-placed property involuntarily converted as a resultof the attacks on the World Trade Center duringthe five (5) year extended replacement period.Youmust attach Federal forms 4562, 4684, 4797and 8884 to this return. See instructions forSchedule B, lines 6d, 15, and 16 for more infor-mation.SCHEDULEA

NOTE - ELIGIBLE SMALLFIRMSFor tax years beginning in 2007, taxpayers areexempt from having to determine the alterna-tive tax on capital and the alternative tax on theentire net income plus compensation if theyhave: (1) gross income, as defined under § 61 ofthe Internal Revenue Code, of less than$250,000, (2) a 100% business allocation per-centage, and (3) no investment capital or in-come or subsidiary capital or income. Seesection 11-604(1)(I) ofAdministrative Code, asadded by L. 2007, ch. 491. Those taxpayers aresubject to tax on the larger of the tax on entirenet income and fixed-dollar minimum tax.Therefore, taxpayers meeting these criteria,may skip Lines 2a, 2b, 2c and line 3 of Sched-

uleA. The amount entered on line 6 of Sched-ule A should be the larger of line 1 or line 4.Because these taxpayers have a 100% businessallocation percentage and are not subject to thetax on capital, these taxpayers also will not berequired to complete Schedules E or G of thisform.In addition, for purposes of computing thetax based on entire net income, eligible cor-porations (other than New York State S cor-porations) can elect to use the sum of NewYork State entire net income, as determinedunder New York State Law §208, and anydeductions taken for the taxable year in com-puting federal taxable income for GeneralCorporation Tax paid or accrued, rather thanreport the New York City specific modifica-tions normally required to compute NewYork City taxable income. Corporationsmaking that election should enter the NewYork State entire net income on Line 1 ofSchedule B, skip lines 2 through 5a ofSchedule B, enter the amount of the GeneralCorporation Tax deducted on the federal re-turn on line 5b of Schedule B, skip lines 6through 18 and enter the sum of Line 1 andline 5b on line 19.

Computation of Tax

LINES 2a AND 2b - TAX ONALLOCATED CAPITALFor cooperative housing corporations as de-fined in the Internal Revenue Code, the rate oftax on capital is 4/10 mill (.04%) instead of 11/2 mills (.15%). For all other corporationssubject to tax, including housing companiesorganized and operating pursuant to ArticleFour of the Private Housing Finance Law(other than cooperative housing corporations),the rate of tax on capital is 1 1/2 mills (.15%).Enter the amount from Schedule E, line 14 inthe left-hand column of line 2a or line 2b.Multiply by the applicable percentage andenter the tax in the right-hand column. If thatamount exceeds $350,000, enter $350,000.See instructions for Schedule E, lines 7-11 forinformation on how to calculate capital forshort tax years.

LINE 3 - ALTERNATIVE TAXEvery taxpayer, other than a real estate invest-ment trust or regulated investment company,or taxpayers exempt under section 11-604(1)(I) ofAdministrative Code as describedabove, must calculate its alternative tax andenter its computation on line 3. To compute thealternative tax, measured by entire net incomeplus compensation, you may use the work-sheet on page 6 of Form NYC-3L. Profes-sional corporations must calculate thealternative tax.For special treatment of “Eligible SmallFirms” see instructions above.


ADDITIONAL INFORMATION FORCOMPUTINGTHEALTERNATIVETAX.ALTERNATIVE TAXWORKSHEETa) Line 1- Net Income. Enter the amount on

Schedule B, line 19 or 20. If the amountentered on Schedule B line 19 is 0 becausethe amount that would have been enteredon that line would have been as a loss (i.e.the amount on Schedule B, line 18 wasgreater than the amount on Schedule B,line 8), enter the amount of this loss onLine 1.

b) 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%ofall salaries and compensation of stock-holders owning more than 5% of thecorporation’s stock, as deducted for fed-eral tax purposes and reported onSchedule F, regardless of whether suchstockholders are also officers. In deter-mining whether a stockholder owns morethan 5% of the issued capital stock, includeall classes of voting and nonvoting stock,issued and outstanding.

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

d) Line 4 - For taxable years beginning onor after 7/1/98, enter $40,000. If the re-turn does not cover an entire year, the ex-clusion must be prorated based on periodcovered by the return.

e) Line 6- For tax years beginning in 2007,the alternative tax measured by entire netincome plus compensation is determinedby multiplying line 5 by 26.25 percent, in-stead of 30 percent. See Chapter 491 ofthe Laws of 2007.

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 GeneralCorporation Tax for Unincorporated BusinessTax paid by partnerships from which you re-ceive a distributive share or guaranteed pay-ment that you include in calculating GeneralCorporation Tax liability on either the entirenet income or income plus compensation base.(Attach Form NYC-9.7.)

LINE 8a - CREDITS FROMFORM NYC-9.5Enter on this line the following credits againstthe General Corporation Tax:

1) Relocation and employment assistanceprogram (REAP) credit (Attach FormNYC-9.5.)

2) Sales and compensating use taxes (Referto instructions on Form NYC-9.5 and at-tach form.)NOTE: This credit may only be taken forsales tax paid in the current year for certainpurchases in certain prior periods.

LINE 8b – CREDITS FROMFORM NYC-9.8Enter on this line the credit against the GeneralCorporation Tax for the new Lower Manhattanrelocation and employment assistance program.(Attach Form NYC-9.8.)

LINE 9a - CREDITS FROMFORM NYC-9.6Real estate tax escalation credit and employ-ment opportunity relocation costs credit andindustrial business zone credit (Refer to in-structions 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 11b isrequired as payment on account of estimated taxfor the 2008 calendar year, if a calendar year tax-payer, or for the taxable year beginning in 2008,if a fiscal year taxpayer.

LINE 12 - SALES TAXADDBACKThis 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 taxpayerreceived a credit or refund of any such salesor compensating use taxes during the yearcovered by this return for which it claimed aGeneral Corporation Tax credit in a prior taxperiod, the amount of such credit or refundmust be added back at line 12. A correspon-ding adjustment is to be made at line 14 onSchedule B. (Refer to instructions to line 14on 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 both thecarryover credit and the first installment re-ported on the prior tax period’s return. Thisfigure should be obtained from the Composi-tion of Prepayments Schedule on page 6 ofForm NYC-3L.

LINE 17a - LATE PAYMENT - INTERESTIf the tax is not paid on or before the due date(determined without regard to any extensionof time), interest must be paid on the amountof the underpayment from the due date to thedate paid. For information as to the applica-ble rate of interest, call: (212) 504-4036 orsee the Department of Finance website at:http://home2.nyc.gov/html/dof/html/busi-ness/business_tax_interest.shtml.

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

fail to file this form when due, unless thefailure is due to reasonable cause. Forevery month or partial month that thisform is late, add to the tax (less any pay-ments made on or before the due date)5%, up to a total of 25%.

b) If this form is filed more than 60 days late,the above late filing penalty cannot be lessthan the lesser of (1) $100 or (2) 100% ofthe amount required to be shown on theform (less any payments made by the duedate or credits claimed on the return).

c) A late payment penalty is assessed if youfail to pay the tax shown on this form bythe prescribed filing date, unless the fail-ure is due to reasonable cause. For everymonth or partial month that your paymentis late, add to the tax (less any paymentsmade) 1/2%, up to a total of 25%.

d) The total of the additional charges in a) andc) may not exceed 5% for any one monthexcept as provided for in b).

If you claim not to be liable for these additionalcharges, attach a statement to your return ex-plaining the delay in filing, payment or both.

LINE 17c - PENALTY FOR UNDERPAY-MENT 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 tax due.(For complete details, refer to Form NYC-222,Underpayment of Estimated Tax by Corpora-tions.) If you underpaid your estimated tax,use Form NYC-222 to compute the penalty.Attach Form NYC-222. If no penalty is due,enter “0” on line 17c.

LINE 21 - TOTALREMITTANCEIf the amount on line 15 is greater than zero orthe amount on line 19 is less than zero, enteron line 21 the sum of line 15 and the amount,if any, by which line 18 exceeds the amounton line 16. After completing this return, enterthe amount of your remittance on line A. Thismust be the full amount as shown on line 21.All remittances must be payable in U.S. dol-lars drawn on a U.S. bank. Checks drawn onforeign banks will be rejected and returned.


Remittances must be made payable to theorder of NYC Department of Finance.

LINE 22 - NEWYORK CITY RENTIf the corporation is carrying on business bothinside and outside New York City, completeSchedule G and enter on line 22 of ScheduleAtotal rent from Schedule G, part 1. If the cor-poration is only carrying on business in NewYork City, enter the total rent deducted on thefederal return for premises located in the City.Rent includes consideration paid for the use oroccupancy of premises as well as paymentsmade to or on behalf of a landlord for taxes,charges, insurance or other expenses normallypayable by the landlord other than for the im-provement, repair or maintenance of the ten-ant’s premises.

SCHEDULE BComputation and Allocation of Entire NetIncomeLINE 1 - FEDERALTAXABLE INCOMEEnter your federal taxable income (before netoperating loss and special deductions) as re-quired to be reported on your federal tax return.If you file federal Form 1120, use the amountfrom line 28.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 subchapter Ssubsidiaries (QSSS) must file returns as or-dinary corporations. If you are an S corpo-ration filing on Form 1120S or a QSSS, youmust report on line 1 the amount you wouldhave had to report as taxable income wereyou not a federal S corporation or QSSS.Enter at Schedule B, line 1, the total amount ofincome reported on lines 1 through 10 of thefederal form 1120S, Schedule K, less the totalamount of deductions reported on lines 11through 12d of that Schedule. In addition, in-clude other items and amounts that are re-quired to be reported separately toshareholders and not numerically included onfederal Schedule K, but attached in a separateschedule.NOTE: The charitable contribution deduc-tion from federal Form 1120S, Schedule K,line 12a may not exceed 10% of the sum oflines 1 through 12e (other than line 12a) ofSchedule K.

ELIGIBLE SMALLFIRMS: Eligible SmallFirms that elect to use New York State entirenet income as described on Page 5 of the in-structions should enter the NewYork State en-tire net income on Line 1 of Schedule B, skiplines 2 through 5a of Schedule B, enter the

amount of the General Corporation Tax de-ducted on the federal return on line 5b ofSchedule B, skip lines 6 through 18 and enterthe sum of Line 1 and line 5b on line 19.

LINE 2 - NONTAXABLE INTERESTInclude all interest received or accrued whichwas not taxable on your federal income taxreturn.

LINES 3AND 4 - SUBSIDIARYCAPITALA 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’s vot-ing capital stock, issued and outstanding. Theterm “subsidiary capital” means all invest-ments in the stock of subsidiary corporations,plus all indebtedness from subsidiary corpora-tions (other than accounts receivable acquiredin the ordinary course of business for servicesrendered or from sales of property held pri-marily for sale to customers), whether or notevidenced by bonds or other written instru-ments, on which interest is not claimed and de-ducted by the subsidiary for purposes oftaxation under Title 11, Chapter 6, Subchap-ters 2 and 3 of the Admin. Code.If you have a subsidiary, complete lines 3 and4, and attach a list of all items included. Youwill also have to complete Schedule C. If youdo not have a subsidiary, enter “0” on lines 3and 4.On line 3, enter total of amounts, including in-terest expense, deducted in computing federaltaxable income that are directly attributable tosubsidiary capital or to income, gains or lossesfrom subsidiary capital. Include capital lossesfrom sales or exchanges of subsidiary capital,all other losses, bad debts and any carryingcharges attributable to subsidiary capital.On line 4, enter all amounts, including interest,that are indirectly attributable to subsidiarycapital or to income, gains or losses from sub-sidiary capital.For more information, see also Statement ofAudit Procedure 96-1-GCT, Noninterest Ex-pense Attribution, January 29, 1996, availableon the Department's website (nyc.gov/fi-nance).

LINE 5 - STATEAND LOCALINCOME TAXESOn line 5a enter the amount deducted on yourfederal return for income taxes paid or accruedto any state, any political subdivision of a stateor to the District of Columbia, if they are on ormeasured by profits or income or includeprofits or income as a measure of tax, includ-ing taxes expressly in lieu of any of the fore-going taxes. Include the New York StateMetropolitan Transportation Business Tax sur-charge.

On line 5b enter the amount of NewYork CityGeneral Corporation Tax and Banking Corpo-ration Tax deducted on your federal return.Attach a schedule listing each locality and theamount of all those taxes deducted on yourfederal return.

LINES 6a, 6b, 6c AND 6d -NEWYORK CITYADJUSTMENTSa) The credit for sales tax paid on electric-

ity or electric service used in the produc-tion of certain tangible property formerlyallowed by Admin. Code §11-604.15 hasbeen repealed for purchases on or afterNovember 1, 2000. No amount should beadded back with respect to this credit.Purchases of machinery or equipment forwhich a credit is allowed byAdmin. Code§11-604.12 were exempted from sales taxeffective December 1, 1989. Purchasesof certain services performed on machin-ery or equipment used in production forwhich a credit is allowed byAdmin. Code§11-604.17-a were exempted from salestax effective September 1, 1996. Creditsmay be taken under these two provisionsonly if 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, thesales tax excluded or deducted for federaltax purposes should be added back. Ifyou are claiming a credit pursuant to §11-604.12, a form NYC 9.5 for the year 1990or a prior year should be used. If you areclaiming a credit pursuant to §11-604.17-a, a form NYC 9.5 for the year 2000 or aprior year should be used.

b & c) Taxpayers claiming the real estate tax es-calation credit and/or the employment op-portunity relocation costs credit or theindustrial business zone credit must enteron lines 6(c) and 6(b), respectively theamounts shown on lines 4 and 5, respec-tively, of Part II of Form NYC-9.6.

d) The Federal bonus depreciation allowedfor "qualified property," as defined in theJob Creation and Worker Assistance Actof 2002 is not allowed for General Cor-poration Tax purposes except for suchdeductions allowed with respect to"qualified New York liberty zone prop-erty", "qualified New York liberty zoneleasehold improvements" and "qualifiedproperty" placed in service in the Resur-gence Zone (generally the area in theborough of Manhattan South of HoustonStreet and North of Canal Street.) ForCity tax purposes, depreciation deduc-tions for all other "qualified property"must be calculated as if the property wasplaced in 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 purposes ofthe New York State farmers' school taxcredit), the amount allowed as a deduc-tion with respect to a sport utility vehiclethat is not a passenger automobile forpurposes of section 280F(d)(5) of the In-ternal Revenue Code is limited to theamount allowed under section 280F ofthe Internal Revenue Code as if the ve-hicle were a passenger automobile as de-fined in that section. For SUVs that arequalified property other than qualifiedResurgence Zone property and otherthan New York Liberty Zone property,the amount allowed as a deduction is cal-culated as of the date the SUV was actu-ally placed in service and not as ofSeptember 10, 2001. On the dispositionof an SUV subject to the limitation, theamount of any gain or loss included inincome must be adjusted to reflect thelimited deductions allowed for City pur-poses under this provision. Enter onSchedule B, line 6(d) and 16 the appro-priate adjustments from form NYC-399Z. See Finance Memorandum 07-3dated September 24, 2007 “Applicationof IRC §280F Limits to Sports UtilityVehicles.”The federal depreciation deduction com-puted under the Accelerated Cost Recov-ery System or Modified Accelerated CostRecovery System (IRC Section 168) is notallowed for the following types of property:� property placed in service in New

York State in taxable years beginningbefore January 1, 1985 (except re-covery property subject to the provi-sions of Internal Revenue CodeSection 280-F)

� property of a taxpayer principally en-gaged in the conduct of an aviation,steamboat, ferry, or navigation busi-ness, or two or more such businesseswhich is placed in service in taxableyears beginning after December 31,1988, and before January 1, 1994.

In place of the federal depreciation de-duction, a depreciation deduction usingpre-ACRS or MACRS rules (IRC Sec-tion 167) is allowed. Enter on line 6d theACRS adjustment from Form NYC-399,Schedule C, line 8, Column A. Enter online 16 the ACRS adjustment from FormNYC-399, Schedule C, line 8, Column B.ACRS and MACRS may be available forproperty placed in service outside New

York in years beginning after 1984 andbefore 1994. See Finance Memorandum99-4 “Depreciation for Property Placed inService Outside New York After 1984and Before 1994”.

LINE 7a - PAYMENT FOR USEOF INTANGIBLESAdd 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 - OTHERADDITIONSa) Effective for taxable years beginning on

or after January 1, 1982, the New YorkCity Admin. Code was amended to nul-lify the effects of federal “safe harborleases” upon New York City taxable in-come (Section 11-602.8(a)(8) and (9) oftheAdmin. Code). This applies to agree-ments entered into prior to January 1,1984.Any amount included in the computationof federal taxable income solely as a re-sult of an election made under IRC Sec-tion 168(f)(8) must be removed whencomputing New York City taxable in-come. Any amount excluded in the com-putation of federal taxable income solelyas a result of an election made under IRCSection 168(f)(8) must be included whencomputing New York City taxable in-come.Exempt from these adjustments are leasesfor qualified mass commuting vehiclesand property of a taxpayer, subject to theGeneral Corporation Tax, principally en-gaged in the conduct of an aviation,steamboat, ferry or navigation business,or two or more such businesses, which isplaced in service before taxable years be-ginning in 1989.Enter the appropriate additions and de-ductions on lines 7 and 17, respectively,and attach a rider to show the “safe har-bor” adjustments to New York City tax-able income.

b) Foreign taxes paid or accrued that are de-ducted from gross income to determinefederal taxable income must be added toentire net income. A foreign tax creditmay not be used as a deduction whencomputing NYC entire net income.

c) Any “windfall profit” tax deducted incomputing federal income must be addedback when computing NYC entire net in-come.

d) If the taxpayer deducted on its federal re-turn interest paid to a corporate stock-

holder owningmore than 50% of its issuedand outstanding stock, that corporateshareholder may not exclude that interestfrom its NYC entire net income as incomefrom subsidiary capital. (See instructionsfor lines 3, 4 and 9.) To enable a more than50% corporate shareholder to treat anysuch interest as excludible income fromsubsidiary capital, such interest should beadded back on line 7 of this return in com-puting NYC entire net income.

e) In the case of a taxpayer organized out-side the United States, all income fromsources outside the United States, less allallowable deductions attributable thereto,that was not taken into account in com-puting federal taxable income must beadded back in computing NYC entire netincome.

LINES 9a AND 9b - INCOME FROMSUBSIDIARY CAPITALEnter on line 9a dividends, capital gains andother income and gain from subsidiary capitalthat was included as part of federal taxable in-come. Complete Schedule C.Enter on line 9b interest from subsidiary cap-ital that was included in federal taxable in-come. Do not enter on line 9b interest forwhich the payor subsidiary claimed a deduc-tion. (See instructions for Schedule B, lines 3and 4, above, for the definition of subsidiarycapital.)

LINE 10 - NONSUBSIDIARYDIVIDENDSEnter 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 period require-ment set forth in IRC Section 246(c). Regu-lated investment companies and real estateinvestment trusts do not qualify for this de-duction.

LINE 11 - NET OPERATING LOSSEnter NewYork City net operating loss carry-forward from prior years. The following rulesapply to net operating losses.1) A deduction may only be claimed for netoperating losses sustained in taxable yearsduring all or part of which the corporationwas subject to the General CorporationTax. New York City allows net operatinglosses to be used in the same manner asprovided by IRC Section 172. However,the amount of any federal loss must be ad-justed in accordance with Section 11-602.8(f) of the Admin. Code. Regulatedinvestment companies and real estate in-vestment trusts do not qualify for this de-duction.


2) The deduction of a net operating loss car-ryforward from prior years may not ex-ceed, and is limited to, the amount of thecurrent year’s federal taxable income. Anet operating loss may not be claimed as adeduction if Schedule B, line 1 reflects aloss.

3) The deduction shall not exceed the deduc-tion that would have been allowed if thetaxpayer had not made an election to be anS Corporation under the rules of the Inter-nal Revenue Code or had not elected to beincluded in a group reporting on a consoli-dated basis for federal income tax purposes.

4) The New York City net operating loss de-duction taken for City purposes for eachyear may not exceed the deduction allow-able for that year for federal income taxpurposes calculated as if the taxpayer hadelected to relinquish the carryback periodexcept with respect to the first $10,000 ofeach year’s loss. The carryback period forGeneral Corporation Tax purposes corre-sponds to the federal carryback period. Ifthe taxpayer elects to use a 2-year carry-back period for federal purposes, the samecarryback period applies for City purposes.If the taxpayer elects to relinquish the en-tire carryback period for federal purposes,then the taxpayer may not carryback anyamount for City purposes. See instructionsfor Forms NYC-8 and NYC-8CB for moreinformation.

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 purposes,generally 20 years subsequent to the lossyear for losses incurred in taxable years be-ginning after August 5, 1997.

6) Corporations principally engaged in theconduct of an aviation, steamboat, ferry ornavigation business or two or more of suchbusinesses are permitted to claim a net op-erating loss deduction in the same manneras other corporations.These corporations are allowed to carryforward any net operating losses or a pro-portionate part of a net operating loss sus-tained during the federal taxable period(s)covering the years 1985 through 1988, pro-vided the corporation was taxable underTitle 11, Chapter 6, Subchapter 4 of theAdmin. Code (Transportation CorporationTax) for the calendar years 1985 throughand including 1988. The net operating lossmust be computed as if:a) the corporation had been subject to

taxation under Subchapter 2 (GeneralCorporation Tax) during the period(s)the loss was sustained,

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

the entire carryback period under IRCSection 172.

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

7) Corporations reporting both business andinvestment income must complete line 22of this schedule to apportion any net oper-ating loss between business income and in-vestment income.

Attach a copy of the schedule supporting thededuction claimed on line 29(a) on page 1 ofyour federal Form 1120.

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 as anet operating loss deduction in any prior yearmust be made separately on Form NYC-8CBor Form NYC-8. Do not attach or mail a FormNYC-8CB or FormNYC-8 with the tax return.This request must be submitted within threeyears of the due date of the return for the lossyear or within the period prescribed in Section11-678 of theAdmin. Code. Corporations thathave elected to relinquish the carryback periodfor a net operating loss incurred in taxableyears beginning afterAugust 5, 1997 must sub-mit a copy of the federal election.Because an S corporation does not carry overNOLs, it will not have made a federal electionto relinquish any or all of its carryback period.Therefore, for City tax purposes for lossesarising in taxable years ending in or after 2002,it will be presumed that, unless the taxpayer Scorporation attached a statement to this returnindicating that the taxpayer intends to carryback the loss, the taxpayer is presumed to haveelected to relinquish the entire carryback pe-riod. For S corporations filing on a combinedbasis only with other S corporations or quali-fied Subchapter S subsidiaries, any statementattached either to a proforma NYC-3L or to theNYC-3Awill be deemed applicable to the en-tire group. Any excess net operating loss maybe carried forward as if the taxpayer hadelected to relinquish the entire carryback pe-riod 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 prima-rily for sale to customers in the ordinary

course of trade or business or accounts ornotes receivable acquired in the ordinarycourse of trade or business). The amount of thededuction with respect to each such property isequal to the difference between:a) the amount of the taxpayer’s federal tax-

able income; andb) the amount of the taxpayer’s federal tax-

able income (if smaller than the amountdescribed in(a)), computed as if the federaladjusted basis of each such property (onthe sale or other disposition of which gainwas realized) on the date of the sale orother disposition had been equal to either:1) its fair market value on January 1,

1966, or the date of its sale or otherdisposition prior to January 1, 1966,plus or minus all adjustments tobasis made with respect to suchproperty for federal income tax pur-poses for periods on or after January1, 1966; or

2) the amount realized from its sale orother disposition, whichever is lower.

In no event, however, shall the total amountcomputed above exceed the taxpayer’s net gainfor the year from the sale or other dispositionof property (other than stock in trade, inventory,property held primarily for sale to customers inthe ordinary course of trade or business, or ac-counts or notes receivable acquired in the ordi-nary course of trade or business).Attach a rider showing computation and acopy of federal Form 1120 or 1120-S, Sched-ule D.

LINE 13 - CITYAND STATE REFUNDSEnter at line 13 refunds or credits of the NewYork City General Corporation Tax, NewYorkState Franchise Tax or NewYork City or StateBanking Corporation Tax for which no tax ex-clusion or deduction was allowed in deter-mining the taxpayer’s taxable (entire) netincome in a prior year.

LINE 14 - SALES TAX REFUNDSAND CREDITSThis line relates to credits or refunds of salesand compensating use tax paid on certain ma-chinery and equipment and/or certain servicesincluded in federal taxable income for which acredit was claimed in a prior year. The amountentered here should be the same as the amountentered at line 12 of ScheduleA. (Refer to in-structions 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 of cer-tain tangible property for which the taxpayertook a credit in a prior period under Adm.Code §11-604.15.


LINE 15 - FEDERAL JOBS CREDITEnter the portion of wages and salaries paid orincurred for the taxable year for which a de-duction is not allowed pursuant to the provi-sions of Section 280C of the Internal RevenueCode because the federal targeted jobs taxcredit was taken. Attach Federal Form 5884 or8884 for Liberty Zone business employees.The New York Liberty Zone business em-ployee credit is only available for wages paidor incurred during the current taxable year forwork performed in 2002 or 2003.

LINE 16 - DEPRECIATIONADJUSTMENTEnter 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 INCOMEFROM INTANGIBLESSubtract income such as royalties from relatedmembers for the use of intangibles as de-scribed in section 11-602.8(n) of the Admin-istrative Code. See "Highlights of Recent TaxLaw Changes for Corporations."

LINE 17b - OTHER DEDUCTIONSa) Refer to instructions toScheduleB, line 7 for

adjustments relating to safe harbor leases.b) Taxpayers entitled to a special deduction

for construction, reconstruction, erection orimprovement of air pollution control facil-ities initiated on or after January 1, 1966,and having a situs in NYC in accordancewith Section 11-602.8(g) should submit arider showing the complete computation.Enclose certification of compliance issuedpursuant to Section 17-0707 or Section 19-0309 of the Environmental ConservationLaw. Entire net income for the current yearand all succeeding years must be computedwithout any deduction for such expendi-tures or for depreciation of such property.

c) Deduct foreign dividend gross-up pursuantto Section 78 of the IRC (see federal Form1120, Schedule C, line 15) to the extent notdeducted at line 9a. Entire net income doesnot include any amount treated as divi-dends pursuant to Section 78 of the IRC.

d) Regulated investment companies mustdeduct dividends paid to stockholders onthis line.

LINE 19 – ENTIRE NET INCOMEIf line 18 is greater than line 8 so that theamount on this line would be a loss, enter zero(“0”) on this line, skip lines 22 through 26, andenter zero (“0”) on line 27 of this Schedule Band on line 1 of ScheduleA. That loss may beavailable as a carryover. See instructions toSchedule B, Line 11, for more information.

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

United States must enter at line 20 its en-tire net income wherever earned, includ-ing all income from sources outside theUnited States, less all allowable deduc-tions attributable thereto, not taken intoaccount in computing federal taxable in-come. Attach Schedule. See “FOREIGNAIRLINES” under GENERAL INFOR-MATION, above.

b) If you are, either separately or as a mem-ber of a partnership, doing insurancebusiness as a member of the New YorkInsurance Exchange described in Section6201 of the Insurance Law, make the ad-justment required under Section 11-602.8(a)(6) and Section 11-602.8(b)(8) of theAdmin. Code.

c) For tax years beginning on or after August1, 2002, corporations that are partners inpartnerships that receive at least eightypercent of their gross receipts from pro-viding mobile telecommunications serv-ices must exclude their distributive shareof income, gains, losses and deductionsfrom any such partnership, including theirshare of separately reported items, fromtheir federal taxable income reported online 1. See "Highlights of Recent TaxLaw Changes for Corporations", supra.

LINE 21 - INVESTMENT INCOMEInvestment income includes: 50% of dividendsfrom non-subsidiary stocks held for investment;interest from investment capital; net capital gainor loss from sales or exchanges of nonsub-sidiary securities held for investment; and in-come from cash if an election is made to treatcash as investment capital on line 3 of ScheduleD. Do not include any “gross-up” dividendspursuant to Section 78 of the IRC that havebeen deducted in computing entire net income.Investment income includes interest receivedon a loan to a subsidiary if the subsidiaryclaims such interest as a NYC General orBanking Corporation Tax deduction on any re-turn for any period, and if such loan is evi-denced by a bond or other corporate security.Do not include any capital loss which was notused in computing federal taxable income.In computing investment income, subtract theamount of deductions allowable in computingentire net income which are directly or indi-rectly attributable to investment capital or in-vestment income.

LINE 21a - DIVIDENDSEnter dividends not excluded on line 10 ex-cept for “gross-up” dividends pursuant to Sec-tion 78 of the IRC. This includes 50% ofdividends from nonsubsidiary corporationsfor which an exclusion was allowed on line10 of this schedule and 100% of dividendsfrom stock not meeting the holding period re-quirement set forth in Section 246(c) of theIRC.

LINE 21d - INCOME FROM CASHEnter income from cash on Schedule B, line21d, only if you have elected to treat cash asinvestment capital and have entered theamount thereof on Schedule D, line 3.

LINE 21f - DEDUCTIONSATTRIBUTABLE TOINVESTMENT INCOMEFor more information, see Statement of AuditProcedure 96-1-GCT, Noninterest ExpenseAt-tribution, January 29, 1996 and Statement ofAudit Procedure 04-02-AU, GCT & UBTTreatment of RepurchaseAgreements and Se-curities Lending and Borrowing Transactionsfor Financial Services Firms Regularly En-gaged in SuchActivities, September 24, 2004,available on the Department’s website atnyc.gov/finance.

LINE 22 - APPORTIONED NEWYORK CITY NET OPERATINGLOSS DEDUCTIONCorporations that report both business and in-vestment income must apportion any net op-erating loss deduction on line 11 betweenbusiness income and investment income. Thisis computed by multiplying the net operatingloss deduction by a ratio. The ratio is a frac-tion, the numerator of which consists of in-vestment income before deducting any netoperating loss and the denominator of which isentire net income before deducting any net op-erating loss. The ratio may be expressed as apercentage. Multiply the net operating lossdeduction by the result. Enter this amount online 22.

LINE 23b – INVESTMENT INCOMETO BEALLOCATEDEnter the amount from line 23a. If the amounton line 23a is greater than the amount on line19 or 20, enter the amount from line 19 or 20.If the entry on line 23a is a loss, enter zero(“0”) on line 23b.

LINE 25 - ALLOCATEDINVESTMENT INCOMEIf the investment allocation percentage is zero,interest on bank accounts must be multipliedby the business allocation percentage.


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 asubsidiary and subsidiary capital.)

Complete Schedule D if you have investmentcapital. Investment capital is the average valueof your investments in stocks, bonds, andother corporate or government securities, lessliabilities, both long term and short term, di-rectly or indirectly attributable to investmentcapital. Investment capital does not includethose stocks, bonds or other securities that areheld for sale to customers in the regular courseof business or that constitute subsidiary capi-tal. Investment capital does not include inter-ests in, or obligations of, partnerships or otherunincorporated entities. (Refer to Title 19Rules of the City of New York Section 11-37for the definition of investment capital.)

To determine the value of your assets for busi-ness, investment and subsidiary capital pur-poses, 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 thetaxpayer is liable) at which a willing seller, notcompelled to sell, will sell and a willing pur-chaser, not compelled to buy, will buy. Thefair market value, on any date, of stocks,bonds and other securities regularly dealt in onan exchange, or in the over-the-counter mar-ket, is the mean between the highest and low-est selling prices on that date.The value of all other property must be in-cluded at the value shown on the taxpayer’sbooks and records in accordance with gener-ally accepted accounting principles (GAAP).(Refer to the instructions for Schedule E, lines1 through 5 for more information on comput-ing average value.)

In completing Schedules C and D, you mayuse the worksheet which appears below to de-termine the amount of liabilities indirectly at-tributable to a particular asset.In column D of Schedules C and D on the linefor the asset in question, include the sum ofthe amount from line 15 of this worksheet andthe amount of liabilities directly attributable tothat asset.

WORKSHEETTotal 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 lessamount 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 or in-vestment capital to be allocated within theCity, multiply the amount of subsidiary or in-vestment capital during the period covered bythe return (column E) by the issuer’s alloca-tion percentage (as defined in the instructionsfor Schedule E, line 15).This percentage may be obtained (1) from taxservice publications, (2) by writing to: NYCDepartment of Finance, Taxpayer Correspon-dence Unit, 59 Maiden Lane, 28th Floor, NewYork, NY 10038, (3) from the department’swebsite under “Forms/Guides” at nyc.gov/fi-nance, or (4) by calling (212) 504-4036. If thesubsidiary or other issuer was not doing busi-ness in New York City during the precedingyear, the percentage is zero. The investmentallocation percentage should be rounded to thenearest one hundredth of a percentage point.

SCHEDULE D, LINE 3 - CASHIf you have both business and investment cap-ital, you may elect to treat cash on hand or ondeposit as either business or investment capi-tal. If you wish to elect to treat cash as in-vestment capital, you must include it on thisline. Otherwise, you will be deemed to haveelected to treat cash as business capital. Youmay not elect to treat part of such cash as busi-ness capital and part as investment capital.You may not revoke your election after it hasbeen made.

SCHEDULE EComputation and Allocation of Capital“Eligible Small Firms” as described in theinstructions on Page 5 do not need to com-plete this schedule.

LINES 1 THROUGH 5 - AVERAGEVALUE OFTOTALASSETSTo determine the value of your assets for busi-ness, investment and subsidiary capital pur-poses, you must include real property andmarketable securities at fair market value.The value of all other property must be in-cluded at the value shown on the taxpayer'sbooks and records in accordance with gener-ally accepted accounting principles (GAAP).On Schedule E, line 1, enter the value of totalassets at the beginning of the year in columnAand at the end of the year in column B. Enterthe average value in column C. Attach aschedule showing the computation of the av-erage value.On line 2, enter the value of real property and mar-ketable 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, asemiannual or annual basis may be used if nodistortion of average value results.With respect to real property owned by thetaxpayer and located within New York City,the fairmarket value is presumed to be not lessthan the estimated market value of the prop-erty on the Final Assessment Roll of the Cityfor the period covered by the return or themost recent sales price, whichever is greater.

LINE 6 - TOTAL LIABILITIESThe liabilities deductible in computing eachtype of capital are those liabilities (both longand short term) that are directly or indirectlyattributable to each type of capital. Use thesame method of averaging as is used in deter-mining 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 cal-culate 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. Ifthe amount on line 8 is less than zero be-cause liabilities attributable to subsidiarycapital exceed the value of the assets re-ported in Schedule C, add the absoluteamount of the amount on line 8 to theamount on line 7 and enter the total on line 9.For example, if the amount on Schedule E,line 8 is ($100) and the amount on ScheduleE, line 7 is $200, the amount on Schedule E,line 9 should be $300.If the amount on Schedule D, line 4 is less thanzero, enter zero (“0”) on line 10 of this Sched-ule E, enter the amount from line 9 on line 11,and enter zero (“0”) on line 12.

LINE 15 - ISSUER’SALLOCATION PERCENTAGEThe percentage is determined by adding to-gether allocated New York City business, in-vestment and subsidiary capital, dividing thesum by total capital, and rounding to the near-est one hundredth of a percentage point.

The issuer's allocation percentage cannot beless than zero. Do not calculate your issuer'sallocation percentage by adding the business,investment and subsidiary capital allocationpercentages and dividing that total by thenumber of percentages.

The issuer’s allocation percentage represents theamount of capital employedwithin NewYork Cityas compared to total capital employed everywhere.Every taxpayer using FormNYC-3L is required tocompute its issuer’s allocation percentage.Combined filers must compute a combined is-suer’s allocation percentage by using amountsfrom Form NYC-3A. The combined issuer’sallocation percentage should be entered onSchedule A of Form NYC-3A.

SCHEDULE GFor special treatment of “Eligible SmallFirms” see instructions on Page 5.

SCHEDULE HBusiness Allocation

NOTE: Zip codes beginning with the follow-ing three-digits are within the five boroughs ofNew 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 of

11001, 11040 and 11096 are in the borough ofQueens. If the zip code is 11001, 11040 or11096, call the US Postal Service at (516) 354-3297 to determine if the corporation's addressis within New York City.A corporation is entitled to allocate part of itsbusiness income and capital outside NewYork City if it carries on business both insideand outside New York City and, for taxableyears beginning before July 1, 1996, only if ithas a “regular place of business” outside theCity. Otherwise, 100% of its business incomeand capital must be allocated to New YorkCity. If you did not carry on business both in-side and outside New York City, you mustenter 100% at Schedule H, line 5. If you car-ried on business both inside and outside NewYork City, you must complete Schedule G,parts I and II and Schedule H, business allo-cation percentage.The business allocation percentage is gener-ally computed by means of a three factor for-mula:� real and tangible personal property (in-

cluding rented property)� business receipts� payrollEach factor is computed by dividing theamount in columnA (NewYork City amount)by the amount in column B (total amount).The three resulting percentages are added to-gether, the sum is divided by 3 rounded to thenearest one hundredth of a percentage pointand the resulting business allocation percent-age is entered at Schedule H, line 5. If one ofthe factors is missing, the other two percent-ages are added and the sum is divided by two.If two of the factors are missing, the remain-ing percentage is the business allocation per-centage. A factor is not missing merelybecause its numerator is zero, but is missingif both its numerator and denominator arezero.Example: Acorporation owns no real or tan-gible personal property and rents no real prop-erty either within or without the City. Theproperty factor being missing, the business al-location percentage is computed by adding thebusiness receipts and payroll percentages anddividing the total by two.

ALTERNATIVEALLOCATIONMETHODYou cannot use an allocation method other thanthe formula basis set out in Schedule H withoutthe consent of the Department of Finance.However, if you believe that Schedule H doesnot fairly and equitably reflect income fromNew York City, you may request the Depart-ment’s consent to use an alternative methodwhen filing this return. To make that request,

you must check the appropriate box in Sched-ule H, complete Schedule H, and fully explainyour proposed alternative allocation method ina rider. This explanation must provide full in-formation regarding the nature and scope of thebusiness activities carried on within and with-out NewYork City and provide complete detailsof how the method you propose would allocateincome on amore equitable basis than the statu-tory method. In addition, at the time of filingthe return, you must pay the tax in accordancewith the formula basis set out in Schedule H. Ifthe Department consents to your proposed al-ternative allocation method and it results in alower tax liability than the formula basis set outin Schedule H, you may be entitled to a refundof the excess amount you have paid.

LINES 1 AND 2Property FactorWhen computing the property percentage,value real and tangible personal propertyowned by the corporation at the adjusted basisused for federal income tax purposes. How-ever, you may make a one-time revocableelection to value real and tangible personalproperty owned at fair market value. Youmust make this election on or before the duedate (or extended due date) for filing the tax-payer’s first General Corporation Tax Return.This election will not apply to any taxableyear with respect to which the corporation isincluded in a combined report unless each ofthe corporations included on the combined re-port has made the election which remains ineffect for such year.

LINE 1b - REALESTATE RENTEDThe value of real property rented to the taxpayeris eight times the gross rent payable during theyear covered by this return. Gross rent includesany amount payable as rent or in lieu of rent,such as taxes, repairs, etc., and, if there are lease-hold improvements made by or on behalf of thetaxpayer, the amount of annual amortization ofsuch cost. Do not include the rental of personalproperty on this line.

LINE 1d - TANGIBLE PERSONALPROPERTYOWNEDEnter the average value of the tangible personalproperty owned. The term “tangible personalproperty” means corporeal personal property,such as machinery, tools, implements, goods andwares. Do not include cash, shares of stock,bonds, notes, credits, evidences of an interest inproperty, or evidences of debt.LINE 1e - TANGIBLE PERSONALPROPERTY RENTEDEnter the average value of the tangible per-sonal property you rented. The value of rentedtangible personal property is eight times thegross rent payable during the year covered bythis return.


Receipts FactorLINES 2a AND 2b - SALES OFTANGIBLE PERSONAL PROPERTYEnter on line 2a, columnA, receipts in the reg-ular course of business from the sale of tangi-ble personal property where shipments aremade to points within New York City. Enteron line 2b, column B, receipts from all salesof tangible personal property.LINE 2c - SERVICES PERFORMEDReceipts from services performed within NewYork City are allocable to New York City. Allamounts received by the taxpayer in paymentfor such services are allocable to NewYork Cityregardless of whether the services were per-formed by employees or agents of the taxpayer,by subcontractors, or by any other persons. It isimmaterial where such amounts were payableor where they actually were received.Commissions received by the taxpayer are allo-cated to NewYork City if the services for whichthe commissions were paid were performed inNew York City. If the taxpayer’s services forwhich commissions were paid were performedfor the taxpayer by salesmen attached to orworking out of a NewYork City office of the tax-payer, the taxpayer’s services will be deemed tohave been performed in New York City.Corporations engaged in publishing newspapers orperiodicals must allocate receipts from advertisingin such publications based on the circulation of thepublication in the City compared to the total cir-culation. Corporations engaged in radio or televi-sion broadcasting, whether by cable or othermeans, must allocate receipts from broadcastingprograms or commercial messages based upon thelocation of the audience for the broadcasts in theCity compared to the total audience. For taxableyears beginning on or after January 1, 2002, cor-porations engaged in publishing newspapers or pe-riodicals or in radio or television broadcastingmust allocate receipts from subscriptions to suchnewspapers, periodicals and broadcast programsbased on the location of the subscriber.Taxpayers principally engaged in the activityof air freight forwarding acting as principaland like indirect air carriers are required to de-termine receipts for purposes of the receiptsfactor arising from the activity from servicesperformed within New York City as follows:100% of the receipts if both the pick up anddelivery associated with the receipts are madein New York City and 50% of the receipts ifeither the pickup or delivery associated withthe receipts is made in the City but not both.Receipts from management, admin. or distri-bution services provided to a regulated invest-ment company (RIC) must be allocated basedupon the percentage of the RIC’s shareholdersdomiciled in New York City. (Attach ridershowing computation.)

LINE 2d - RENTALS OF PROPERTYReceipts from rentals of real and personalproperty situated in NewYork City are alloca-ble to New York City. These include allamounts received by the taxpayer for the useor occupation of property, whether or not suchproperty is owned by the taxpayer.

LINE 2e - ROYALTIESRoyalties from the use in New York City ofpatents or copyrights are allocable to NewYorkCity. These include all amounts received bythe taxpayer for the use of patents or copy-rights, whether or not the patents or copyrightswere originally issued to or are owned by thetaxpayer. Apatent or copyright is used in NewYork City to the extent that activities thereun-der are carried on in New York City.Do not include royalty income from relatedmembers that was subtracted on line 17 ofSchedule B. See "Highlights of Recent Tax LawChanges for Corporations."

LINE 2f - OTHER BUSINESSRECEIPTSAll other business receipts earned by the tax-payer within New York City are allocable toNewYork City. Business receipts are not con-sidered to have been earned by the taxpayer inNewYork City solely by reason of the fact thatthey were payable in NewYork City or actuallywere received in NewYork City. Receipts fromsales of capital assets (property not held by thetaxpayer for sale to customers in the regularcourse of business) are not business receipts.Do not include payments for the use of intangi-bles from related members that were subtractedon line 17 of Schedule B.The following are also business receipts and areallocable to New York City:� receipts from the sale of real property held by

the taxpayer as a dealer for sale to customersin the regular course of business, provided thereal property was situated in NewYork City

� receipts from sales of intangible personalproperty included in business capital heldby the taxpayer as a dealer for sale to cus-tomers in the regular course of business,provided the sales were made in NewYork City or through a regular place ofbusiness in New York City.

LINE 2i - ADDITIONALRECEIPTSFACTORFor taxable years beginning after 6/30/96, amanufacturing business may elect to use a dou-ble-weighted receipts factor. An election mustbe made on a timely filed original return and ismade by entering on line 2i the amount fromline 2h. The election is irrevocable except withspecial permission of the Commissioner undercertain circumstances. If you make an election,

add the percentages in column B and divide thesum by 4 and enter the result on line 5 roundedto the nearest one hundredth of a percentagepoint. If one or more of the other factors ismissing, add the remaining percentage(s) anddivide by the number of percentages so added.If you do not wish to make the election, donot enter an amount on line 2i. For purposesof this election, a corporation is engaged in amanufacturing business if it is primarily en-gaged in the manufacturing and sale of tangi-ble personal property. Manufacturing includesassembly, working raw materials into wares,and giving new shapes, qualities or combina-tions to matter that has already gone throughsome artificial process, through the use of ma-chinery, tools, appliances or other similar equip-ment. A corporation is primarily engaged inmanufacturing if more than 50% of its gross re-ceipts for the year are attributable to manufac-turing. See Title 19 Rules of the City of NewYork §11-63(c)(4) for more information.If a taxpayer that is otherwise eligible to elect touse a double-weighted receipts factor is per-mitted or required to file on a combined basiswith one or more other corporations, the tax-payer may elect to use a double-weighted re-ceipts factor only if the requirements for theelection would be met if all the corporations in-cluded in the combined report were treated as asingle corporation. If a taxpayer included in acombined report properly makes an election touse a double-weighted receipts factor, each ofthe other corporations in the combined groupswill be treated as having made a proper electionto use a double-weighted receipts factor.

Payroll FactorLINE 3a - WAGESAND SALARIESEmployeeswithinNewYorkCity include all em-ployees, except general executive officers, regu-larly connected with or working out of an officeor place of business maintained by the taxpayerwithin NewYork City, irrespective of where theservices of these employees were performed.General executive officers include the chair-man, president, vice-president, secretary, as-sistant secretary, treasurer, assistant treasurer,comptroller, and any other officer chargedwith the general executive affairs of the cor-poration. An executive officer whose dutiesare restricted to territory either inside or out-side of New York City is not a general execu-tive officer.

LINE 5 - BUSINESS ALLOCATIONPERCENTAGEAviation Corporations and CorporationsOperating Vessels.Complete Schedule I (BusinessAllocation forAviation Corporations and Corporations Op-erating Vessels) and enter the percentage frompart 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 conductof aviation is required to determine the portion ofthe entire net income to be allocated within theCity by multiplying its business income by abusiness allocation percentage which is equal tothe arithmetic average of the three percentagesfrom part 1, lines 2, 4 and 6.Line 1“Aircraft arrivals and departures” means thenumber of landings and takeoffs of the aircraftof an aviation corporation and the number of airpickups and deliveries by such aircraft.Arrivalsand departures solely for maintenance or repair,refueling (where no debarking or embarking oftraffic occurs), or arrivals and departures in theevent of emergency situations should not be in-cluded 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 hundredpounds per passenger) and revenue cargofirst received either as originating or con-necting traffic, or finally discharged bysuch corporation at such airport.

Line 5“Originating revenue” means revenue to anaviation corporation from the transportationof revenue passengers and revenue propertyfirst received by such corporation at an air-port as either originating or connecting traffic.

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

Part 2 - Corporations Operating VesselsAtaxpayer principally engaged in the operation ofvessels is required to determine the portion of en-tire net income to be allocated within the City bymultiplying its business income by a business al-locationpercentagedeterminedbydividing the ag-gregate number of working days of the vessels itowns or leases in territorialwaters of theCity dur-ing the period covered by its report by the aggre-gate number of working days of all the vessels itownsor leases during theperiod. Complete part 2.

Line 1“Working days” means days during which avessel is sufficiently manned for the carriageof persons or cargo or during which it hascargo aboard. The working time in NewYork City territorial waters and the workingtime everywhere shall be computed for eachvessel in hours and minutes. At the end ofthe year, such time shall be totalled for allvessels and the sum converted into days. Inlieu of records indicating actual time in New

York City territorial waters, such time maybe computed on the basis of records showingthe number of times the Ambrose Light Sta-tion was passed on the way in and out of port.

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

SCHEDULE JAdditional Required InformationAll questions must be answered.

Question 1In reporting the "NYC principal business ac-tivity," give the one activity that accounts forthe largest percentage of total receipts. Totalreceipts means gross receipts plus all other in-come. State the broad field of business activ-ity as well as the specific product or service(e.g., mining copper, manufacturing cottonbroad woven fabric, wholesale meat, retailmen’s apparel, export or import chemicals, realestate rental, or real estate operation of motel).

Question 2If the corporation is included in a consolidatedfederal return, give the name of the commonparent corporation filing the consolidated return.

Question 3If the corporation is included in a NewYork CityCombinedGeneral Corporation Tax Return, givethe name of the corporation that is a member ofthe combinedgroup andowns or controls, directlyor indirectly, substantially all of the capital stockofeach other member of the combined group. If nocorporation that is part of the combined group sat-isfies this requirement, give the name of the per-son or corporation that owns or controls, directlyor indirectly, substantially all of the capital stockofall the members of the combined group.

Question 10If you answer “yes” to question a, attach a sep-arate sheet providing street address, borough,block and lot number of such property. If youanswer “yes” to question b, c or d, completequestions 11 and 12.A controlling interest in the case of a corpora-tion means:

� 50% or more of the total combined vot-ing power of all classes of stock of suchcorporation; or

� 50% or more of the total fair market valueof all classes of stock of such corporation.

Question 13If you answer “yes” to question 13, no portion ofthe income, gain, loss, deduction or capital of aQSSS is permitted to be included in a separatereport filed by the S corporation parent. The

QSSS must file a separate general corporationtax report. See Finance Memorandum 99-3.

SCHEDULE KFederal Return InformationIf the corporation files as a member of a fed-eral consolidated group, enter the informa-tion as it appears on its proforma federalreturn. If the corporation files a separate re-turn, enter the information appearing on theFederal 1120 filed with the IRS.

PREPAYMENTS SCHEDULEEnter the payment date and the amount of all pre-payments made for this tax period.

CUSTOMERASSISTANCEFor interest calculations and account informa-tion, contact CustomerAssistance at 212-504-4036, Monday through Friday, 8:30am to 5:30pm.You can speak to a Customer AssistanceRepresentative between the hours of 9:00 amand 4:30 pm.You can also visit our Internet website at

nyc.gov/finance

PRIVACYACTNOTIFICATIONThe Federal Privacy Act of 1974, as amended, re-quires agencies requesting Social Security Numbersto inform individuals from whom they seek this in-formation as to whether compliance with the requestis voluntary or mandatory, why the request is beingmade and how the information will be used. The dis-closure of Social Security Numbers for taxpayers ismandatory and is required by section 11-102.1 of theAdministrative Code of the City of NewYork. Suchnumbers disclosed on any report or return are re-quested for tax administration purposes and will beused to facilitate the processing of tax returns and toestablish and maintain a uniform system for identi-fying taxpayers who are or may be subject to taxesadministered and collected by the Department of Fi-nance, and, as may be required by law, or when thetaxpayer gives written authorization to the Depart-ment of Finance for another department, person,agency or entity to have access (limited or otherwise)to the information contained in his or her return.


NYC-3L Instructions - 2007 Rev.1

Documents

Instructions for Form NYC-3L