New York State Department of Taxation and Finance
Instructions for Forms CT-4, CT-3, and CT-3-ATT
General Business Corporation Franchise Tax Returns Table of contents
CT-3/4-I
Page
1 2 3 3 4 4 5 5 5 5 6 7 8 12 22
Changes for 2008 ...................................................................................................................... Who must file ............................................................................................................................. Which form to file ....................................................................................................................... Other forms you may need to file............................................................................................... When to file................................................................................................................................ Where to file .............................................................................................................................. Penalties and interest ................................................................................................................ Is this an amended return? ........................................................................................................ Filing your final return ................................................................................................................ Reporting period ........................................................................................................................ Overview of corporation franchise tax ....................................................................................... How to fill out your tax return ..................................................................................................... Line instructions for Form CT-4.................................................................................................. Line instructions for Form CT-3.................................................................................................. Line instructions for Form CT-3-ATT ..........................................................................................
Important reminder to file a complete return: You must complete all required schedules and forms that make up your return, and include all pages of those forms and schedules when you file. Returns that are missing required pages or that have pages with missing entries are considered incomplete and cannot be processed, and may subject taxpayers to penalty and interest.
transactions, has been extended to July 1, 2011. Visit our Web site at www.nystax.gov for additional information. Electronic filing and electronic payment mandate -- Certain tax preparers using tax software to prepare tax documents, and certain taxpayers preparing their own tax documents using tax software, must, for the applicable calendar year and all succeeding calendar years, e-file all documents authorized by the Commissioner to be e-filed. Any tax liability or other amount due required to be paid with a tax document that must be e-filed must also be e-paid. For more information, visit our Web site at www.nystax.gov and click on e-file. Tax treatment of real estate investment trusts (REITs) and regulated investment companies (RICs) -- For tax years beginning on or after January 1, 2008, and before January 1, 2011, new amendments remove the requirements of the 2007 legislation for certain REITs and RICs to file combined returns. The new legislation requires a captive REIT (as defined in new Tax Law Article 1, section 2.9) or a captive RIC (as defined in new Tax Law Article 1, section 2.10) be included in a combined return with the closest corporation that directly or indirectly owns or controls over 50% of the voting stock of the captive REIT or the captive RIC. In addition, a qualified REIT subsidiary must be included in the combined return of its captive REIT parent. The entire net income (ENI) of the captive REIT or RIC is computed in the same manner as a non-captive REIT or RIC (see Tax Law sections 209.5 and 209.7); however, for tax years beginning on or after January 1, 2008, the deduction allowed by the Internal Revenue Code (IRC) for dividends paid by the captive REIT or captive RIC to any member of the affiliated group that includes the corporation that directly or indirectly owns or controls over 50% of the voting stock of the captive REIT or captive RIC will not be allowed. The new legislation described above is repealed for tax years beginning on or after January 1, 2011. New fixed dollar minimum tax rates -- For tax years beginning on or after January 1, 2008, the fixed dollar minimum tax will be computed based on the New York receipts of the corporation. For more information, see the Tax rates schedule on page 6. Capital base rate reduction -- The capital base tax rate has been reduced and the cap on that tax base for non-manufacturers has been changed. For tax years beginning on or after January 1, 2008, the capital base tax rate is reduced from 0.178% to 0.15%. However, the rate for a cooperative housing corporation remains at 0.04%. For qualified New York manufacturers, the tax on capital base cannot exceed $350 thousand. For all other Article 9-A taxpayers, the tax on capital base cannot exceed $10 million for tax years beginning on or after January 1, 2008, but before January 1, 2011, and $1 million for tax years beginning on or after January 1, 2011.
Up-to-date information affecting your tax return
Visit our Web site for tax law changes or forms corrections that occurred after the forms and instructions were printed (see Need help? on page 30).
Changes for 2008
Increase in the mandatory first installment of estimated tax -- The Tax Law was amended to provide an increase in the mandatory first installment for taxpayers, other than life insurance corporations filing Forms CT-33 or CT-33-A, and continuing section 186 taxpayers filing Form CT-186, whose preceding year's tax, exclusive of the metropolitan transportation business tax (MTA surcharge), exceeded $100,000. For tax years beginning on or after January 1, 2009, those taxpayers are required to pay a first installment equal to 30% of the preceding year's tax. Additionally, taxpayers who are required to pay their mandatory first installment at the 30% rate and are subject to the MTA surcharge are also required to calculate their estimated tax for the MTA surcharge at 30% of the preceding year's MTA surcharge. The remaining three estimated tax payments are to be adjusted so that the total payments do not exceed 100% of the estimated tax due. The mandatory first installment of estimated tax and estimated MTA surcharge remains at 25% of the preceding year's tax and tax surcharge, respectively, for those taxpayers whose preceding year's tax exceeded $1,000, but was less than or equal to $100,000. Collection costs or fees for tax debts owed to New York State -- The Tax Department has been authorized to charge the taxpayer, as part of the taxpayer's tax debt, any cost or fee imposed or charged by the United States, or any state, for the payment or remittance of a taxpayer's overpayment to satisfy a New York State tax debt. Voluntary Disclosure and Compliance Program -- A Voluntary Disclosure and Compliance Program has been established. The program provides relief from certain penalties and criminal prosecution to eligible taxpayers who come forward and reveal previously undisclosed liabilities. Visit our Web site at www.nystax.gov for additional information. Extension of tax shelter reporting requirements -- The expiration date of the reporting requirements and related administrative provisions concerning the disclosure of certain transactions and related information regarding tax shelters, including those related to New York reportable
Page 2 of 30
CT-3/4-I (2008)
General information
State. A general business corporation that has elected to be treated as an S corporation by filing Form CT-6, Election by a Federal S Corporation to be Treated As a New York S Corporation, must file Form CT-3-S, New York S Corporation Franchise Tax Return, instead of Form CT-3 or CT-4. Mandated New York S corporations -- Shareholders of eligible federal S corporations that have not made the election to be treated as a New York S corporation for the current tax year will be deemed to have made that election and must file Form CT-3-S if the corporation's investment income is more than 50% of its federal gross income for that year. For purposes of the mandated New York State S election, investment income means the sum of an eligible S corporation's gross income from interest, dividends, royalties, annuities, rents and gains derived from dealings in property, including the corporation's share of such items from a partnership, estate, or trust, to the extent such items would be includable in the corporation's federal gross income for the tax year. This provision does not apply to S corporations subject to tax under Tax Law Article 32 (Franchise Tax on Banking Corporations). The definition of a corporation, as used in Tax Law Article 9-A and in these instructions, includes associations, limited liability companies, limited liability partnerships, and publicly traded partnerships that are taxed as corporations under the Internal Revenue Code (IRC). For more information, see TSB-M-89(12)C, Definition of Corporation. A general business corporation includes all corporations except: -- banking corporations (Article 32); -- insurance corporations (Article 33); -- transportation and transmission corporations (other than aviation corporations, corporations principally engaged in transportation, transmission, or distribution of gas, electricity, or steam (TTD corporations), and non-electing railroad and trucking corporations) (Article 9); -- farmers and agricultural cooperatives (Article 9); -- nonstock, not-for-profit corporations, no part of the net earnings of which inures to the benefit of any officer, director, or member; -- continuing section 186 taxpayers (Article 9). Corporate partners · If a partnership is doing business, employing capital, owning or leasing property, or maintaining an office in New York State, then all of its corporate general partners must file franchise tax returns. · A foreign corporation is doing business, employing capital, owning or leasing property, or maintaining an office in New York State if it is a limited partner of a partnership (other than a portfolio investment partnership) that is doing business, employing capital, owning or leasing property, or maintaining an office in New York State, and if it is engaged, directly or indirectly, in the participation or in the domination or control of all or any portion of the business activities or affairs of the partnership. For more information, see New York State (NYS) Regulation section 1-3.2(a)(6)(i). Transitional provisions for the Gramm-Leach-Bliley (GLB) Act -- Under the federal GLB Act, an entity was created called a financial holding company (FHC) that can own banks, insurance companies, and securities firms. As a result of the GLB Act, the Tax Law was amended in 2000 to allow certain corporations that were taxed under Article 9-A or Article 32 in 1999 to retain their tax status in 2000. These transitional provisions were extended by adding new Tax Law section 1452(m), and amending Tax Law section 1462(f)(2)(iv) so they now expire for tax years beginning on or after January 1, 2010. The GLB provisions do not preclude taxpayers
Form CT-222, Underpayment of Estimated Tax by a Corporation, revised -- Previously, Form CT-222 was used by a corporation to report to the Tax Department the amount of the underpayment of estimated tax penalty the corporation was subject to. Beginning with the 2008 Form CT-222, corporations will file Form CT-222 only to inform the Tax Department that the corporation meets one of the exceptions to the underpayment of estimated tax penalty. The Tax Department will compute the amount of any penalty and notify the corporation of any amount due. Clean heating fuel credit -- The credit has been reinstated and applies to bioheat purchased on or after January 1, 2008, and before January 1, 2012. For additional information, see Form CT-241, Claim for Clean Heating Fuel Credit, and its instructions. Taxicabs and livery service vehicles accessible to persons with disabilities credit -- The credit has been extended to include costs incurred before January 1, 2011. For additional information, see Form CT-239, Claim for Credit for Taxicabs and Livery Service Vehicles Accessible to Persons with Disabilities, and its instructions. Empire State film production credit -- For tax years beginning on or after January 1, 2008, the credit amount has been increased from 10% to 30% of qualified production costs. Also, if the amount of the credit allowed exceeds the taxpayer's tax, the entire excess will be refunded (without interest) or credited as an overpayment to next year's tax in the tax year the credit is claimed. For additional information, see Form CT-248, Claim for Empire State Film Production Credit, and its instructions. Brownfield credits revised -- Numerous changes have been made to the brownfield program tax credits. For additional information, see Forms CT-611, Claim for Brownfield Redevelopment Tax Credit, CT-612, Claim for Remediated Brownfield Credit for Real Property Taxes, and CT-613, Claim for Environmental Remediation Insurance Credit. Investment tax credit for the financial services industry -- The investment tax credit and the EZ investment tax credit for the financial services industry have been extended to include property placed in service before October 1, 2011. In addition, recent legislation has added a new test to determine if you are eligible to claim the credit. For additional information, see Form CT-44, Claim for Investment Tax Credit for the Financial Services Industry, and its instructions; or Form CT-605, Claim for EZ Investment Tax Credit and EZ Employment Incentive Credit for the Financial Services Industry, and its instructions. Modification for federal domestic production activities deduction -- For tax years beginning on or after January 1, 2008, the amount deducted for income attributable to domestic production activities pursuant to IRC section 199 must be added back in computing ENI. For additional information, see page 14. Limited liability company (LLC) filing fee -- For tax years beginning on or after January 1, 2008, limited liability companies that are disregarded entities for federal income tax purposes are subject to a filing fee of $25. For additional information, see Form IT-204-LL, Limited Liability Company/Limited Liability Partnership Filing Fee Payment Form.
Who must file
Domestic corporations -- A domestic corporation (incorporated in New York State) is generally liable for franchise taxes for each fiscal or calendar year, or part thereof, during which it is incorporated until it is formally dissolved with the Department of State (www.dos.state.ny.us). However, a domestic corporation that is no longer doing business, employing capital, or owning or leasing property in New York State is exempt from the fixed dollar minimum tax for years following its final tax year and is no longer required to file a franchise tax return provided it meets the requirements listed in TSB-M-06(5)C, Certain Domestic Business Corporations Exempt from the Article 9-A Fixed Dollar Minimum Tax. Foreign corporations -- A foreign corporation (incorporated outside of New York State) is liable for franchise taxes during the period in which it is doing business, employing capital, owning or leasing property, or maintaining an office in New York State. In addition, a foreign corporation authorized to do business in New York State is also liable for payments of its annual maintenance fee, until such time as it surrenders to the Department of State its authority to do business, regardless of whether it is doing business, employing capital, owning or leasing property, or maintaining an office in the state. All general business corporations other than New York S corporations must file franchise tax returns using either Form CT-3 or CT-4. This includes both domestic corporations and foreign corporations that do business, employ capital, own or lease property, or maintain an office in New York
that made the one time election to remain taxable under Article 9-A, pursuant to section 1452(d) (the grandfather election), from revoking that election.
Revocation of Article 9-A status -- Pursuant to Tax Law section 1452(d), a corporation 65% or more owned by a bank or a bank holding company as described in Tax Law section 1452(a)(9) that was subject to tax under Article 9-A for its tax year ending in 1984, was allowed in 1985 to make a one-time grandfather election to continue to be taxable under Article 9-A. This election remains in effect until revoked by the taxpayer. In no event can the revocation of the election be for part of the tax year. The revocation is made by the filing of a tax return under Tax Law Article 32. However, if any of the conditions set forth on page 3 exist or occur in a tax year beginning on or after January 1, 2007, with respect to the electing corporation, the election will be deemed revoked as of the first day of the tax year in which the condition applied. If any of the conditions set forth on page 3 exist or occur in a tax year beginning on or after January 1, 2007, with respect to a corporation required to be taxable under Article 9-A pursuant to the GLB provisions of Tax Law
General information
section 1452, then such corporation, if it otherwise meets the requirements of Tax Law section 1452(a), will be taxable under Article 32 as of the first day of the tax year in which the condition applied. If any of the conditions set forth below exist or occur in a tax year beginning on or after January 1, 2007, with respect to a corporation that has made the election to be taxable under Article 9-A pursuant to the GLB provisions of Tax Law section 1452, then the electing corporation will be deemed to have revoked the election as of the first day of the tax year in which the condition applied. Conditions · The corporation ceases to be a taxpayer under Article 9-A. · The corporation has no wages or receipts allocable to New York State pursuant to Tax Law section 210.3, or is otherwise inactive. However, this condition does not apply to a corporation that is engaged in the active conduct of a trade or business, or substantially all of the assets of which are stock and securities of corporations that are directly or indirectly controlled by it and are engaged in the active conduct of a trade or business. · 65% or more of the voting stock of the corporation becomes owned or controlled directly by a corporation that acquired the stock in a transaction (or series of related transactions) that qualifies as a purchase within the meaning of IRC section 338(h)(3), unless both corporations, immediately prior to the purchase, were members of the same affiliated group (as such term is defined in IRC section 1504 without regard to the exclusions provided for in 1504(b)). However, any acquisition that was completed on or before January 3, 2007, shall be treated as a new acquisition made before January 1, 2007. · The corporation, in a transaction or series of related transactions, acquires assets, whether by contribution, purchase, or otherwise, having an average value as determined in accordance with Tax Law section 210.2 (or, if greater, a total tax basis) in excess of 40% of the average value (or, if greater, the total tax basis) of all assets of the corporation immediately prior to the acquisition and, as a result of the acquisition, the corporation is principally engaged in a business that is different from the business immediately prior to the acquisition (provided that such different business is described in Tax Law section 1452(a)(9)(i), (ii), or (iii)).
CT-3/4-I (2008) Page 3 of 30
-- You have a subtraction on Form CT-3, line 15, other than the subtractions allowed on Form CT-4, line 10. For a listing of these subtractions, see page 15.
-- You are a corporation that is principally engaged in aviation. -- You are a qualified public utility, a transferee, a qualified power producer, or a qualified pipeline corporation.
Foreign corporations authorized to do business but disclaiming tax liability
Form CT-245, Maintenance Fee and Activities Return for a Foreign Corporation Disclaiming Tax Liability. A foreign
corporation authorized to do business in New York State but disclaiming tax liability must file this form. The annual maintenance fee is $300, unless you file a short period return, which may reduce your maintenance fee to less than $300. If you are disclaiming tax liability, you do not have to file Form CT-3 or CT-4. If it is determined that a franchise tax return is required, this fee may be claimed as a credit against any tax due under Article 9-A.
Other forms you may need to file
Form CT-3-B, Tax Exempt Domestic International Sales Corporation (DISC) Information Return. A tax-exempt DISC must file
this form on or before the 15th day of the ninth month after the end of the tax year.
Form CT-3-C, Consolidated Franchise Tax Return. Stockholders
of tax-exempt DISCs must file an individual return on Form CT-3 and a consolidated return with the DISC on Form CT-3-C. Tax-exempt DISCs -- A corporation that qualifies as a DISC under IRC section 992(a) is exempt from tax under Tax Law Article 9-A if during the year it received more than 5% of its: · gross sales from the sale of inventory or other property purchased from its stockholders; · gross rentals from the rental of property purchased or leased from its stockholders; or · total receipts, other than sales or rentals, from its stockholders. Taxable DISCs are DISCs that do not meet the 5% test under Tax-exempt DISCs. Taxable DISCs must file Form CT-3 on or before the 15th day of the ninth month after the end of the tax year. Such a DISC is subject to the tax on allocated capital or the fixed dollar minimum, whichever is larger, plus a tax on subsidiary capital. Write DISC after the name of the corporation in the address section of the return.
Which form to file
Most general corporations file either Form CT-4 or CT-3. Taxpayers who have filed Form CT-3 in the past should review the filing constraints to determine whether they are now eligible to file the short form (Form CT-4). You may use Form CT-4 if the following conditions exist: -- your property (owned or leased), employees, and business activities are entirely in New York State; and -- you do not claim tax credits; and -- you have no federal adjustment or tax preference items other than depreciation that would be used to compute the minimum taxable income (MTI) base. You may use Form CT-4 even if: -- you claim a net operating loss deduction (NOLD) or an alternative net operating loss deduction (ANOLD); or -- you claim the exemption from the tax on business and investment capital available to new small businesses. You must use Form CT-3 if any of the following conditions exist: -- You claim a deduction for optional depreciation. -- You claim any tax credits. -- You are a real estate investment trust (REIT), a real estate investment company (RIC), a taxable domestic international sales corporation (DISC), or a stockholder in a DISC. -- You were involved in a merger, acquisition, or consolidation during the current tax year. -- You have business income or capital attributable to sources outside New York State, and you want to allocate this income and capital. -- You have investment income or capital. -- You have a subsidiary (another corporation of which you own more than 50% of its voting stock). -- You have federal adjustments (other than the depreciation adjustment or the ANOLD) or tax preference items used to compute MTI. -- You are required to make an addition on Form CT-3, line 8. For a listing of these additions, see page 14.
Form CT-3M/4M, General Business Corporation MTA Surcharge Return, must be filed by any corporation taxable under Article 9-A that
does business, employs capital, owns or leases property, or maintains an office in the Metropolitan Commuter Transportation District (MCTD). The MCTD includes the counties of New York, Bronx, Kings, Queens, Richmond, Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester.
Form CT-8, Claim for Credit or Refund of Corporation Tax Paid. Use an amended return or Form CT-8 to request a refund other than
an overpayment. To speed up processing of the claim, mail it separately from your annual returns. You must file a claim for refund based on a net operating loss (NOL) carryback within three years of the due date or extended due date of the return for the loss year, or within 27 months from the date of the federal credit or refund. You must file a refund based on a federal change within two years from the date the federal change was required to be reported. All other claims for refunds must be received within three years from the date the return was filed, or two years from the date the tax was paid, whichever is later.
Form CT-9, Claim for Tentative Refunds Based Upon Carryback of Net Operating Loss. All general business corporations requesting
refunds based on NOL carrybacks may use an amended return or Form CT-9. Returns that are the basis for these refunds will be subject to review after the refunds have been processed. You must file the claim within 90 days after the receipt of the federal refund. Federal S corporations must file a claim within 15 months from the end of the loss year. For a full description of the limitation and requirements, see Form CT-9-I, Instructions for Form CT-9.
Form CT-33-D, Tax on Premiums Paid or Payable to an Unauthorized Insurer. You must file this form if you have purchased
or renewed a taxable insurance contract from an insurer not authorized
Page 4 of 30
CT-3/4-I (2008)
General information Form CT-400, Estimated Tax for Corporations. You must file
this form if your New York State franchise tax liability can reasonably be expected to exceed $1,000.
to transact business in New York State. You must file this return within 60 days following the end of the calendar quarter in which the contract was purchased or renewed.
Form CT-60-QSSS, Qualified Subchapter S Subsidiary Information Schedule. You must file this form to notify the Tax
Department that a qualified subchapter S subsidiary (QSSS) is included in your return. Remember to mark an X in the line C box on page 1 of Form CT-4 or CT-3, and attach Form CT-60-QSSS to either your Form CT-4 or CT-3.
Form CT-3360, Federal Changes to Corporate Taxable Income.
You must file this form to report any correction made by the Internal Revenue Service (IRS) in taxable income previously reported for any year, including changes based on the renegotiation of a government contract.
Form DTF-664, Tax Shelter Disclosure for Material Advisors,
has been developed to assist material advisors in complying with New York State's disclosure requirements.
Qualified subchapter S subsidiary (QSSS)
The filing requirements for a QSSS that is owned by a federal S corporation that is a New York C corporation or a nontaxpayer corporation are outlined below. Where New York State follows federal QSSS treatment, the parent and QSSS file a single franchise tax return. The QSSS is ignored as a separate taxable entity, and the assets, liabilities, income, and deductions of the QSSS are included on the parent's franchise tax return. However, for other taxes, such as sales and excise taxes, and the license and maintenance fees imposed under Article 9, the QSSS continues to be recognized as a separate corporation. · Parent is a New York C corporation -- New York State follows the federal QSSS treatment if (1) the QSSS is a New York State taxpayer; or (2) the QSSS is not a New York State taxpayer but the parent makes a QSSS inclusion election. In both cases, the parent and QSSS are taxed as a single New York C corporation, and file Form CT-3 or CT-4. If the parent does not make a QSSS inclusion election, it files Form CT-3 or CT-4 as a New York C corporation on a stand-alone basis. Nontaxpayer parent -- New York State follows the federal QSSS treatment where the QSSS is a New York State taxpayer but the parent is not, if the parent elects to be taxed as a New York S corporation by filing Form CT-6. The parent and QSSS are taxed as a single New York S corporation, and file Form CT-3-S. If the parent does not elect to be a New York S corporation, the QSSS must file as a New York C corporation on a stand-alone basis on Form CT-3 or CT-4. Exception: excluded corporation -- Notwithstanding the above rules, QSSS treatment is not allowed unless both parent and QSSS are general business corporations. That is, the corporations must file on a stand-alone basis if one is an Article 9-A taxpayer but the other is an Article 9, 32, or 33 taxpayer, or is a corporation which would be subject to such taxes if taxable in New York State.
Form DTF-686, Tax Shelter Reportable Transactions Attachment to New York State Tax Return, has been developed to
assist taxpayers and persons in complying with New York State's disclosure requirements. Reporting requirements for tax shelters -- The Tax Law requires taxpayers to report information about transactions that present the potential for tax avoidance (tax shelters). There are separate reporting requirements for those who use tax shelters and for those who promote the use of tax shelters. For the most recent information on these reporting requirements, visit our Web site. For more information about other taxes that may apply to you, see Publication 20, Tax Guide for New Businesses.
When to file
File your return within 2½ months after the end of your reporting period. If you are reporting for the calendar year, your return is due on or before March 15. If your filing date falls on a Saturday, Sunday, or legal holiday, then you must file your return on or before the next business day.
·
Extensions if you cannot meet the filing deadline
If you cannot meet the filing deadline, you may request a six-month extension of time by filing Form CT-5, Request for Six-Month Extension to File (for franchise/business taxes, MTA surcharge, or both), and paying your properly estimated franchise tax and metropolitan transportation business tax (MTA surcharge) on or before the original due date of the return. You may request up to two additional extensions by filing Form CT-5.1, Request for Additional Extension of Time to File (for franchise/business taxes, MTA surcharge, or both). File it on or before the expiration date of the original extension or previously filed additional extension.
·
Where New York State follows federal QSSS treatment, the QSSS is not considered a subsidiary of the parent corporation. A foreign QSSS authorized to do business in New York State, whose activities are being included in the parent's return, must file Form CT-245 and pay the maintenance fee.
Where to file
Form CT-3 -- Use one of the following addresses: With payment Without payment
NYS CORPORATION TAX PROCESSING UNIT PO BOX 1909 ALBANY NY 12201-1909 NYS CORPORATION TAX PROCESSING UNIT PO BOX 22095 ALBANY NY 12201-2095
Form CT-186-E or the short Form CT-186-EZ, Telecommunications Tax Return and Utility Services Tax Return, must be filed by a corporation that provides telecommunication
services. The corporation must pay an excise tax on its gross receipts from the sale of telecommunication services under Article 9, section 186-e.
Form CT-222, Underpayment of Estimated Tax by a Corporation. Use this form to inform the Tax Department that your
corporation meets one of the exceptions to the underpayment of estimated tax penalty pursuant to Tax Law section 1085(d).
Form CT-4 -- Use one of the following addresses: With payment Without payment
NYS CORPORATION TAX PROCESSING UNIT PO BOX 22093 ALBANY NY 12201-2093 NYS CORPORATION TAX PROCESSING UNIT PO BOX 22101 ALBANY NY 12201-2101
Form CT-240, Foreign Corporation License Fee Return. A
corporation organized outside New York State (a foreign corporation) must file Form CT-240 to pay the license fee based on capital stock. You must file this return when you file your first franchise tax return, or if capital stock employed in New York State has increased since you filed the last license fee return.
If you use a delivery service other than the U.S. Postal Service, see Private delivery services below. Private delivery services If you choose, you may use a private delivery service, instead of the U.S. Postal Service, to mail in your return and tax payment. However, if, at a later date, you need to establish the date you filed your return or paid your tax, you cannot use the date recorded by a private delivery service unless you used a delivery service that has been designated by the U.S. Secretary of the Treasury or the Commissioner of Taxation and Finance. (Currently designated delivery services are listed in Publication 55, Designated Private Delivery Services. See Need help? on page 30 of these instructions for information on obtaining forms and publications.) If you have used a designated private delivery service and need to establish the date you filed your return, contact that private delivery service for instructions on how to obtain written proof of the date your return was given to the delivery
Form CT-399, Depreciation Adjustment Schedule. You must file
this form to compute the allowable New York State depreciation deduction if you claim: 1) the federal accelerated cost recovery system (ACRS) depreciation or modified accelerated cost recovery system (MACRS) deduction for certain property placed in service after December 31, 1980; or 2) a 30%/50% federal special depreciation for certain qualified property placed in service on or after June 1, 2003, in tax years beginning after December 31, 2002. This form also contains schedules for determining a New York State gain or loss on the disposition of ACRS/MACRS property and property for which you claimed a 30%/50% federal special depreciation. Use it also to compute the depreciation deduction for the minimum taxable income (MTI) base.
General information
service for delivery. If you use any private delivery service, whether it is a designated service or not, send the forms covered by these instructions to: State Processing Center, 431C Broadway, Albany NY 12204-4836.
CT-3/4-I (2008) Page 5 of 30
Other penalties
Strong civil and criminal penalties may be imposed for negligence or fraud. For more information, contact the Corporation Tax Information Center (see Need help? on page 30).
Penalties and interest
If you pay after the due date
If you do not pay the tax due on or before the original due date, you must pay interest on the amount of the underpayment from the original due date of the return (without regard to any extension of time for filing) to the date the tax is paid. Exclude from the interest computation any amount shown on Form CT-3, line 83a or 83b, or Form CT-4, lines 33a or 33b. Interest is always due, without any exceptions, on any underpayment of tax. An extension of time for filing does not extend the due date for payment of tax.
Is this an amended return?
If you are filing an amended return for any purpose, including an amended return filed with Forms CT-8, CT-9, or CT-3360, mark an X in the Amended return box on page 1 of the return.
Filing your final return
Mark an X in the Final return box on page 1 of the return if the corporation is a: · domestic corporation that ceased doing business, employing capital, or owning or leasing property in New York State during the tax year and wishes to dissolve; or · foreign corporation that is no longer subject to the franchise tax in New York State. Do not mark an X in the Final return box if you are only changing the type of return that you file (for example, from Form CT-3 to CT-3-S, or from Form CT-3 to CT-32). Do not mark an X in the Final return box in the case of a merger or consolidation. Note: A foreign corporation, authorized to do business in New York State but disclaiming tax liability, that wishes to continue to be authorized must file Form CT-245. Call 1 800 327-9688 (Dissolution Unit) if you have questions concerning dissolution or surrendering authority to do business in New York State.
If you file and pay after the due date
Compute additional charges for late filing and late payment on the amount of tax minus any payment made on or before the due date (with regard to any extension of time for filing). Exclude from the penalty computation any amount shown on Form CT-3, line 83a or 83b, or Form CT-4, line 33a or 33b. A. If you do not file a return when due, or if the request for extension is invalid, add to the tax 5% per month up to 25% (section 1085(a)(1)(A)). B. If you do not file a return within 60 days of the due date, the additional charge in item A above cannot be less than the smaller of $100 or 100% of the amount required to be shown as tax (section 1085 (a)(1)(B)). C. If you do not pay the tax shown on a return when due, add to the tax ½% per month up to a total of 25% (section 1085 (a)(2)). D. The total of the additional charges in items A and C may not exceed 5% for any one month, except as provided for in item B above (section 1085 (a)). If you think you are not liable for these additional charges, attach a statement to your return explaining the delay in filing, payment, or both (section 1085). Note: You may compute your penalty and interest by accessing our Web site and clicking on Online Tax Center, or you may call and we will compute the penalty and interest for you (see Need help? on page 30).
New York S corporation termination year
When a New York S corporation terminates its federal or New York S election on a day other than the first day of a tax year, the tax year is divided into two tax periods (an S short year and a C short year). The corporation must file Form CT-3-S for the New York S short year and Form CT-3 or CT-4 for the New York C short year. When an IRC section 338(h)(10) election is made for a target corporation that is a New York S corporation, the target corporation must file two short-period (less than 12 months) reports. When filing the second short-period report, the federal taxable income (FTI) of the new target is the starting point for computing ENI. The total tax for the S short year and the C short year may not be less than the fixed dollar minimum tax determined as if the corporation were a C corporation for the entire tax year. For more information, see Form CT-3-S-I, Instructions for Forms CT-3-S and CT-3-S-ATT. The due date of the New York S corporation short year return (Form CT-3-S) is the same as the New York C corporation short year, even though they are treated as separate short tax years.
If you understate your tax
If the tax you report is understated by 10% or $5,000, whichever is greater, you must pay a penalty of 10% of the amount of understated tax. You can reduce the amount on which you pay penalty by subtracting any item for which (1) there is or was substantial authority for the way you treated it, or (2) there is adequate disclosure on the return or in an attached statement (see Article 27, section 1085(k)).
If you underpay your estimated tax
If you can reasonably expect your New York State franchise tax liability to exceed $1,000, you must file a declaration of estimated tax on Form CT-400. A penalty will be imposed if you fail to file a declaration of estimated tax or fail to pay the entire installment payment of estimated tax due. For complete details, see Form CT-222.
If you fail to provide information about interest paid to shareholders
Tax Law section 1085(n) provides for a penalty of $500 for failure to provide information about interest payments made to shareholders that were deducted in computing entire net income (ENI).
Reporting period
Use this tax return for calendar year 2008 and fiscal years that begin in 2008 and end in 2009. You can also use the 2008 return if: · you have a tax year of less than 12 months that begins and ends in 2009, and · the 2009 return is not yet available at the time you are required to file the return. In this case you must show your 2009 tax year on the 2008 return and take into account any tax law changes that are effective for tax years beginning after December 31, 2008. All filers must complete the beginning and ending tax year boxes in the upper right corner on page 1 of the form.
If you fail to provide information about your issuer's allocation percentage
Tax Law section 1085(o) provides for a penalty of $500 for failure to provide information needed to compute your issuer's allocation percentage (see instructions for Form CT-3, line 41).
Tax shelter penalties
The Tax Law also provides penalties for failure to disclose certain transactions and related information regarding tax shelters and for the underpayment of taxes due to participation in these shelters. For more information, refer to TSB-M-05(2)C, Disclosure of Certain Transactions and Related Information Regarding Tax Shelters.
Page 6 of 30
CT-3/4-I (2008)
General information
If you are an authorized foreign corporation, you are subject to the maintenance fee for the entire period in which you are authorized, whether or not you are doing business in New York State (see Foreign corporations authorized to do business but disclaiming tax liability on page 3).
Overview of corporation franchise tax
Tax bases
Corporations subject to tax under Tax Law Article 9-A generally must compute four distinct taxes and pay the tax that results in the largest amount owed. The four taxes include a tax on ENI, a tax on business and investment capital, a tax on MTI, and a fixed dollar minimum tax. In addition, if a corporation has any subsidiaries, it must pay a tax on its subsidiary capital. If you have any subsidiaries, you cannot file Form CT-4, but instead must file Form CT-3 or CT-3-A. For more information, see Which form to file on page 3.
Computation of tax for corporate partners
A taxpayer that is a partner in a partnership (a corporate partner) computes its tax for its interest in the partnership using either the aggregate method or entity method, whichever applies. (See Election by a foreign corporate limited partner on page 7 for the exception to these methods allowed under Regulation section 3-13.5.) Aggregate method -- Under the aggregate method, a corporate partner is viewed as having an undivided interest in the partnership's assets, liabilities, and items of receipts, income, gain, loss, and deduction. The partner is treated as participating in the partnership's transactions and activities. (Regulation section 3-13.3) Entity method -- Under the entity method, a partnership is treated as a separate entity and a corporate partner is treated as owning an interest in the partnership entity. The partner's interest is an intangible asset that is classified as business capital. To the extent a corporate partner's ENI includes its distributive share of partnership items of income, gain, loss, or deduction, those items are treated as business income. (Regulation section 3-13.4)
Fixed dollar minimum tax
The fixed dollar minimum tax is determined by the corporation's New York receipts. To avoid an erroneous assessment or a delay in your refund, you must enter an amount on Form CT-3, line 74a or Form CT-4, line 31. If you do not have New York receipts, enter 0 on the appropriate line. Failure to make an entry on the line may result in an assessment of tax or reduction of your refund or credit. A domestic corporation that is no longer doing business, employing capital, or owning or leasing property in New York State is exempt from the fixed dollar minimum tax for years following its final tax year and is no longer required to file a franchise tax return provided it meets the requirements listed in TSB-M-06(5)C.
Corporate partners required to file under the aggregate method
A corporate partner receiving a complete Form IT-204-CP must file using the aggregate method. In addition, a corporate partner must file using the aggregate method if the corporate partner has access to the information necessary to compute its tax using the aggregate method. A corporate partner is presumed to have access to the information and therefore is required to file using the aggregate method if it meets one or more of the following conditions: · it is conducting a unitary business with the partnership; · it is a general partner of the partnership or is a managing member of an LLC which is treated as a partnership for federal income tax purposes; · it has a 5% or more interest in the partnership; · it has reported information from the partnership in a prior tax year using the aggregate method; (continued)
Short periods -- fixed dollar minimum tax and maintenance fee
Compute the New York receipts for short periods (tax periods of less than 12 months) by dividing the amount of New York receipts by the number of months in the short period and multiplying the result by 12. The fixed dollar minimum tax and maintenance fee may be reduced for short periods: Period Reduction Not more than six months.................................................................... 50% More than six months but not more than nine months ........................ 25% More than nine months ........................................................................ None
Tax rates schedule
Tax base Tax rates
Table 1 -- ENI base for general business taxpayers Table 2 -- ENI base for qualified small business taxpayers ENI base of $290,000 or less: ENI base of more than $290,000 but not more than $390,000:
.071 .065 · $18,850 · plus 7.1% of the amount over $290,000 · plus 4.35% of the amount over $350,000 .065 .0015 .0004 .015
Table 3 -- For tax years beginning on or after January 31, 2007 ENI base for qualified New York manufacturers Table 4 -- Capital base Table 5 -- Qualified cooperative housing corporation capital base* Table 6 -- MTI base Table 7 -- Fixed dollar minimum tax For a corporation with New York receipts of: Not more than $100,000 More than $100,000 but not over $250,000: More than $250,000 but not over $500,000: More than $500,000 but not over $1,000,000: More than $1,000,000 but not over $5,000,000: More than $5,000,000 but not over $25,000,000: Over $25,000,000
$ 25** $ 75** $ 175** $ 500 $1,500 $3,500 $5,000
Table 8 -- Subsidiary capital base .0009 *See Cooperative housing corporations on page 7. **Foreign authorized corporations: If the total of your tax (including tax imposed under Article 9) and MTA surcharge is less than $300, you must increase your payment accordingly to satisfy the $300 maintenance fee requirement.
General information
· its partnership interest constitutes more than 50% of its total assets; · its basis in its interest in the partnership determined under IRC section 705 on the last day of the partnership year that ends within or with the taxpayer's tax year is more than $5,000,000; or · any member of its affiliated group has the information necessary to perform such computation. A corporate partner that does not receive a complete Form IT-204-CP may file using the entity method only if it does not meet any of the conditions listed beginning on page 6 and does not have access (and will not have access within the time period allowed for filing a return with regard to all extensions of time to file) to the information necessary to compute its tax using the aggregate method and certifies these facts to the Tax Commissioner (see Regulation section 3-13.2(b)). Computation of tax under the aggregate method -- The taxpayer's distributive share (see IRC section 704) of each partnership item of receipts, income, gain, loss, and deduction, and the taxpayer's proportionate part of each partnership asset, liability, and partnership activity are included in the computation of the taxpayer's ENI base, capital base, MTI base, and the fixed dollar minimum. These items have the same source and character in the hands of the partner for Article 9-A purposes that the items have for the partner for federal income tax purposes. (Regulation section 3-13.3) Computation of tax under the entity method -- A corporate partner is treated as owning an interest in the partnership entity for purposes of determining the taxes measured by the ENI base, capital base, MTI base, and the fixed dollar minimum. The partner's interest is an intangible asset which is business capital. (Regulation section 3-13.4) Election by a foreign corporate limited partner -- A foreign corporation that is a limited partner in one or more limited partnerships, that is subject to tax solely as a result of the application of Regulation section 1-3.2(a)(6) and that does not file on a combined basis for Article 9-A purposes, may elect to compute its tax by taking into account only its distributive share of each partnership item of receipts, income, gain, loss, and deduction (including any modifications) and its proportionate part of each asset, liability, and partnership activity of the limited partnership. (Regulation section 3-13.5) This election may not be made if the limited partnership and corporate group are engaged in a unitary business, wherever conducted, and there are substantial inter-entity transactions between the limited partnership and the corporate group. Corporate group means the corporate limited partner itself or, if it is a member of an affiliated group, the corporate limited partner and all other members of such affiliated group. Affiliated group has the same meaning as such term is defined in IRC section 1504 without regard to the exclusions provided for in section 1504(b). However, the term common parent corporation is deemed to mean any person as defined in IRC section 7701(a)(1). If the taxpayer meets the criteria to make the election and does not have access to the information necessary to do the computation, the taxpayer may treat its distributive share of the partnership's items of income, gain, loss, and deduction as business income and its interest in the partnership as business capital, and may allocate that business income and capital entirely to New York State.
CT-3/4-I (2008) Page 7 of 30
The business allocation formula used by these foreign airlines is the business allocation formula based on receipts, payroll, and property, as opposed to the special airline formula based on arrivals and departures, with modifications. However, if the country in which the foreign airline is based does not provide a similar exemption from tax with respect to United States airlines, the foreign airline is not entitled to the exclusions from income and capital described above and must use the special airline allocation formula. For more information, see TSB-M-94(2)C, Important Notice: Summary of 1994 Corporation Tax Law Changes.
How to fill out your tax return
Important identifying information
When preparing your corporation tax return, please be sure to accurately complete the corporation's identifying information (employer identification number (EIN) and file number) including your current address. Keep a record of your identifying information for future use. If you use a paid preparer or accounting firm, make sure they use your complete and accurate information when completing all your forms.
Are you claiming an overpayment?
If you are claiming an overpayment on line 44 of Form CT-4, or line 94 of Form CT-3, mark an X in the box on page 1 of your return to the right of your EIN and file number.
Name, address, and business information
Enter the corporation's legal name, and also enter the corporation's mailing name if different from the corporation's legal name. If your address has changed, please enter your new address in the appropriate area and mark an X in the box under the address so that we can update your address for this tax type. Do not mark an X in this box for any change of business information other than for your address. You must report any changes in your business name, ID number, mailing address, physical address, telephone number, or owner/officer information on Form DTF-95, Business Tax Account Update. If only your address has changed, you may use Form DTF-96, Report of Address Change for Business Tax Accounts, to correct your address for this and all other tax types. You can get these forms from our Web site, or by fax or phone (see Need help? on page 30).
Whole dollar amounts
You may elect to show amounts in whole dollars rather than in dollars and cents. Round any amount from 50 cents through 99 cents to the next higher dollar. Round any amount less than 50 cents to the next lower dollar.
Negative amounts
Show any negative amounts with a minus (-) sign.
Percentages
When computing percentages, convert decimals into percentages by moving the decimal point two spaces to the right. Round percentages to four decimal places. Example: 5,000/7,500 = 0.6666666 = 66.6667%.
Cooperative housing corporations
A qualified cooperative housing corporation is entitled to use a reduced tax rate of .0004 when computing its tax using the capital base. A corporation that has only one class of stock that entitles the shareholder to live in a house or an apartment in a building owned or leased by the corporation may be a cooperative housing corporation. For a complete definition, see IRC section 216.
Entering dates
Unless you are specifically directed to use a different format, enter dates in the mm-dd-yy format (using dashes and not slashes).
Foreign airlines
Foreign airlines that have a foreign air carrier permit pursuant to section 402 of the Federal Aviation Act of 1958 may exclude from ENI all income from international operations effectively connected to the United States, foreign passive income, and income earned from overseas operations, provided the foreign country in which the airline is based has a similar exemption from tax with respect to United States airlines. Foreign airlines may also exclude business and investment assets used in connection with the exempt income from the tax computed on capital.
Third-party designee
If you want to authorize another person (third-party designee) to discuss this tax return with the New York State Tax Department, mark an X in the Yes box in the Third-party designee area of your return. Also print the designee's name, phone number, and any five-digit number the designee chooses as his or her personal identification number (PIN). If you want to authorize the paid preparer who signed your return to discuss the return with the Tax Department, print the preparer's name in the space for the designee's name and enter the preparer's phone number in the space for the designee's phone number. You do not have to provide the other information requested. If you do not want to authorize another person, mark an X in the No box.
Page 8 of 30
CT-3/4-I (2008)
General information and Line instructions for Form CT-4
-- If you file federal Form 1120-H or federal Form 1120-POL, use the amount from line 19. -- If you file federal Form 1120-C, use the amount from line 25 less the amount from line 26a. -- If you are a member of a federal affiliated group that files a consolidated return, complete a pro forma 1120 reporting the FTI you would have been required to report on a separate federal tax return, and attach a copy of the federal consolidating workpaper indicating your separate taxable income before any elimination of intercorporate transactions included in the federal consolidated return. -- If you are a federal S corporation filing federal Form 1120S but you have not made an election to be treated as a New York State S corporation, you must determine the amount you would have had to report as FTI, before NOL and special deductions, were you not a federal S corporation. Attach a separate sheet showing how you determined this amount. In general, the items affected from Form 1120 are: · dividends · interest · gross rents · gross royalties · capital gain net income · charitable contributions -- If you are exempt from federal income tax but subject to New York State franchise tax, you must determine the amount you would have had to report as FTI, before NOL and special deductions, were you not exempt. Attach a separate sheet showing how you determined the amount. -- If you have an amount of excess inclusion as a result of having a residual interest in a real estate mortgage investment conduit (REMIC), you must properly reflect this income in FTI.
If you mark the Yes box, you are authorizing the Tax Department to discuss with the designee any questions that may arise during the processing of your return. You are also authorizing the designee to: · give the Tax Department any information that is missing from your return; · call the Tax Department for information about the processing of your return or the status of your refund or payment(s); and · respond to certain Tax Department notices that you shared with the designee about math errors, offsets, and return preparation. The notices will not be sent to the designee. You are not authorizing the designee to receive your refund check, bind you to anything (including any additional tax liability), or otherwise represent you before the Tax Department. If you want the designee to perform those services for you, you must file Form POA-1, Power of Attorney, making that designation with the Tax Department. Copies of statutory tax notices or documents (such as a Notice of Deficiency) will only be sent to your designee if you file Form POA-1. You cannot change the PIN. The authorization will automatically end on the due date (without regard to extensions) for filing your next year's tax return.
Signature
The return must be certified by the president, vice president, treasurer, assistant treasurer, chief accounting officer, or other officer authorized by the taxpayer corporation. The return of an association, publicly traded partnership, or business conducted by a trustee or trustees must be signed by a person authorized to act for the association, publicly traded partnership, or business. If an outside individual or firm prepared the return, the signature of the person and the name, address, and identification number of the firm must be included. Failure to sign the return will delay the processing of any refunds and may result in penalties.
Lines 2 through 5 -- Additions
Use lines 2 through 5 to add items that are not included in FTI but that must be included in New York State ENI. Line 2 -- Enter all interest received or accrued from federal, state, municipal, and other obligations that was exempt from federal income tax and is, therefore, not included on line 1. You may deduct from this amount any expenses attributable to that interest but denied deductibility under IRC section 265. Attach a list of items included on this line. Line 3 -- Enter the amount deducted in computing FTI for interest on indebtedness paid to a corporate stockholder owning more than 50% of your issued and outstanding voting stock. If you do not make this entry, the indebtedness will not constitute subsidiary capital in the hands of such corporate stockholder, and the stockholder will not be allowed to exclude the interest from its ENI as income from subsidiary capital. Interest on indebtedness paid to a corporate stockholder is only required to be added back to ENI by the payer, when the corporate stockholder payee has deducted the interest as income attributable to subsidiary capital on its New York State franchise tax return. Line 4 -- Enter the amount deducted on your federal return for New York State taxes imposed under Article 9, sections 183, 183-a, 184, 184-a, and Articles 9-A and 32. This includes the MTA surcharge. However, do not include New York City taxes. Include the amount deducted for taxes paid or accrued to the United States, its possessions, other U.S. states, their political subdivisions, any foreign country, and the District of Columbia, if the tax or taxes are on or are measured by profits or income, or include profits or income as a measure of tax, including taxes expressly in lieu of the foregoing. Line 5 -- Use this line if: · The corporation claims the federal ACRS/MACRS deduction for property placed in service either in or outside New York State after 1980 in tax periods beginning before 1985; or · The corporation claims the federal ACRS/MACRS deduction for property placed in service outside New York State in tax periods beginning after 1984 and before tax periods beginning in 1994, and the corporation made the election to continue using the IRC section 167 depreciation deduction for the property; or · The corporation claims a 30%/50% federal special depreciation deduction under IRC section 168(k) for qualified property (excluding qualified resurgence zone property described in Tax Law section 208.9(q) or qualified New York liberty zone property described in IRC section 1400L(b)(2)) placed in service on or after June 1, 2003, in tax years beginning after December 31, 2002; or
Is your return in processible form?
Returns must be prepared in a manner that will permit their routine handling and processing and include all pages. We will not pay interest on an overpayment of taxes until a return is in a processible form which includes a required signature.
Use of reproduced and computerized forms
Photocopies of returns are acceptable if they are of good quality and have an original signature in the proper place. We will accept computer-produced corporation tax returns if they meet our printing specifications. For more information, see Publication 76, Specifications for Reproduction of New York State Corporation Tax Forms.
Line instructions for Form CT-4, General Business Corporation Franchise Tax Return Short Form
Line A -- Make your check or money order payable in United States funds. We will accept a foreign check or foreign money order only if payable through a United States bank or if marked Payable in U.S. funds. Line D -- A new law authorizes the Tax Department to waive civil and criminal penalties for taxpayers who disclose and pay overdue taxes. Under the Tax Department's new Voluntary Disclosure and Compliance Program, eligible taxpayers who owe back taxes can avoid monetary penalties and possible criminal charges by: · telling the Tax Department what taxes they owe; · paying those taxes; and · entering an agreement to pay all future taxes. It's easy to apply. Visit our Web site at www.nystax.gov. Just follow the prompts, answer a few questions, and submit your application electronically.
Computation of entire net income (ENI) base
Line 1 -- Enter your federal taxable income (FTI), before NOL and special deductions, as required to be reported to the U.S. Treasury Department. -- If you file federal Form 1120, use the amount from line 28.
Line instructions for Form CT-4
· The corporation disposes this year of either ACRS/MACRS property, or property for which you claimed a 30%/50% federal special depreciation, and the New York depreciation modifications applied to the property in any prior years. If line 5 applies, enter the amount from Form CT-399, line 3, column E, the amount of your federal deduction that must be added back to FTI, or, if you disposed of property this year, use the amount from Form CT-399, line 10, column A. Enter your recomputed deduction on line 8 of this form. For more information, see Form CT-399-I, Instructions for Form CT-399. ·
CT-3/4-I (2008) Page 9 of 30
The corporation claims the federal ACRS/MACRS deduction for property placed in service outside New York State in tax periods beginning after 1984 and before tax periods beginning in 1994, and the corporation made the election to continue using the IRC section 167 depreciation deduction for the property; or The corporation claims a 30%/50% federal special depreciation deduction under IRC section 168(k) for qualified property (excluding qualified resurgence zone property described in Tax Law section 208.9(q) or qualified New York liberty zone property described in IRC section 1400L(b)(2)) placed in service on or after June 1, 2003, in tax years beginning after December 31, 2002; or The corporation disposes this year of either ACRS/MACRS property, or property for which you claimed a 30%/50% federal special depreciation, and the New York depreciation modifications applied to the property in any prior years.
·
Lines 7 through 9 -- Subtractions
Use lines 7 through 9 to subtract items that are included in FTI, but should not be included in New York State ENI. Line 7 -- Enter any New York State NOL carried forward from prior years. Attach a separate sheet with full details of both federal and New York State NOLs claimed. You must determine a New York State net operating loss deduction (NOLD) as if you had elected under IRC section 172 to relinquish the carryback provisions, except for the first $10,000 which you may carry back to the preceding years (section 208.9(f)). These rules apply: A. IRC section 172 federal losses must be adjusted in accordance with Article 9-A, section 208.9(a), (b), and (g). B. · For NOLs incurred in tax years beginning on or before August 5, 1997, the NOL may be carried back three years and carried forward 15 years. · For NOLs incurred in tax years beginning after August 5, 1997, the NOL may be carried back two years (with an exception for certain disaster losses) and carried forward 20 years. · For certain NOLs incurred in tax years ending in 2001 and 2002, the NOL may be carried back five years, unless the taxpayer elects for federal tax purposes to disregard the five-year carryback. If you are claiming a five-year carryback, please attach a schedule of the computation. For more information, see TSB-M-02(2)C, Federal Job Creation and Worker Assistance Act of 2002. · For certain NOLs attributable to Hurricane Katrina, the qualified Gulf Opportunity Zone (GO Zone) loss portion of the NOL may be carried back five years. C. If you have elected to carry back an NOL for federal tax purposes, you may carry back only the first $10,000 of an NOL to the preceding years. Use an amended return or Form CT-9 to request a refund based on an NOL carryback. D. Any portion of the $10,000 NOL not used as a carryback may be carried forward. E. If you have elected for federal tax purposes to relinquish the carryback of an NOL, you may not carry back an NOL for state tax purposes, and you must submit a copy of your federal election. F. No deduction is allowed for an NOL sustained during any year in which the corporation was not subject to tax under Article 9-A. G. The New York State NOLD for any particular year is limited to the federal NOLD for that year. For the purposes of this limitation, a corporation that has elected to carry back up to $10,000 of its NOL for New York State purposes should compute its federal NOLD as if it only carried back the same $10,000 (see items C, D, and E). H. A New York C corporation is not allowed a deduction for a NOL sustained during a New York S year. A New York S year is treated as a tax year for purposes of determining the number of tax years to which the NOL may be carried back or forward (Tax Law section 208.9(f)(4)). I. These rules also apply to a federal S corporation not electing New York S corporation treatment and to any corporation included in a consolidated group for federal purposes but filing on a separate basis for New York State purposes. These corporations should compute their NOLs and NOLDs as if filing on a pro forma or separate basis for federal income tax purposes. However, instead of a copy of the federal election to relinquish the carryback of an NOL, you must file a request in writing to relinquish the carryback on or before the due date (or extended due date) of the return for the loss year. Any corporation that does not file a request on time with the Tax Department must carry the first $10,000 of the NOL back before the NOL can be carried forward. Note: Patronage-sourced NOLS cannot be used to reduce nonpatronage-sourced taxable income. Line 8 -- Use this line if: · The corporation claims the federal ACRS/MACRS deduction for property placed in service either in or outside New York State after 1980 in tax periods beginning before 1985; or ·
If line 8 applies, enter the amount from Form CT-399, line 3, column I, or, if you have disposed of property this year, use the amount from Form CT-399, line 10, column B, and attach the form. For more information, see Form CT-399-I. Line 9 -- If you have received a credit or refund of tax for which you were not previously allowed to take a deduction when you determined your ENI, but which was included in your FTI, enter the amount of the credit and refund. The taxes to which this provision is applicable include the taxes imposed by Article 9-A and Article 32, as well as by Article 9, sections 183, 183-a, 184, and 184-a of the New York State Tax Law.
Line 12 -- ENI base tax computation
General business taxpayers
If you do not qualify as a small business taxpayer (as defined below) or a qualified New York manufacturer (see page 12, line 71), multiply line 11 by 7.1%. Enter the amount on line 12 and on line 28, and continue with line 13.
Small business taxpayer definition
A corporation qualifies as a small business taxpayer if: -- its ENI (before allocation) is not more than $390,000; -- the total amount of money and other property it received for stock, as a contribution to capital and as paid-in surplus, is not more than $1,000,000 as of the last day of its tax year; and -- the corporation is not part of an affiliated group, as defined in IRC section 1504, unless the group itself would have met the above criteria if it had filed a combined return. Short periods: A corporation that files Form CT-4 for a tax year of less than 12 months must annualize ENI from Form CT-4, line 11, to determine if it qualifies as a small business taxpayer. For a period of less than 12 months, annualize the ENI (line 11) by dividing it by the number of months in the short period and multiplying the result by 12.
Small business taxpayers
Complete lines 68 and 69 if you use the small business taxpayer tax rate. If your ENI base is $290,000 or less, multiply line 11 by 6.5% (.065) and enter the result on line 12 and line 28, then continue with line 13. If your ENI base is more than $290,000 but not over $390,000, your effective rate will be between 6.5% and 7.1%. Your tax is: 1. $18,850 ($290,000 times 6.5%), plus 2. 7.1% (.071) of any amount over $290,000, plus 3. 4.35% (.0435) of any amount over $350,000. Use Worksheet A below to compute your tax:
Worksheet A
ENI base from line 11 Subtract .................... Multiply balance ........ Subtract .................... Multiply balance ........ 60,000 by .0435 = ........ C. 290,000 by .071 = .......... B. .......................... A. $18,850
Add boxes A, B, and C; enter the result here and on lines 12 and 28 ........................................................ D. A small business taxpayer's tax on the ENI base will never exceed $27,690 for the tax period.
Page 10 of 30
CT-3/4-I (2008)
Line instructions for Form CT-4
Attach a copy of Form CT-399 or federal Form 4626 to your Form CT-4. Line 25 -- Enter your ANOLD. Attach a separate sheet with full details of the New York State alternative net operating losses (ANOLs) claimed. Determine the ANOLD in the manner described on page 9, under line 7, for computing the regular NOLD, except that you must redetermine the NOL for any year beginning after 1989 that is included in the ANOLD with the adjustments and tax preferences required to be used in computing the MTI for that year. (Note: The required addback of regular NOLD is not an adjustment or tax preference.) Take an item of tax preference into account only to the extent it increased the regular NOL. In determining the ANOLs carrying into the ANOLD of any given year, the following rules apply: A. Exclude losses from years when the taxpayer was not subject to Article 9-A. B. Pre-1990 NOLs available for carryforward to 1990 under the regular tax are available for carryforward to 1990 under the minimum tax, and without the application of minimum tax adjustments. C. ANOLs must be carried to the appropriate carry years under D, whether or not the tax on MTI is the largest tax for the particular carry year. D. ANOLs must be carried using the conventions of IRC section 172(b)(2). The carryback must be exhausted in the earliest available carry year, except as provided in E and F below. · For NOLs incurred in tax years beginning after August 5, 1997, the ANOL may be carried back two years (with an exception for certain disaster losses) and carried forward 20 years. · For NOLs incurred in tax years beginning on or before August 5, 1997, the ANOL may be carried back three years and carried forward 15 years. · For certain NOLs incurred in tax years ending in 2001 and 2002, the ANOL may be carried back five years unless the taxpayer elects for federal tax purposes to disregard the five-year carryback. If you are claiming a five-year carryback, attach a schedule of the computation. · For certain NOLs attributable to Hurricane Katrina, the qualified GO Zone loss portion of the ANOL may be carried back five years. E. The carryback of each ANOL is limited to $10,000, as is the case with the regular tax NOLD. F. The federal election to forgo carryback of an NOL applies to the related New York State ANOL. G. ANOLs must be applied against 90% of MTI (determined without regard to the ANOLD) each year, even though some lower limitation on the ANOLD actually applies for that year. Limitations on the ANOLD are described in H through J below. H. In applying the carryout rules under D above, ANOLs must be carried out to tax years beginning in 1990 through 1993, even though no ANOLD was allowed in those years. I. For tax years beginning in 1994 only, the ANOLD is limited to 45% of MTI, computed without regard to the ANOLD, and thereafter to 90% of MTI, computed without regard to the ANOLD. J. The ANOLD for any particular year is limited to the federal regular tax NOLD for that year. For more information, see TSB-M-94(5)C, Computation of Minimum Taxable Income and Minimum Tax Credit. Line 27 -- If your largest tax is based on the MTI base, you may be allowed a minimum tax credit in a future year. Complete Form CT-38, Minimum Tax Credit, Schedules A, B, and D to compute your minimum tax credit generated this year and carried forward to future years. Keep a copy for your records. Use this form to determine your minimum tax credit to be used against your tax on ENI in the future.
If you are a qualified New York manufacturer (see page 12, line 71) multiply line 11 by 6.5% (.065). Enter the result on line 12 and on line 28, and continue with line 13. Mark an X in the applicable box on line 71 to avoid an erroneous assessment or delayed refund.
Computation of capital base
Lines 13 through 19
To determine the value of your assets for the capital base computations, you must include real property and marketable securities at fair market value. All other property must be included at the value shown on your books in accordance with generally accepted accounting principles (GAAP). Use lines 15 and 16 to adjust the value of the assets you reported on your federal return. If you are not required to complete the balance sheet on your federal tax return, use the amount that would have been reported on the federal return. On lines 13 through 18, enter the values at the beginning of the year in column A and at the end of the year in column B. Enter the average value in column C. Average value is generally computed quarterly if your usual accounting practice permits it. However, you may use a more frequent basis such as monthly, weekly, or daily. If your usual accounting practice does not permit a quarterly or more frequent computation of the average value of assets, you may use a semiannual or annual computation if no distortion of average value results. Line 16 -- Enter the fair market value of real property and marketable securities included on line 14. The fair market value of an asset is the price (without deduction of an encumbrance whether or not the taxpayer is personally liable) at which a willing seller will sell and a willing purchaser will buy. You can generally find the fair market value of marketable securities from price quotes in financial newspapers. For determination of fair market value of real property, see TSB-M-85(18.1)C, Valuation of Real Property. Line 18 -- Enter the amount of all liabilities attributable to assets on line 13, both long and short term. Use the same method of averaging used to determine average value of assets. Line 20 -- Capital base tax computation -- Multiply line 19 by the tax rate of .0015. Cooperative housing corporations multiply line 19 by .0004. Enter the result on line 29, but do not enter more than $350,000 if you are a qualified New York manufacturer, and do not enter more than $10,000,000 for all other taxpayers. Complete line 70 if you are claiming qualified New York manufacturer status for purposes of a lower capital base tax limitation. If you have been taxable in New York State for less than two years, read the instructions below for line 29 to see if you qualify as a new small business corporation. Note: All cooperative housing corporations must file Form TP-588, Cooperative Housing Corporation Information Return, twice a year. For more information, see the instructions on Form TP-588. Short periods -- If a tax return is for a period of less than 12 months, determine the amount of business capital by multiplying the average value by the number of months covered by the return and dividing by 12 (see 20 New York Codes, Rules and Regulations (NYCRR) section 3-3.7).
Computation of minimum taxable income (MTI) base
Lines 21 through 27
To calculate your MTI, you must add to your ENI federal tax preference items, and add or subtract certain federal adjustments used to compute federal alternative MTI (federal Form 4626). To complete the calculation, add the New York State NOLD and subtract the ANOLD. You must determine an MTI base and tax whether or not you file federal Form 4626, Alternative Minimum Tax -- Corporations. If you have any federal adjustment or tax preference items other than the depreciation adjustment or the ANOLD, you may not use Form CT-4. Use Form CT-3 to compute your tax. Line 22 -- If you are required to complete Form CT-399, Part 4, enter the amount from Form CT-399, line 15 or 16. If you are not required to complete Form CT-399, Part 4, enter the amount from federal Form 4626, line 2a. If you were not required to file federal Form 4626, compute the amount that would have been reported on line 2a of that form.
Computation of tax
Line 29 -- Enter the tax computed on your capital base from line 20. Qualified New York manufacturers do not enter more than $350,000, and all other taxpayers do not enter more than $10,000,000. A new small business corporation may claim an exemption from the tax on the capital base for its first two tax years if it meets the requirements on page 11. If you are claiming this exemption, enter 0 on line 29 and mark the box indicating which year the exemption is for. You will continue to be liable for the largest tax computed on lines 27, 28, or 30. Attach a separate sheet covering all points listed on page 11. If you do not supply the information, we will disallow the exemption.
Line instructions for Form CT-4
Note: Do not confuse the definition below with the definition of a small business taxpayer in the instructions for line 12. To qualify, the corporation must meet the federal definition of a small business corporation (IRC section 1244(c)(3), disregarding the second sentence of subparagraph (A)). The requirements are: -- The total amount of money and other property the corporation received for stock, as a contribution to capital and as paid-in surplus, may not be more than $1,000,000 on the last day of its tax year. -- The corporation cannot be similar in ownership and operation to a business now taxable or previously taxable under Tax Law Article 9 (section 183, 184, 185, or 186), 9-A, 22, 32, or 33 (or a business entity which had income or losses includable under Article 22 or which would have been taxable under Article 23 had that article not been repealed). -- 90% percent of the corporation's assets and 80% of its employees must be located in New York State. -- The corporation cannot have as a shareholder a corporation that owns over 50% of its voting stock, and that is taxable under Article 9 (section 183, 184, 185, or 186), 9-A, 32, or 33, unless the corporation itself qualifies as a small business corporation. Line 30 -- Fixed dollar minimum tax -- The fixed dollar minimum tax is determined by the corporation's New York receipts. See Table 7 of the Tax rates schedule on page 6 to determine the applicable fixed dollar minimum tax. Homeowners' associations with no FTI are not subject to the fixed dollar minimum tax and must enter 0 on line 30. A homeowners association filing federal Form 1120-H must also mark an X in the applicable box on line B on page 1 of the return to avoid an erroneous assessment or delayed refund. To avoid an erroneous assessment or a delay in your refund, you must enter an amount on line 31. If you do not have New York receipts, enter 0. Line 31 -- New York receipts -- Enter business receipts from the sales of tangible personal property, services performed, rentals, royalties, receipts from the sales of rights for closed circuit and cable television transmissions, and all other business receipts received in the regular course of business within New York State. These items can be found on federal Form 1120, Income section. For a short period, annualize New York receipts by dividing by the number of months in the short period and multiplying the result by 12. Under New York State Regulation section 4-4.6(e), receipts from the sales of capital assets are not business receipts and are not included in New York receipts. Line 32 -- Enter the amount from line 27, 28, 29, or 30, whichever is largest. Small business taxpayer exception: If line 29 (tax on capital base) is larger than line 28 (tax on ENI base) only because of the reduced rate applicable to small business taxpayers, enter the largest amount from line 27, 28, or 30. If you qualify as both a small business taxpayer and a qualified New York manufacturer you must use the small business taxpayer rate for purposes of ENI base in order to be exempt from the tax on the capital base under the small business taxpayer exception. Mark an X in the Yes box on line 68 to indicate that you are claiming small business taxpayer status (do not mark an X in the Yes box on line 71). Line 33b -- If the tax on line 32 exceeds $1,000 and you did not file Form CT-5, a mandatory first installment is required for the period following the one that is covered by this return. If the tax on line 32 exceeds $1,000 but is not greater than $100,000, multiply the amount on line 32 by 25%. If the tax on line 32 exceeds $100,000, multiply the amount on line 32 by 30%. Line 37 -- Form CT-222, Underpayment of Estimated Tax by a Corporation, is filed by a corporation to inform the Tax Department that the corporation meets one of the exceptions to the underpayment of estimated tax penalty pursuant to Tax Law section 1085(d). Lines 38 and 39 -- If you are not filing this return on time, you must pay interest and additional charges. See Penalties and interest on page 5.
CT-3/4-I (2008) Page 11 of 30
Line 41a -- Return a Gift to Wildlife -- Your contribution will benefit New York's fish, wildlife, and marine resources, and you can receive a free issue of Conservationist magazine. Call 1 800 678-6399 for your free sample issue. For more information about New York State's environmental conservation programs, go to www.dec.ny.gov. For information about Conservationist, go to www.TheConservationist.org. Line 41b -- Breast Cancer Research and Education Fund -- Your contributions to the Breast Cancer Research and Education Fund have supported ground-breaking research projects in New York State. More dollars will support more studies that bring us closer to the cures and prevention of breast cancer. Help make breast cancer a disease of the past. Your contribution will be used to fund important biomedical research studies and education projects. New York State will match your contribution to the Breast Cancer Research and Education Fund, dollar for dollar. Line 41c -- Prostate Cancer Research, Detection, and Education Fund -- Your contribution will benefit the New York State Coalition to Cure Prostate Cancer. The coalition coordinates and manages prostate cancer research, detection, and education efforts in our state. New York State will match your contribution to the Prostate Cancer Research, Detection, and Education Fund, dollar for dollar. Line 41d -- National September 11 Memorial & Museum at the World Trade Center (National 9/11 Memorial) -- Your contribution to the National September 11 Memorial & Museum will help create the Memorial and Museum which will commemorate and honor the thousands of people who died in the attacks of September 11, 2001, and February 26, 1993. The Memorial will recognize the endurance of those who survived, the courage of those who risked their lives to save others, and the compassion of all who supported us in our darkest hours. Help New York State, the nation, and the world remember by making a contribution. For more information, go to www.national911memorial.org. Line 44 -- Unrequested refunds to be credited forward -- If the corporation overpays its tax, it will not automatically receive a refund. Instead, we will credit your overpayment to the following tax year unless you request a refund on line 48. We will notify you that the overpayment has been credited and explain how to request a refund of the credited amount. If you choose to request a refund of such credited amount, you must claim a refund of such overpayment prior to the original due date of the following year's return. Lines 45 through 48 -- You may apply an overpayment as a credit to your next state franchise tax period, or to your MTA surcharge for this period, or you may have it refunded. Indicate on these lines the amounts of overpayment you wish credited or refunded.
Collection of debts from your refund or overpayment
We will keep all or part of your refund or overpayment if you owe a past-due, legally enforceable debt to a New York State agency, or if you owe a New York City tax warrant judgment debt. We may also keep all or part of your refund or overpayment if you owe a past-due legally enforceable debt to another state, provided that state has entered into a reciprocal agreement with New York State. If we keep your refund or overpayment, we will notify you. A New York State agency includes any state department, board, bureau, division, commission, committee, public authority, public benefit corporation, council, office, or other entity performing a governmental or proprietary function for the state or a social services district. We will refund or apply as an overpayment any amount over your debt. If you have any questions about whether you owe a past-due, legally enforceable debt to a state agency, or to another state, or whether you owe a New York City tax warrant judgment debt, contact the state agency, the other state, or the New York City Department of Finance. For New York State tax liabilities only, call 1 800 835-3554 (from areas outside the U.S. and outside Canada, call (518) 485-6800) or write to: NYS Tax Department, Collections and Civil Enforcement Division, W A Harriman Campus, Albany NY 12227. Lines 49 through 54 -- Composition of prepayments on line 35 -- If you need more space, write see attached in this section, and attach a separate sheet showing all relevant prepayment information. Transfer the total shown on the attached sheet to line 35. Lines 55 through 59 -- Interest paid to shareholders -- Corporations that made interest payments, deducted in computing ENI, to a shareholder or shareholders owning, directly or indirectly, individually or in the aggregate, more than 50% of their issued capital stock, must provide the information requested in this section (section 211.2-a). A penalty of $500 is imposed for failing to provide this information (section 1085(n)).
Lines 41a through 41d
If you want to make a contribution to Return a Gift to Wildlife, Breast Cancer Research and Education Fund, Prostate Cancer Research Detection and Education Fund, National September 11 Memorial & Museum at the World Trade Center, or all four, enter the whole dollar amount(s) on the appropriate line(s). Your gift will increase your payment or reduce your overpayment. You cannot change the amount of your gift after you file your return.
Page 12 of 30
CT-3/4-I (2008)
Line instructions for Form CT-4 and Line instructions for Form CT-3
Line 63 -- Interest deducted -- Enter the total amount of interest deducted on your federal return that you used in computing your FTI on line 1. Lines 68 and 69 -- Small business taxpayer -- If you used the small business tax rate on line 12, you must mark an X in the Yes box on line 68 and complete line 69 to show that your corporation qualifies for the lower tax rate. If you qualify, provide the information requested in this section. Use your federal balance sheet amounts for stock and other paid-in capital. Use the worksheet below to determine the amount to enter on line 69. No. of shares Par value stock ...................................... No-par value stock ................................ Contributions to capital and paid-in surplus ....................... Total capital contributions; enter on line 69 ........................ For the definition of small business taxpayer, see Small business taxpayer definition on page 9. Line 70 -- If you are claiming qualified New York manufacturer status (see below) for purposes of a lower capital base tax limitation, you must mark an X in the Yes box. Qualified New York manufacturer is a manufacturer (as described below) that has property in New York State that is principally used by the taxpayer in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture, or commercial fishing, and either: · the adjusted basis of the property for federal income tax purposes is at least $1 million at the close of the tax year; or · all of its real and personal property is located in New York State. A corporation qualifies as a manufacturer if during the tax year the taxpayer is principally engaged in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture, or commercial fishing. A taxpayer is principally engaged in manufacturing activities if during the tax year more than 50% of its gross receipts are derived from receipts for the sale of goods produced by these activities. A qualified New York manufacturer also includes a taxpayer that is a qualified emerging technology company (QETC) as defined under Public Authorities Law section 3102-e(1)(c), except that the $10 million limitation under section 3102-e(1)(c)(1) does not apply. Line 71 -- If you are claiming qualified New York manufacturer status (see above) for purposes of a lower ENI tax rate, you must mark an X in the Yes box. For purposes of the lower ENI rate, the generation and distribution of electricity, the distribution of natural gas, and the production of steam associated with the generation of electricity are not considered manufacturing activities for purposes of the principally engaged test. Amount
Computation of entire net income (ENI) base
Line 1 -- Enter your federal taxable income (FTI), before NOL and special deductions, as required to be reported to the U.S. Treasury Department. -- If you file federal Form 1120, use the amount from line 28. -- If you file federal Form 1120-REIT, use the amount from line 20. -- If you file federal Form 1120-RIC, use the amount from line 24. -- If you file federal Form 1120-H or Form 1120-POL, use the amount from line 19. -- If you file federal Form 1120-C, use the amount from line 25 less the amount from line 26a. -- If you are a member of a federal affiliated group that files a consolidated return, complete a pro forma 1120 reporting the FTI you would have been required to report on a separate federal tax return, and attach a copy of the federal consolidating workpaper indicating your separate taxable income before any elimination of intercorporate transactions included in the federal consolidated return. -- If you are an S corporation filing federal Form 1120S but you have not made an election to be treated as a New York S corporation, you must determine the amount you would have had to report as FTI, before NOL and special deductions, were you not a federal S corporation. Attach a separate sheet showing how you determined this amount. In general, the items on Form 1120 affected are: · dividends · interest · gross rents · gross royalties · capital gain net income · charitable contributions -- If you file Form 1120-F, use the amount from Section II, line 29. Adjustments to worldwide income and loss are required on line 8 of Form CT-3. -- If you are exempt from federal income tax but subject to New York State franchise tax, you must determine the amount you would have had to report as FTI, before NOL and special deductions, were you not exempt. Attach a separate sheet showing how you determined the amount. -- If you have an amount of excess inclusion as a result of having a residual interest in a REMIC, you must properly reflect this income in FTI.
Lines 2 through 8 -- Additions
Use lines 2 through 8 to add items that you did not include in FTI but that you must include in New York State ENI. Line 2 -- Enter all interest received or accrued from federal, state, municipal, and other obligations that was exempt from federal income tax and is, therefore, not included on line 1. You may deduct from this amount any expenses attributable to that interest but denied deductibility under IRC section 265. Attach a list of items included on this line. Line 3 -- Enter the amount deducted in computing FTI for interest on indebtedness paid to a corporate stockholder owning more than 50% of your issued and outstanding voting stock. If you do not make this entry, the indebtedness will not constitute subsidiary capital in the hands of such corporate stockholder, and the stockholder will not be allowed to exclude the interest from its ENI as income from subsidiary capital. Interest on indebtedness paid to a corporate stockholder is only required to be added back to ENI by the payer, when the corporate stockholder payee has deducted the interest as income attributable to subsidiary capital on its New York State franchise tax return.
Line instructions for Form CT-3, General Business Corporation Franchise Tax Return
Line A -- Make your check or money order payable in United States funds. We will accept a foreign check or foreign money order only if payable through a United States bank or if marked Payable in U.S. funds. Line D -- A new law authorizes the Tax Department to waive civil and criminal penalties for taxpayers who disclose and pay overdue taxes. Under the Tax Department's new Voluntary Disclosure and Compliance Program, eligible taxpayers who owe back taxes can avoid monetary penalties and possible criminal charges by: · telling the Tax Department what taxes they owe; · paying those taxes; and · entering an agreement to pay all future taxes. It's easy to apply. Visit our Web site at www.nystax.gov. Just follow the prompts, answer a few questions, and submit your application electronically.
Lines 4a, 4b, 5a, and 5b -- Subsidiaries
If you have a subsidiary, you must complete Form CT-3-ATT, Schedule C. If you have subsidiary capital included on Form CT-3-ATT, line 27, column C, complete lines 4a, 4b, 5a, and 5b to report any expenses directly or indirectly attributable to subsidiary capital. See TSB-M-88(5)C, Direct and Indirect Attribution of Deductions, Article 9-A, for complete details on the attribution of interest expenses and TSB-M-95(2)C, Attribution of Noninterest Deductions, on the attribution of noninterest expenses. If you do not have a subsidiary, enter 0 on lines 4a, 4b, 5a, and 5b. See definitions of subsidiary and subsidiary capital below. A subsidiary is a corporation (except a DISC) of which over 50% of the number of shares entitling the holders to vote for the election of directors or trustees is owned by the taxpayer. The test of ownership is actual beneficial ownership, rather than mere record title as shown by the stock books of the
Line instructions for Form CT-3
issuing corporation. Actual beneficial ownership of stock does not mean indirect ownership or control of a corporation through a structure consisting of several tiers and/or chains of corporations and/or partnerships. A limited liability company (LLC) that is over 50% owned by a corporation and elects to be treated as a corporation for federal tax purposes is a subsidiary. For more information, see 20 NYCRR 3-6.2. Subsidiary capital is the value of certain assets reduced by attributable liabilities. These assets include all investments in the stock of subsidiary corporations, plus all debts from subsidiary corporations (other than accounts receivable acquired for services rendered or property sold to customers in the ordinary course of business) whether or not evidenced by bonds or other written instruments, on which interest is not claimed and deducted by the subsidiary under Tax Law Article 9-A, 32, or 33. For more information, see 20 NYCRR 3-6.3. Line 4a -- Enter the amount of interest deductions allowed in the computation of ENI (includable in the amount on Line 5a worksheet, line E, on page 13) that are directly attributable to subsidiary capital (or to income, losses, or gains from subsidiary capital). Line 4b -- Enter the amount of noninterest deductions allowed in the computation of ENI (includable in the amount on Line 5b worksheet, line E, on page 28) that are directly attributable to subsidiary capital (or to income, losses, or gains from subsidiary capital). The direct attribution of deductions is based on an analysis of facts and circumstances. Deductions directly attributable to subsidiary capital or income include but are not limited to the following: -- interest on debt incurred to buy subsidiary capital -- salaries of employees engaged in the management, supervision, or conservation of subsidiary capital -- expenses for legal advice relating to the acquisition of subsidiary capital -- stewardship deductions relating to subsidiary capital Do not include on lines 4a and 4b interest deductions or noninterest deductions that are directly attributable to: -- Investment capital (or to income, losses, or gains from investment capital); see Form CT-3-ATT, line 15 and line 16. -- Business capital (or to income, losses, or gains from business capital). Note: For tax years beginning in 1995 or after, certain expenses may, at the taxpayer's election, be deemed to be directly attributable to business capital (or income, losses, or gains from business capital). These expenses include, among others: depletion, advertising, research and development expenses, compensation packages of chief executive officer, chief financial officer, and chief operating officer, charitable contributions, and internal auditing expenses. For a complete listing of deductions so deemed attributable to business capital, see TSB-M-95(2)C, section III. If at least 95% of the noninterest deductions of an operating division or corporation are directly attributable to a particular class of capital or income, 100% of the noninterest deductions of that division or corporation may be directly attributed to that class of capital or income. For more information, see TSB-M-95(2)C, section IV. Complete lines 5a and 5b if you have subsidiary capital includable on Form CT-3-ATT, line 27, column C (otherwise, enter 0 on lines 5a and 5b). Line 5a -- Compute the amount of interest deductions that are indirectly attributable to subsidiary capital (or to income, gains, or losses from subsidiary capital) using Line 5a worksheet below.
CT-3/4-I (2008) Page 13 of 30
Line 5a worksheet
Interest deductions indirectly attributable to subsidiary capital
A. Enter federal interest deduction shown on federal Form 1120 ................................................ A. B. Enter amounts of interest deductions included on line A that must be added back to FTI in computing ENI (other than the amounts on Form CT-3, lines 4a and 5a); for example, interest deductions taken in computing an amount included on Form CT-3, line 15. Enter the Form CT-3 line numbers and amounts below.
Total B. C. Balance (subtract line B from line A) ......................... C. D. Enter amounts of interest deductions that must be subtracted from FTI in computing ENI; for example, the interest deductions taken in computing the amount on Form CT-3, line 2, or amounts related to foreign source income not included on federal Form 1120. Enter the Form CT-3 line numbers and amounts below. Line # Line # Line # Amount Amount Amount Line # Line # Line # Amount Amount Amount
Total D.
E. Total New York State interest deductions included in ENI (add lines C and D) ...................................... F. Enter any interest deductions directly attributable to subsidiary capital included on Form CT-3, line 4a .... G. Enter any interest deductions directly attributable to investment capital included on Form CT-3-ATT, line 15................................................................... H. Enter any interest deductions directly attributable to business capital ............................................... I. Subtotal (add lines F, G, and H) ............................... J. Interest deductions subject to indirect attribution (subtract line I from line E) ........................................ K. Enter the amount from Form CT-3-ATT, line 27, column C .............................................................. L. Enter the amount from Form CT-3, line 30, column C .............................................................. M. Percentage (divide line K by line L) ..........................
E. F.
G. H. I. J. K. L. M.
%
N. Amount of interest deductions indirectly attributable to subsidiary capital (multiply line J by line M; enter here and on Form CT-3, line 5a) .............. N. Line 5b -- Enter the amount of noninterest deductions that are indirectly attributable to subsidiary capital (or to income, gains, or losses from subsidiary capital) using Line 5b Worksheet, on page 28. Line 6 -- Enter the amount deducted on your federal return for New York State taxes imposed under Article 9 (sections 183, 183-a, 184, 184-a), 9-A, and 32. This includes the MTA surcharge. However, do not include New York City taxes. Include the amount deducted for taxes paid or accrued to the United States, its possessions, other U.S. states, their political subdivisions, any foreign country, and the District of Columbia, if the tax or taxes are on or are measured by profits or income, or include profits or income as a measure of tax, including taxes expressly in lieu of the foregoing. Line 7 -- Use this line if: · The corporation claims the federal ACRS/MACRS deduction for property placed in service either in or outside New York State after 1980 in tax periods beginning before 1985; or · The corporation claims the federal ACRS/MACRS deduction for property placed in service outside New York State in tax periods beginning after 1984 and before tax periods beginning in 1994, and the corporation made the election to continue using the IRC section 167 depreciation deduction for the property; or · The corporation claims a 30%/50% federal special depreciation deduction under IRC section 168(k) for qualified property (excluding qualified resurgence zone property described in Tax Law section 208.9(q) or qualified New York liberty zone property described in IRC section 1400L(b)(2)) placed in service on or after June 1, 2003, in tax years beginning after December 31, 2002; or
Page 14 of 30
·
CT-3/4-I (2008)
Line instructions for Form CT-3
and any other income and gain from subsidiary capital that was included as part of FTI. You must include as subsidiary dividends subpart F income received from a controlled foreign corporation in which you own more than 50% of the voting stock (see federal Form 1120, Schedule C). Do not include foreign dividend gross-up under IRC section 78. A DISC does not qualify as a subsidiary. Line 11 -- Enter 50% of the dividends received from nonsubsidiary stock that meets the holding requirements of IRC section 246(c). Include 50% of subpart F income received from a controlled foreign corporation in which you own 50% or less of the voting stock (see federal Form 1120, Schedule C). Include 50% of the dividends received from a money market mutual fund included as investment capital (cash) on Form CT-3-ATT, line 6. Do not include the grossed-up dividends, under IRC section 78. For more information, see TSB-M-89(14)C, 50% Dividend Deduction to Conform with Federal Holding Periods. If you are a REIT or a RIC, you do not qualify for the 50% deduction for dividends received from nonsubsidiary stock (see NYCRR regulation sections 3-11.1(b) and 3-12.1(b)). Line 12 -- Enter foreign dividend gross-up pursuant to IRC section 78 (see federal Form 1120, Schedule C). ENI does not include any amount treated as dividends pursuant to IRC section 78 (section 208.9(a)(6)). Line 13 -- Enter any New York State NOL carried forward from prior years. Attach a separate sheet with full details of both federal and New York State NOLs claimed. If the NOL is carried back for federal purposes, you must determine the New York State NOL carryforward deduction as if you had elected under IRC section 172 to relinquish the carryback provisions, except for the first $10,000 which you may carry back to the preceding years (section 208.9(f)). These rules apply: A. IRC section 172 federal losses must be adjusted in accordance with Article 9-A, section 208.9(a), (b), and (g). B. · For NOLs incurred in tax years beginning after August 5, 1997, the NOL may be carried back two years (with an exception for certain disaster losses) and carried forward 20 years. · For NOLs incurred in tax years beginning on or before August 5, 1997, the NOL may be carried back three years and carried forward 15 years. · For certain NOLs incurred in tax years ending in 2001 and 2002, the NOL may be carried back five years, unless the taxpayer elects for federal tax purposes to disregard the five-year carryback. If you are claiming a five-year carryback, please attach a schedule of the computation. · For certain NOLs attributable to Hurricane Katrina, the qualified Gulf Opportunity Zone (GO Zone) loss portion of the NOL may be carried back five years. C. If you have elected to carry back an NOL for federal tax, you may carry back only the first $10,000 of an NOL to the preceding years; use an amended return or Form CT-9. D. Any portion of the $10,000 NOL not used as a carryback may be carried forward. E. If you have elected for federal tax purposes to relinquish the carryback of an NOL, you may not carry back an NOL for state tax purposes, and you must submit a copy of your federal election. F. No deduction is allowed for an NOL sustained during any year in which the corporation was not subject to tax under Article 9-A. G. The New York State net operating loss deduction (NOLD) for any particular year is limited to the federal NOLD for that year. For the purposes of this limitation, a corporation that has elected to carry back up to $10,000 of its NOL for New York State purposes should compute its federal NOLD as if it only carried back the same $10,000 (see items C, D, and E). H. A New York C corporation is not allowed a deduction for an NOL sustained during a New York S year. A New York S year is treated as a tax year for purposes of determining the number of tax years to which the NOL may be carried back or forward (Tax Law section 208.9(f)(4)). I. A REIT is allowed a deduction for NOLs. J. These rules also apply to a federal S corporation not electing New York S corporation treatment, and to corporations included in a group reporting on a consolidated basis for federal tax but on a separate basis for purposes of Article 9-A. These corporations should compute their NOLs and NOLDs as if filing on a separate basis for federal income tax purposes. However, instead of a copy of the federal election to relinquish
The corporation disposes this year of either ACRS/MACRS property, or property for which you claimed a 30%/50% federal special depreciation, and the New York depreciation modifications applied to the property in any prior years.
If line 7 applies, enter the amount from Form CT-399, line 3, column E, the amount of your federal deduction that must be added back to FTI, or if you disposed of property this year, use the amount from Form CT-399, line 10, column A. Enter your allowable New York depreciation amount on line 14. For more information, see Form CT-399-I. Line 8 IRC section 199 deduction -- Enter in the first entry box the amount of the deduction for domestic production activities from your federal return that is required to be added back under Tax Law section 208.9(b)(19). If you have any of the following other additions to FTI, add the amount from the first entry box to the total amount of those additions and enter the result. Attach a separate sheet listing the other additions. Note: The foreign trade income of a foreign sales corporation, which is excluded from gross income for FTI purposes, is not required to be added back in determining New York State ENI. A-1 Optional depreciation -- If you have claimed optional depreciation in prior years on certain property acquired from January 1, 1964, through December 31, 1968, you must include on this line any depreciation and any federal losses on the disposition of that property that you deducted from gross income when determining FTI. Make the adjustment for New York gain or loss on qualified New York State property on line 23. See additional instructions for line 15, S-1, on page 15. Attach Form CT-324, Schedule of Optional Depreciation on Qualified New York Property. A-2 Worldwide net income and losses -- A corporation organized outside the United States must include on this line all income from sources outside the United States, minus all allowable deductions attributable to it, that was not included in FTI. A-3 If you are claiming a special additional mortgage recording tax credit (section 210.17), you must include on this line the amount claimed as a credit and used as a deduction in the computation of FTI. The gain on the sale of real property on which the special additional mortgage recording tax credit was claimed must be increased when all or any part of the credit was also used in the basis for computing the federal gain. A-4 If your corporation has a safe harbor lease you must include: -- Any amount you claimed as a deduction in computing FTI solely as a result of an election made under IRC section 168(f)(8) as it was in effect on December 31, 1983. -- Any amount you would have been required to include in the computation of your FTI if you had not made the election permitted under IRC section 168(f)(8) as it was in effect on December 31, 1983. A-5 If you are claiming a farmers' school tax credit, you must include on this line the amount of real property taxes paid on qualified agricultural property and deducted in determining FTI, to the extent of the amount of the credit allowed under section 210.22. A-6 Qualified emerging technology investment (QETI) -- If you elected to defer the gain from the sale of QETI, then you must add to FTI the amount previously deferred when the reinvestment in the New York QETC that qualified you for that deferral is sold (see subtraction S-6 on page 15). A-7 Qualified public utility corporations must make the required addbacks pursuant to Tax Law section 208.9(c-2). Qualified power producers and qualified pipeline corporations must make the required addbacks pursuant to Tax Law section 208.9(c-3). For more information, see the instructions for Schedule D on page 26. A-8 Amount of related member royalty payment required to be added back pursuant to Tax Law section 208.9(o). A-9 Amount of Sport Utility Vehicle (SUV) depreciation required to be added back pursuant to Tax Law section 208.9(b)(16). A-10 If you are claiming an environmental remediation insurance credit, you must include on this line the amount of premiums paid for environmental remediation insurance and deducted in determining FTI, to the extent of the amount of the credit allowed under Tax Law sections 23 and 210.35.
Lines 10 through 16 -- Subtractions
Use lines 10 through 16 to subtract items that are included in FTI but should not be included in New York State ENI. Line 10 -- If you have a subsidiary, complete Schedule C of Form CT-3-ATT and enter the amount from line 26. This amount must include capital gains
Line instructions for Form CT-3
the carryback of a NOL, a request in writing to relinquish the carryback must be filed on or before the due date (or extended due date) of the return for the loss year. Any corporation that does not make an election with the Tax Department by the due date must carry the first $10,000 of the NOL back before the loss can be carried forward. Note: Patronage-sourced NOLs cannot be used to reduce nonpatronage-sourced taxable income. Special NOL provisions apply to aviation corporations that filed under Article 9 for the years 1985 through 1988 (see Aviation corporations -- NOL provisions for tax years 1985 through 1988 below).
CT-3/4-I (2008) Page 15 of 30
S-5 If your corporation has a safe harbor lease, include the following items: -- Any amount included in your FTI solely as a result of an election made under IRC section 168(f)(8) as it was in effect on December 31, 1983. -- Any amount you could have excluded from FTI if you had not made the election provided for in IRC section 168(f)(8) as it was in effect on December 31, 1983. Leases for qualified mass-commuting vehicles as defined in IRC section 103(b)(9) are exempt from these adjustments. S-6 You may defer the gain on the sale of QETI that are (1) held for more than 36 months and (2) rolled over into the purchase of a QETI within 365 days. A replacement QETI must be purchased within the 365-day period beginning on the date of sale. Gain is not deferred and must be recognized to the extent that the amount realized on the sale of the original QETI exceeds the cost of a replacement QETI. The gain deferral applies to any QETI sold on or after March 12, 1998, that meets the holding-period criteria. You must add back the gain deferred in the year the replacement QETI is sold. If you elect the gain deferral, deduct from FTI the amount of the gain deferral (to the extent the gain is included in FTI). If purchase of the replacement QETI within the 365-day period occurs in the same tax year as the sale of the original QETI, or in the following tax year and before the date the corporation's franchise tax return is filed, take the deduction on that return. If purchase of the replacement QETI within the 365-day period occurs in the following tax year and on or after the date the corporation's franchise tax return is filed, you must file an amended return to claim the deduction. For more information, see TSB-M-98(7)C, 1998 Summary of Corporation Tax Legislative Changes, pages 5 and 6. S-7 Victims or targets of Nazi persecution -- Include the amount received (including accumulated interest) from an eligible settlement fund, or from an eligible grantor trust established for the benefit of these victims or targets, if included in your FTI. Do not include amounts received from assets acquired with such assets or with the proceeds from the sale (Tax Law, Article 1, section 13). S-8 Qualified public utilities corporations and transferees must make deductions pursuant to Tax Law section 208.9(c-2). Qualified power producers and qualified pipeline corporations must make deductions pursuant to Tax Law section 208.9(c-3). For more information, see the instructions for Schedule D of Form CT-3-ATT on page 26. S-9 Amount of related member royalty payment required to be subtracted pursuant to Tax Law section 208.9(o). S-10 Amount of SUV recapture required to be subtracted pursuant to Tax Law section 208.9(a)(16). S-11 REIT deduction -- Enter the total dividends paid deduction from federal Form 1120-REIT, line 21b and the IRC section 857(b)(2)(E) deduction from Form 1120-REIT, line 21c. S-12 RIC dividend deduction -- Enter the total dividends paid deduction from federal Form 1120-RIC, line 25.
Aviation corporations -- NOL provisions for tax years 1985 through 1988
Corporations principally engaged in aviation are taxable under Article 9-A and may claim a NOLD in the same manner as other Article 9-A corporations. Air freight forwarders acting as principal and like indirect carriers are limited to NOLs sustained in years that they were taxable under Article 9-A. Aviation corporations (other than air freight forwarders acting as principal and like indirect air carriers) may carry forward any NOLs sustained during the federal tax periods covering the years 1985 through 1988, if they were taxed under Article 9, sections 183 and 184, during those periods. The New York State NOL must be computed as if the corporation had filed Form CT-3 for the tax years 1985 through 1988 and treated as if the loss had been sustained in the tax year immediately preceding its first Article 9-A tax year. The 1985 through 1988 NOL must be carried forward. Line 14 -- Use this line if: · The corporation claims the federal ACRS/MACRS deduction for property placed in service either in or outside New York State after 1980 in tax periods beginning before 1985; or · The corporation claims the federal ACRS/MACRS deduction for property placed in service outside New York State in tax periods beginning after 1984 and before tax periods beginning in 1994, and the corporation made the election to continue using the IRC section 167 depreciation deduction for the property; or · The corporation claims a 30%/50% federal special depreciation deduction under IRC section 168(k) for qualified property (excluding qualified resurgence zone property described in Tax Law section 208.9(q) or qualified New York liberty zone property described in IRC section 1400L(b)(2)) placed in service on or after June 1, 2003, in tax years beginning after December 31, 2002; or · The corporation disposes this year of either ACRS/MACRS property, or property for which you claimed a 30%/50% federal special depreciation, and the New York depreciation modifications applied to the property in any prior years. If line 14 applies, enter the amount from Form CT-399, line 3, column I, or, if you have disposed of property this year, use the amount from Form CT-399, line 10, column B, and attach the form. For more information, see Form CT-399-I. Line 15 -- If you have any of the following other subtractions from FTI, enter the total amount of those subtractions and attach a list. S-1 Optional depreciation -- If you claimed optional depreciation in prior years on certain property acquired from January 1, 1964, through December 31, 1968, include on this line any federal gain on the disposition of qualified property that was included in FTI. Make the adjustment for New York State gain or loss on qualified New York State property on line 23. See additional instructions for line 8, A-1, on page 14. Attach Form CT-324. S-2 Receipts from the operation of school buses -- Include all receipts from the transportation of pupils, teachers, and others acting in a supervisory capacity to and from school or school activities, minus any deductions allowed in computing FTI that are directly or indirectly attributable to those receipts. S-3 Include any refund or credit of a tax imposed under Tax Law Article 9-A or 32, for which no exclusion or deduction was allowed in determining the taxpayer's ENI for any prior year, or any refund or credit of a tax imposed under Article 9, sections 183, 183-a, 184, or 184-a. Do not include on this line any refund or credit of tax that was used to offset an addition of tax on line 6. Do not include any refund or credit of New York City taxes. S-4 Include the amount of wages disallowed under IRC section 280C in the computation of your FTI because you claimed a federal credit. Attach a copy of the appropriate federal credit form.
Lines 18 through 24 -- ENI base
The ENI base is the portion of your ENI allocated to New York State with certain adjustments. It may consist of both business and investment income. Use Schedule A, Part 1, 2, or 3, as applicable, to compute your business allocation percentage (BAP). Use Form CT-3-ATT, Schedule B, Parts 1 and 2, to compute your investment income and investment allocation percentage. Line 18 -- Complete Form CT-3-ATT, Schedule B, Part 2, and enter the amount of your investment income from line 22. Do not enter more than the amount on line 17. If you had no investment income, enter 0 and do not use Schedule B of Form CT-3-ATT. Line 21 -- Multiply line 19 by your BAP from Schedule A, line 119, 121, or 141. If you claim a business allocation of 100%, enter the full amount from line 19. Line 23 -- You may claim a deduction for optional depreciation on this line. Include any gain or loss on the disposition of property on which optional depreciation was claimed. Attach Form CT-324. Line 24 -- If line 23 is a gain, add lines 22 and 23. If line 23 is a loss, subtract line 23 from line 22. This is your ENI base.
Page 16 of 30
CT-3/4-I (2008)
Line instructions for Form CT-3
not permit a quarterly or more frequent computation of the average value of assets, you may use a semiannual or annual computation if no distortion of average value results. Short periods -- If a tax return is for a period of less than 12 months, determine the amount of business capital by multiplying the average value by the number of months covered by the return and dividing by 12 (see 20 NYCRR section 3-3.7). Line 29 -- Enter the fair market value of real property and marketable securities included on line 27. The fair market value of an asset is the price (without deduction of an encumbrance whether or not the taxpayer is personally liable) at which a willing seller will sell and a willing purchaser will buy. You can generally find the fair market value of marketable securities from price quotes in financial newspapers. For determination of fair market value of real property, see TSB-M-85(18.1)C, Valuation of Real Property. Line 31 -- Enter the amount of all liabilities attributable to assets on line 26, both long and short term. Use the same method of averaging used to determine average value of assets. Line 40 -- Capital base tax computation -- Multiply line 39 by the tax rate of .0015. Cooperative housing corporations multiply line 39 by .0004. Enter the result on line 73, but do not enter more than $350,000 if you are a qualified New York manufacturer and do not enter more than $10,000,000 for all other taxpayers. Complete line 164 if you are claiming qualified New York manufacturer status for purposes of a lower capital base tax limitation. If you have been taxable in New York State for less than two years, read the instructions on page 17 for line 73 to see if you qualify as a new small business corporation. Note: All cooperative housing corporations must file Form TP-588, Cooperative Housing Corporation Information Return, twice a year. For more information, see the instructions on Form TP-588. Line 41 -- Your issuer's allocation percentage represents the amount of your capital employed within New York State compared to the total amount of capital employed everywhere. Every taxpayer using Form CT-3 should compute an issuer's allocation percentage. If you do not supply the information needed to compute your issuer's allocation percentage you may have to pay a $500 penalty. To determine the percentage, add line 39 (capital base) and Form CT-3-ATT, Schedule C, line 29 (subsidiary capital base), then divide by the amount on line 32 (total capital). If you have no subsidiaries, divide the line 39 amount by the line 32 amount (see Percentages on page 7).
Line 25 -- ENI base tax computation
General business taxpayers
If you do not qualify as a small business taxpayer (as defined below) or a qualified New York manufacturer (see page 22, line 165), multiply line 24 by 7.1% (.071). Enter the result on line 25 and line 72, then continue with line 26.
Small business taxpayer definition
A corporation qualifies as a small business taxpayer if: -- its ENI (before allocation) is not more than $390,000; -- the total amount of money and other property it received for stock, as a contribution to capital and as paid-in surplus, is not more than $1,000,000 as of the last day of its tax year; and -- the corporation is not part of an affiliated group, as defined in IRC section 1504, unless the group itself would have met the above criteria if it had filed a combined return. Short periods: A corporation that files Form CT-3 for a tax year of less than 12 months must annualize ENI from Form CT-3, line 17, to determine if it qualifies as a small business taxpayer. For a period of less than 12 months, annualize the ENI (line 17) by dividing it by the number of months in the short period and multiplying the result by 12.
Small business taxpayers
Complete lines 162 and 163 if you use the small business taxpayer tax rate. If your ENI base is $290,000 or less, multiply line 24 by 6.5% (.065) and enter the result on line 25 and line 72, then continue with line 26. If your ENI base is more than $290,000 but not over $390,000, your effective rate will be between 6.5% and 7.1%. Your tax is: 1. $18,850 ($290,000 times 6.5%), plus 2. 7.1% (.071) of any amount over $290,000, plus 3. 4.35% (.0435) of any amount over $350,000. Use Worksheet A below to compute your tax:
Worksheet A
ENI base from line 24 Subtract .................... Multiply balance ........ Subtract .................... Multiply balance ........ 60,000 by .0435 = ........ C. 290,000 by .071 = .......... B. .......................... A. $18,850
Computation of minimum taxable income (MTI) base
Lines 42 through 71
The calculation of MTI requires the addition to ENI of federal tax preference items, the addition or subtraction of certain federal adjustments used to compute federal alternative MTI, the addition of the New York State NOLD, and the subtraction of the ANOLD. MTI is allocated by the use of an alternative BAP and the regular investment allocation percentage. See Article 9-A, sections 208.8-B, 210.1(c), and 210.3-a, and TSB-M-90(13)C, Computation of Minimum Taxable Income Base and Minimum Tax Credit. The Tax Law also provides for a minimum tax credit, available for use against tax computed on the ENI base. The credit is designed to prevent double-counting of income that might otherwise arise because of timing items of tax preference and adjustments. See Article 9-A, section 210.13, and Form CT-38. You must determine an MTI base and tax, whether or not you file federal Form 4626. Enter 0 on any line that does not apply to you. Show any negative amounts with a minus (-) sign. Line 43 -- If you are required to complete Form CT-399, Part 4, enter the amount from Form CT-399, line 15 or 16. If you are not required to complete Form CT-399, Part 4, enter the amount from federal Form 4626, line 2a. If you were not required to file federal Form 4626, compute the amount that would have been reported on line 2a of that form. Attach a copy of Form CT-399 or federal Form 4626 to your return.
Add boxes A, B, and C; enter the result here and on lines 25 and 72 ........................................................ D. A small business taxpayer's tax on the ENI base will never exceed $27,690 for the tax period. If you are a qualified New York manufacturer (see page 22, line 165), multiply line 24 by 6.5% (.065). Enter the result on lines 25 and 72, and continue with line 26. Mark an X in the applicable box on line 165 to avoid an erroneous assessment or delayed refund.
Computation of capital base
Lines 26 through 40
To determine the value of your assets for the capital base computations, you must include real property and marketable securities at fair market value. You must include all other property at the value shown on your books in accordance with generally accepted accounting principles (GAAP). Use lines 28 and 29 to adjust the value of the assets you reported on your federal return. If you are not required to complete the balance sheet on your federal tax return, use the amount that would have been reported on the federal return. On lines 26 through 31, enter the values at the beginning of the year in column A and at the end of the year in column B. Enter the average value in column C. Average value is generally computed quarterly if your usual accounting practice permits it. However, you may use a more frequent basis such as monthly, weekly, or daily. If your usual accounting practice does
Line instructions for Form CT-3
Line 44 -- Enter the federal item of adjustment for mining exploration and development costs as determined in IRC section 56(a)(2) (from federal Form 4626). Line 45 -- Enter the federal item of adjustment for circulation expenditures of personal holding companies as determined under IRC section 56(b)(2) (from federal Form 4626). Line 46 -- Enter the federal item of adjustment for adjusted gain or loss as determined under IRC section 56(a)(7) (from federal Form 4626), except do not include any basis adjustment made in determining the gain or loss from the sale or exchange of pollution control facilities. Line 47 -- Enter the federal item of adjustment for the treatment of certain long-term contracts as determined under IRC section 56(a)(3) (from federal Form 4626). Line 48 -- Enter the federal item of adjustment for installment sales of certain property as determined under IRC section 56(a)(6) (from federal Form 4626). Line 49 -- Enter the federal item of adjustment for merchant marine capital construction funds as determined under IRC section 56(c)(2) (from federal Form 4626). Line 50 -- Enter the federal item of adjustment for disallowance of passive activity loss as determined under IRC section 58(b) (from federal Form 4626). Line 52 -- Enter the federal item of preference for depletion as determined under IRC section 57(a)(1) (from federal Form 4626). Line 53 -- Enter the federal item of preference for the carryover of appreciated property charitable deduction determined under IRC section 57(a)(6). Line 54 -- Enter the federal item of preference for intangible drilling costs as determined under IRC section 57(a)(2) (from federal Form 4626). Line 56 -- Enter the NOL deducted in the computation of the ENI base. This is the amount on Form CT-3, line 13. Include only the maximum amount permitted on Form CT-3, line 13; see instructions for line 13 on page 14. Line 58 -- Enter your ANOLD. Attach a separate sheet with full details of the New York State alternative net operating losses (ANOLs) claimed. The ANOLD is determined in the manner described for line 13, for computing the regular NOLD, except that the NOL for any year beginning after 1989 that is included in the ANOLD must be redetermined with the adjustments and tax preferences required to be used in computing the MTI for that year. (Note: The required addback of regular NOLD is not an adjustment or tax preference.) An item of tax preference is taken into account only to the extent it increased the regular NOL. In determining the ANOLs carrying into the ANOLD of any given year, the following rules apply: A. Exclude losses from years when the taxpayer was not subject to Article 9-A. B. Pre-1990 NOLs available for carryforward to 1990 under the regular tax are available for carryforward to 1990 under the minimum tax, and without the application of minimum tax adjustments. C. ANOLs must be carried to the appropriate carry years, whether or not the tax on MTI is the largest tax for the particular carry year. D. ANOLs must be carried using the conventions of IRC section 172(b)(2). The carryback should be exhausted in the earliest available carry year, except as provided in E and F. · For NOLs incurred in tax years beginning after August 5, 1997, the ANOL may be carried back two years (with the exception of certain disaster losses) and carried forward 20 years. · For NOLs incurred in tax years beginning on or before August 5, 1997, the ANOL may be carried back three years and carried forward 15 years. · For certain NOLs incurred in tax years ending in 2001 and 2002, the ANOL may be carried back five years, unless the taxpayer elects for federal tax purposes to disregard the five-year carryback. If you are claiming a five-year carryback, please attach a schedule of the computation. · For certain NOLs attributable to Hurricane Katrina, the qualified GO Zone loss portion of the ANOL may be carried back five years. E. The carryback of each ANOL is limited to $10,000, as is the case with the regular tax NOLD. F. The federal election to forgo carryback of an NOL applies to the related New York ANOL.
CT-3/4-I (2008) Page 17 of 30
G. ANOLs must be applied against 90% of MTI (determined without regard to the ANOLD) each year, even though some lower limitation on the ANOLD actually applies for that year. Limitations on the ANOLD are described in H through J below. H. In applying the carryout rules under D, ANOLs must be carried out to tax years beginning in 1990 through 1993, even though no ANOLD was allowed in those years. I. For tax years beginning in 1994 only, the ANOLD is limited to 45% of MTI, computed without regard to the ANOLD, and thereafter to 90% of MTI, computed without regard to the ANOLD. J. The ANOLD for any particular year is limited to the federal regular tax NOLD for that year. For more information, see TSB-M-94(5)C, Computation of Minimum Taxable Income and Minimum Tax Credit. Line 61 -- Add those items of adjustment and tax preference derived from investment capital that are not included in ENI but are included in MTI (for example, appreciated property charitable deduction for contributed stock treated as an item of tax preference). Line 63 -- Apportion any ANOLD claimed on line 58 between business income and investment income. Divide alternative investment income before deduction of any ANOL (line 62) by MTI before deduction of any ANOLD (line 57). Multiply the result by the ANOLD from line 58 and enter the amount on this line. Line 64 -- Alternative investment income is the sum of investment income and that portion of MTI that consists of income from investment capital that was not included in ENI. Line 71 -- If your largest tax is based on the MTI base, you may be allowed a minimum tax credit in a future year. Complete Form CT-38, Schedules A, B, and D to compute your minimum tax credit generated this year and carried forward to future years. Attach a copy to Form CT-3 and keep a copy for your records. Use this to determine your minimum tax credit to be used against your tax on ENI in the future.
Computation of tax
Line 73 -- Enter the tax computed on your capital base from line 40. The tax on the capital base does not apply to a REIT, as defined in IRC section 856 that is subject to tax under IRC section 857, or a RIC, as defined in IRC section 851 that is subject to tax under IRC section 852 and they must enter 0 on line 73. A REIT or RIC filing federal Form 1120-REIT or 1120-RIC must also mark an X in the applicable box on line B on page 1 of the return to avoid an erroneous assessment or delayed refund. A new small business corporation may claim an exemption from the tax on the capital base for its first two tax years if it meets the requirements below. If you are claiming this exemption, enter 0 on line 73 and mark the box indicating the year for which the exemption is taken. You will continue to be liable for the largest tax computed on lines 71, 72, or 74b, in addition to the tax on line 77. Attach a separate sheet covering all points listed below. If you do not supply the information, we will disallow the exemption. Do not confuse this definition with the definition of a small business taxpayer on line 25. To qualify, the corporation must meet the federal definition of a small business corporation (IRC section 1244(c)(3), disregarding the second sentence of subparagraph (A)). The requirements are: -- The total amount of money and other property the corporation received for stock, as a contribution to capital, and as paid-in surplus, may not be more than $1,000,000 on the last day of its tax year. -- It cannot be similar in ownership and operation to a business now taxable or previously taxable under New York State Tax Law, Article 9 (section 183, 184, 185, or 186), 9-A, 22, 32, or 33 (or a business entity which had income or losses includable under Article 22 or which would have been taxable under Article 23 had that article not been repealed). -- 90% of the corporation's assets and 80% of its employees must be located in New York State. -- It cannot have as a shareholder a corporation that owns over 50% of its voting stock, and that is taxable under Article 9 (section 183, 184, 185, or 186), 9-A, 32, or 33, unless the corporation itself qualifies as a small business corporation. Line 74a -- New York receipts -- Enter your New York receipts. If you do not have New York receipts, enter 0.
Page 18 of 30
CT-3/4-I (2008)
Line instructions for Form CT-3
If you are a foreign authorized corporation that filed a return for a 12-month period, and the total of your New York State corporation taxes and MTA surcharge is less than $300, you must increase your payment so that the total corporation taxes and MTA surcharge equal $300. Do not enter $300 on line 82; enter only the amount of tax calculated. Include this amount (difference between $300 and the tax calculated on line 82) on line A on page 1 of Form CT-3. If you are a foreign authorized corporation and filed a short period return, refer to Short periods -- fixed dollar minimum tax and maintenance fee on page 6, in order to determine the minimum maintenance fee requirement. Line 83b -- If the tax on line 82 exceeds $1,000 and you did not file Form CT-5, a mandatory first installment is required for the period following the one that is covered by this return. If the tax on line 82 exceeds $1,000, but is not greater than $100,000, multiply the amount on line 82 by 25%. If the tax on line 82 exceeds $100,000, multiply the amount on line 82 by 30%. Line 87 -- Form CT-222, Underpayment of Estimated Tax by a Corporation, is filed by a corporation to inform the Tax Department that the corporation meets one of the exceptions to the underpayment of estimated tax penalty pursuant to Tax Law section 1085(d). Lines 88 and 89 -- If you are not filing this return on time, you must pay interest and additional charges. See Penalties and interest on page 5.
To avoid an erroneous assessment or a delay in your refund, you must enter an amount on this line. Include business receipts from the sales of tangible personal property, services performed, rentals, royalties, receipts from the sales of rights for closed circuit and cable television transmissions, and all other business receipts received in the regular course of business within New York State. These items can be found on federal Form 1120, Income section. Under New York State Regulation section 4-4.6(e), receipts from the sales of capital assets are not business receipts and are not included in New York receipts. For a short period, annualize New York receipts by dividing by the number of months in the short period and multiplying the result by 12. Line 74b -- Fixed dollar minimum tax -- The fixed dollar minimum tax is determined by the corporation's New York receipts. Homeowners associations with no FTI are not subject to the fixed dollar minimum tax and must enter 0. A homeowners association filing federal Form 1120-H must also mark an X in the applicable box on line B on page 1 of the return to avoid an erroneous assessment or delayed refund. See Table 7 of the Tax rates schedule on page 6 to determine the applicable fixed dollar minimum tax. If you are filing a short period return, see Short periods -- fixed dollar minimum tax and maintenance fee on page 6 to determine the applicable fixed dollar minimum tax. Line 75 -- Enter the amount from line 71, 72, 73, or 74b, whichever is largest. Small business taxpayer exception: If line 73 (tax on capital base) is larger than line 72 (tax on ENI base) only because of the reduced rate applicable to small business taxpayers, enter the largest amount from line 71, 72, or 74b. If you qualify as both a small business taxpayer and a qualified New York manufacturer, you must use the small business taxpayer rate for purposes of ENI base in order to be exempt from the tax on the capital base under the small business taxpayer exception. Mark an X in the Yes box on line 162 to indicate that you are claiming small business taxpayer status (do not mark an X in the Yes box on line 165). Taxable DISCs must enter the larger of line 73 or 74b. Line 79 -- Complete line 100a and enter the total amount of the tax credit that you are claiming. If you are claiming more than one tax credit, see Form CT-600-I, Instructions for Form CT-600, for the order of application under Article 9-A. Generally, tax credits cannot reduce your tax below the larger of the fixed dollar minimum tax or the tax on the MTI base. However, the credit to employers who employ individuals with disabilities (section 210.23), the empire zone employment incentive credit (EZ-EIC) (section 210.12-C), the qualified empire zone enterprise (QEZE) tax reduction credit of a taxpayer with a zone allocation factor not equal to 100% (section 210.28), the Empire State film production credit (section 210.36), and the Empire State commercial production credit (section 210.38) are only limited by the amount of the fixed dollar minimum tax. Also, the credit for servicing mortgages (section 210.21a), the QEZE tax reduction credit of a taxpayer with a 100% zone allocation factor (section 210.28), the credit for taxicabs and livery service vehicles accessible to persons with disabilities (section 210.40), and the credit for the rehabilitation of historic properties (section 210.40) may reduce the tax to zero. Indicate which credits you are claiming on line 100a on page 5 of Form CT-3 and attach copies of all forms and schedules used. Line 82 -- The franchise tax is the larger of line 80 or 81. However, if the total on line 80 is less than the total on line 81 because of the application of the credit for servicing mortgages (available only to mortgage bankers), the QEZE tax reduction credit of a taxpayer with a 100% zone allocation factor, the credit for taxicabs and livery service vehicles accessible to persons with disabilities, or the credit for rehabilitation of historic properties, enter the amount from line 80. If the total on line 80 is less than the total on line 81 because of the application of the credit for employers who employ persons with disabilities, the QEZE tax reduction credit of a taxpayer with a zone allocation factor not equal to 100%, the EZ-EIC, the Empire State film production credit, or the Empire State commercial production credit, enter the larger of line 80 or 74b.
Lines 91a through 91d
If you want to make a contribution to Return a Gift to Wildlife, Breast Cancer Research and Education Fund, Prostate Cancer Research Detection and Education Fund, National September 11 Memorial & Museum at the World Trade Center, or all four, enter the whole dollar amount(s) on the appropriate line(s). Your gift will increase your payment or reduce your overpayment. You cannot change the amount of your gift after you file your return. Line 91a -- Return a Gift to Wildlife -- Your contribution will benefit New York's fish, wildlife, and marine resources, and you can receive a free issue of Conservationist magazine. Call 1 800 678-6399 for your free sample issue. For more information about New York State's environmental conservation programs, go to www.dec.ny.gov. For information about Conservationist, go to www.TheConservationist.org. Line 91b -- Breast Cancer Research and Education Fund -- Your contributions to the Breast Cancer Research and Education Fund have supported ground-breaking research projects in New York State. More dollars will support more studies that bring us closer to the cures and prevention of breast cancer. Help make breast cancer a disease of the past. Your contribution will be used to fund important biomedical research studies and education projects. New York State will match your contribution to the Breast Cancer Research and Education Fund, dollar for dollar. Line 91c -- Prostate Cancer Research, Detection, and Education Fund -- Your contribution will benefit the New York State Coalition to Cure Prostate Cancer. The coalition coordinates and manages prostate cancer research, detection, and education efforts in our state. New York State will match your contribution to the Prostate Cancer Research, Detection, and Education Fund, dollar for dollar. Line 91d -- National September 11 Memorial & Museum at the World Trade Center (National 9/11 Memorial) -- Your contribution to the National September 11 Memorial & Museum will help create the Memorial & Museum which will commemorate and honor the thousands of people who died in the attacks of September 11, 2001, and February 26, 1993. The Memorial will recognize the endurance of those who survived, the courage of those who risked their lives to save others, and the compassion of all who supported us in our darkest hours. Help New York State, the nation, and the world remember by making a contribution. For more information, go to www.national911memorial.org. Line 94 -- Unrequested refunds to be credited forward -- If the corporation overpays its tax, it will not automatically receive a refund. Instead, we will credit your overpayment to the following tax year unless you request a refund on line 98. We will notify you that the overpayment has been credited and explain how to request a refund of the credited amount. If you choose to request a refund of such credited amount, you must claim a refund of such overpayment prior to the original due date of the following year's return. Lines 95 through 98 -- You may apply an overpayment to your next state franchise tax period, or to your MTA surcharge for this period, or you may have it refunded. Indicate on these lines the amount of overpayment you wish credited or refunded.
Line instructions for Form CT-3 Collection of debts from your refund or overpayment
We will keep all or part of your refund or overpayment if you owe a past-due, legally enforceable debt to a New York State agency, or if you owe a New York City tax warrant judgment debt. We may also keep all or part of your refund or overpayment if you owe a past-due legally enforceable debt to another state, provided that state has entered into a reciprocal agreement with New York State. If we keep your refund or overpayment, we will notify you. A New York State agency includes any state department, board, bureau, division, commission, committee, public authority, public benefit corporation, council, office, or other entity performing a governmental or proprietary function for the state or a social services district. We will refund or apply as an overpayment any amount over your debt. If you have any questions about whether you owe a past-due, legally enforceable debt to a state agency, or to another state, or whether you owe a New York City tax warrant judgment debt, contact the state agency, the other state, or the New York City Department of Finance. For New York State tax liabilities only, call 1 800 835-3554 (from areas outside the U.S. and outside Canada, call (518) 485-6800) or write to: NYS Tax Department, Collections and Civil Enforcement Division, W A Harriman Campus, Albany NY 12227. Lines 99a through 99b -- If you request a refund of unused tax credits, enter the total amount on line 99a. If you request tax credits to be credited as an overpayment to next year's return, enter the total amount on line 99b. Attach the appropriate tax credit forms. Do not include these amounts in the total credits claimed on lines 79, 100a, or 100b. For a listing of refund-eligible credits, see Form CT-600-I.
CT-3/4-I (2008) Page 19 of 30
If you have both business and investment income or capital, you must complete Schedule A and Form CT-3-ATT, Schedule B, Parts 1 and 2. Aviation corporations -- Taxpayers principally engaged in the conduct of aviation (except air freight forwarders acting as principal and like indirect air carriers and qualified foreign air carriers), complete Part 1 to compute a BAP and an alternative BAP. Use this percentage to allocate business income, when determining both the ENI base and the MTI base, and to allocate business capital when computing the capital base. Railroad and trucking corporations -- Taxpayers principally engaged in the conduct of a railroad or trucking business, complete Part 2 to compute a BAP and an alternative BAP. Use this percentage to allocate business income when determining both the ENI base and the MTI base, and to allocate business capital when computing the capital base. Air freight forwarders acting as principal and like indirect air carriers -- Taxpayers principally engaged as air freight forwarders acting as principal and like indirect air carriers, complete Part 3 to compute a BAP and Part 4 to compute an alternative BAP. Use the BAP to allocate business income when computing the ENI base, and to allocate business capital when computing the capital base. Use the alternative BAP to determine the MTI base. Qualified foreign air carriers -- Taxpayers that are qualified foreign air carriers (see Foreign airlines on page 7), complete Part 3 to compute a BAP and Part 4 to compute an alternative BAP. Use the BAP to allocate business income when computing the ENI base, and to allocate business capital when computing the capital base. Use the alternative BAP computed in Part 4 to determine the MTI base. Foreign airlines should consult TSB-M-94(2)C, before completing these schedules. All Article 9-A taxpayers (except taxpayers principally engaged in the conduct of a railroad or trucking business, taxpayers principally engaged in the conduct of aviation, air freight forwarders acting as principals or like indirect air carriers, or qualified foreign air carriers) -- Complete Part 3, lines 129 through 136, to compute the BAP. The New York State receipts factor on line 136 is your BAP. Enter the amount from line 136 on line 141. Also complete Part 4, lines 149 through 156, to compute the alternative BAP. The New York State receipts factor on line 156 is your alternative BAP. Enter the amount from line 156 on line 161. Use the BAP to allocate business income when computing the ENI base, and to allocate business capital when computing the capital base. Use the alternative BAP to determine the MTI base.
Summary of credits claimed on line 79 against current year's franchise tax
Mark an X in the box on Form CT-3 directly above line 100a if you are claiming the QEZE tax reduction credit and you have a 100% zone allocation factor. Line 100a -- Enter the amount of any tax credits that you are claiming on line 79 against your current year's franchise tax. For other credits not specified, enter the amount of credits being claimed in the Other credits box and include this amount in the total. Do not include any amount of tax credit requested as a refund on line 99a or requested as a tax credit to be credited as an overpayment to next year's return on line 99b. If you are required to recapture a tax credit that was allowed in a previous reporting period, and the result is a negative credit amount on your credit claim form, enter this negative amount, using a minus sign, in the applicable box. Line 100b -- Enter the amount of credits that are refund-eligible claimed on line 79 against your current year's franchise tax. Do not include any amount of credits actually requested as a refund on line 99a or requested as an overpayment credited to next year's tax on line 99b. Please refer to the individual credit forms and Form CT-600-I for refund eligibility. Lines 101 through 106 -- Composition of prepayments on line 85 -- If you need more space, write see attached in this section, and attach a separate sheet showing all relevant prepayment information. Transfer the total shown on the attached sheet to line 85. Line 104 -- Include overpayment credited from prior years. You may also include from last year's return any amount of refundable tax credits you chose to be credited as an overpayment. Lines 108 and 109 -- Interest paid to shareholders -- Corporations that made interest payments, deducted in computing ENI, to a shareholder or shareholders owning, directly or indirectly, individually or in the aggregate, more than 50% of its issued capital stock, must provide the information requested in this section (section 211.2-a). A penalty of $500 is imposed for failing to provide this information (section 1085(n)).
Schedule A, Part 1 -- Computation of business
allocation percentage for aviation corporations
Taxpayers principally engaged in the conduct of aviation (except air freight forwarders acting as principal or like indirect air carriers, and qualified foreign air carriers) compute the BAP by averaging aircraft arrivals and departures, revenue tons handled, and operating revenue. Enter the New York State amounts in column A and the total amounts in column B. Line 112a -- Enter the number of aircraft arrivals and departures of the aviation corporation. Aircraft arrivals and departures means the number of landings and takeoffs of the aircraft of an aviation corporation, plus the number of pickups and deliveries by the aircraft. Do not include arrivals and departures for maintenance, repair, refueling (where no debarkation or embarkation of traffic occurs), training, emergencies, and nonrevenue flights. Line 114a -- Enter the weight, in tons, of revenue passengers (at 200 pounds per passenger) and revenue cargo first received as originating or connecting traffic or finally discharged at an airport. Line 116a -- Enter revenue from the transportation of revenue passengers and revenue property first received as originating or connecting traffic.
Schedule A, Part 2 -- Computation of business Schedule A
Computation of business allocation percentage and alternative business allocation percentage for MTI base
If you claim a BAP of 100%, you do not need to complete Schedule A. If you claim a BAP of less than 100%, you must complete Schedule A to allocate your business income and capital.
allocation percentage for trucking and railroad corporations
Railroad and trucking corporations must allocate on a mileage basis using this schedule. The mileage allocation is a percentage based on revenue miles traveled within New York State, compared to total revenue miles traveled everywhere (exclude nonrevenue miles, such as deadheading miles). Enter the New York State amounts in column A and the total amounts in column B.
Page 20 of 30
CT-3/4-I (2008)
Line instructions for Form CT-3
Examples of types of evidence that will be sufficient to demonstrate the destination of property include: A bill of lading or other shipping document designating the destination location, regardless of the free on board (FOB) point. A purchase invoice designating the destination location.
Schedule A, Part 3 -- Computation of business
allocation percentage
The New York State receipts factor computed on line 136 is your BAP. However, air freight forwarders acting as principal or like indirect air carriers, and qualified foreign air carriers only (see Foreign airlines on page 7) use a 50% weighted receipts factor, a 25% weighted property factor, and a 25% weighted payroll factor. Mark an X in the box if you are an air freight forwarder acting as principal and like indirect air carriers, or if you are a qualified foreign air carrier. The property factor is the percentage of the average value of your real and tangible personal property, whether owned or rented, that is located within New York State. The business receipts factor is the percentage of your business receipts attributable to New York State. The payroll factor is the percentage of your payroll that is attributable to New York State. You must value real and tangible personal property owned by the corporation at the adjusted basis used for federal income tax. However, you may make a one-time, revocable election to value real and tangible personal property at fair market value. You must make this election on or before the due date (or extended due date) for filing the franchise tax return for your first tax year. Lines 122 through 141 -- Enter the New York State amounts in column A and the total amounts in column B. Lines 122 through 128 -- Only air freight forwarders acting as principal or like indirect air carriers, and qualified foreign air carriers complete lines 122 through 128. Line 122 -- Enter the average value of real property you owned. Do not include real property and related equipment (except inventoriable goods) that are under construction and are not occupied or used during construction. Include property or equipment under construction that is partially used in the regular course of business only to the extent used. Line 123 -- Enter the average value of rented real property. The value of rented real property is generally eight times the gross rent payable during the year covered by this return. Gross rent includes any amount payable as rent or in lieu of rent (such as taxes or repairs), and amortization of leasehold improvements that revert to the lessor at the end of the lease. Line 125 -- Enter the average value of tangible personal property you owned, such as machinery, tools, and implements. Do not include cash, shares of stock, bonds, notes, credits, evidences of an interest in property, or evidences of credit. Line 126 -- Enter the average value of tangible personal property you rented. The value of rented tangible personal property is generally eight times the gross rent payable during the year covered by this return. Lines 129 and 130 -- Enter receipts from the sale of tangible personal property. Receipts from the sale of tangible personal property are allocable to New York State if: shipments are made to points in New York State; or the receipts are earned within New York State. Receipts from the sale of tangible personal property are allocated to New York State if: The property is shipped via common carrier, contract carrier, or via the taxpayer's vehicle or other means of transportation, to a point in New York State. If the property is shipped to a point in New York State, it is presumed that the destination of the property is a point in New York State, unless the taxpayer has evidence that shows the property was shipped to a point outside New York State. It does not matter who arranges for the shipment of the property. The possession of the property is transferred to a purchaser or purchaser's designee at a point in New York State. If possession of the property is transferred in New York State, it is presumed that the destination of the property is a point in New York State, unless the taxpayer has evidence that shows that the destination of the property is a point outside New York State. The possession of the property is transferred to a purchaser or purchaser's designee at a point outside New York State, but the destination of the property is a point in New York State. If possession of the property is transferred outside New York State, it is presumed that the destination of the property is a point outside New York State, unless the taxpayer has evidence that shows the destination of the property is a point in New York State.
Arts and Cultural Affairs Law
The Arts and Cultural Affairs Law provides that receipts from the sale of works of art by an art merchant are receipts from the sale of tangible personal property (rather than receipts for services performed). The law applies to works of art that are: -- created by an artist or craftsman; -- consigned by such artist or craftsman to an art merchant; and -- sold by the art merchant on or after August 9, 1995. The law does not apply to consigned works of art sold at a public auction. Line 131 -- Enter receipts for services performed, based on where they are performed. Receipts from broadcasting and publishing -- Corporations engaged in broadcasting or the publication of newspapers and periodicals must allocate to New York State receipts from the sale of advertising, to the extent that the broadcasts or publications are delivered to the ultimate purchasers, subscribers, listeners, or viewers in New York State. Receipts for services to regulated investment companies -- Receipts received from an investment company for the sale of management, administration, or distribution services must be allocated based on the domicile of the shareholders of the investment company (section 210.3(a)(6)). For more information, see TSB-M-88(9)C, Allocation of Receipts from Services Provided to a Regulated Investment Company (Mutual Fund) and Similar Investment Companies. Receipts earned by registered securities or commodities broker or dealer -- The rules below apply for determining whether a receipt is deemed to arise from services performed in New York State by a registered securities or commodities broker or dealer, for purposes of computing the receipts factor of the BAP (section 210.3(a)(9)). A registered securities or commodities broker or dealer is a broker or dealer who is registered by the Securities and Exchange Commission (SEC) or the Commodities Futures Trading Commission and includes over-the-counter (OTC) derivatives dealers as defined under regulations of the SEC (17 CFR 240.3b-12). The terms securities and commodities have the same meanings as the meanings in IRC sections 475(c)(2) and 475(e) (2). · Brokerage commissions -- Brokerage commissions earned from the execution of securities or commodities purchase or sales orders for the accounts of customers are deemed to arise from a service performed in New York State if the customer who is responsible for paying the commissions is located in New York State. Margin interest -- Margin interest earned on brokerage accounts is deemed to arise from a service performed in New York State if the customer who is responsible for paying the margin interest is located in New York State. Account maintenance fees -- Account maintenance fees are deemed to arise from a service performed in New York State if the customer who is responsible for paying the account maintenance fees is located in New York State. Income from principal transactions -- Gross income from principal transactions (that is, transactions in which the registered broker or dealer is acting as principal for its own account, rather than as an agent for the customer) are deemed to arise from a service performed in New York State if the production credits for these transactions are awarded to a New York State branch, office, or employee of the taxpayer. Registered broker dealers may elect to source the gross income from principal transactions based on the location of the customer to the principal transaction. If the election is made, gross income from principal transactions is deemed to arise from a service performed in New York State to the extent that the gross proceeds from the transactions are generated from sales of securities or commodities to customers within the state based upon the mailing addresses of those customers in the records of the taxpayer. For additional information, see TSB-M-02(5)C, Summary of Corporation Tax Legislative Changes Enacted in 2002. Fees from advisory services for the underwriting of securities -- Fees earned from advisory services for a customer in connection
·
·
·
·
Line instructions for Form CT-3
with the underwriting of securities (where the customer is the entity contemplating the issuance of the securities or is issuing securities) or for the management of an underwriting of securities are deemed to arise from a service performed in New York State if the customer responsible for paying the fee is located in New York State. Receipts from the primary spread for the underwriting of securities -- Receipts from the primary spread or selling concession from underwritten securities are deemed to arise from a service performed in New York State if production credits are awarded to a branch, office, or employee of the taxpayer in New York State as a result of the sale of underwritten securities. Interest earned on loans to affiliates -- Interest earned on loans and advances made by a taxpayer to an affiliate with whom they are not required or permitted to file a combined return are deemed to arise from a service performed in New York State if the principal place of business of the affiliate who is responsible for the payment of interest is located in New York State. Fees for management or advisory services -- Fees earned from management or advisory services, including fees from advisory services for activities relating to mergers or acquisition activities, are deemed to arise from a service performed in New York State if the customer responsible for paying these fees is located in New York State.
CT-3/4-I (2008) Page 21 of 30
General executive officers include the chairman, president, vice-president, secretary, assistant secretary, treasurer, assistant treasurer, comptroller, and any other officer charged with the general executive affairs of the corporation. An executive officer whose duties are restricted to territory either in or outside New York State is not a general executive officer. Employees within New York State include all employees regularly connected with or working out of an office or other place of business you maintained within New York State, no matter where the services of the employees were performed. Line 141 -- If you are not an air freight forwarder acting as principal or like indirect air carrier, or a qualified foreign air carrier, enter the New York State receipts factor as computed on line 136. The New York State receipts factor is your BAP. Air freight forwarders acting as principal or like indirect air carriers, and qualified foreign air carriers only (see Foreign airlines on page 7) divide line 140 by four. If the property, receipts, or payroll factor is missing, add the remaining factors and divide by the total number of factors present. If all factors but one are missing, the remaining factor is the allocation percentage. A factor is not missing merely because its numerator is zero, but a factor is missing if both the numerator (column A) and the denominator (column B) are zero.
·
·
·
A customer is located in New York State if the mailing address of the customer, as it appears in the broker's or dealer's records, is in New York State. For more information, see TSB-M-00(5)C, Summary of Corporation Tax Legislative Changes Taking Effect in 2001 and After, pages 6 through 8.
Schedule A, Part 4 -- Computation of alternative business allocation percentage for MTI base
The New York State receipts factor computed on line 156 is your alternative BAP. However, air freight forwarders acting as principal or like indirect air carriers, and qualified foreign air carriers only (see Foreign airlines on page 7), use a 50% weighted receipts factor, a 25% weighted property factor, and a 25% weighted payroll factor. Determine the factors using the same rules that apply to Part 3, except that any factor used to determine the alternative BAP must be adjusted to reflect modifications made in the computation of MTI (lines 42 through 59), which may change an amount used in a particular factor. For example, a depreciation modification on line 43 would change the amounts used in computing the property factor. Use the alternative BAP to determine the MTI base. If you entered zeros on lines 43 through 50 and 52 through 54, you may use the same percentages determined in Schedule A, Part 3. If you made entries on lines 43 through 54 that altered an item used to compute the property or receipts factors in Schedule A, Part 3, you must make appropriate changes when determining the alternative BAP for allocating the alternative business income on line 66 and Form CT-38, line 6. Lines 142 through 148 -- Only air freight forwarders acting as principal or like indirect air carriers, and qualified foreign air carriers complete lines 142 through 148. Lines 149 and 151 -- For more information on allocation of receipts and services, see the instructions for lines 129 through 131 on page 20 and section 4-4.2 of the Business Corporation Franchise Tax Regulations. Line 156 -- If you are not an air freight forwarder acting as principal or like indirect air carrier, or a qualified foreign air carrier, the result on line 156 is your alternative BAP and must be entered on line 161. Do not complete lines 157 through 160. Lines 157 through 160 -- Only air freight forwarders acting as principal or like indirect air carriers, and qualified foreign air carriers complete lines 157 through 160. Line 157 -- Air freight forwarders acting as principal or like indirect air carriers, and qualified foreign air carriers only (see Foreign airlines on page 7) include an additional receipts factor in the computation of the alternative BAP. Enter the New York State receipts factor computed on line 156. Line 161 -- If you are not an air freight forwarder acting as principal or like indirect air carrier, or a qualified foreign air carrier, enter the New York State receipts factor as computed on line 156. The New York State receipts factor is your alternative BAP. Air freight forwarders acting as principal or like indirect air carriers, and qualified foreign air carriers only (see Foreign airlines on page 7) divide line 160 by four. If the property, receipts, or payroll factor is missing, add the remaining factors and divide by the total number of factors present.
Air freight forwarders
Receipts for services performed by air freight forwarders acting as principal and like indirect air carriers are allocated to New York State as follows: Receipts from: Allocate receipts Pickup and delivery both made in New York State ................ 100% to NYS Pickup only made in New York State ..................................... 50% to NYS Delivery only made in New York State ................................... 50% to NYS
Transporting or transmitting gas through pipes
Allocate receipts from the service of transporting or transmitting gas through pipes to New York State using the following formula:
Miles of transportation units within New York State x Miles of transportation units within and outside New York State Receipts from the Receipts from the service of transporting = service of transporting or transmitting gas or transmitting gas through pipes through pipes allocated to New York State
A transportation unit is the transportation of one cubic foot of gas over a distance of one mile. Line 132 Enter receipts from all property that was rented to others. Receipts from rentals of real and tangible personal property situated in New York State are allocated to New York State. Rental receipts include all amounts received for the use of or occupation of property, whether or not such property is owned by the taxpayer. Gross receipts from real and tangible personal property that is subleased must be included in the receipts factor. Line 133 -- Enter receipts of royalties. Receipts of royalties from the use in New York State of patents and copyrights are allocated to New York State. Royalties include all amounts received by the taxpayer for the use of patents or copyrights, whether or not such patents or copyrights were issued to or are owned by the taxpayer. A patent or copyright is used in New York State to the extent that the activities thereunder occur in New York State. Line 134 -- Enter all other business receipts, allocated where earned. Line 136 -- If you are not an air freight forwarder acting as principal or like indirect air carrier, or a qualified foreign air carrier, the result on line 136 is your BAP and must be entered on line 141. Do not complete lines 137 through 140. Lines 137 through 140 -- Only air freight forwarders acting as principal or like indirect air carriers, and qualified foreign air carriers complete lines 137 through 140. Line 137 -- Air freight forwarders acting as principal or like indirect air carriers, and qualified foreign air carriers only (see Foreign airlines on page 7) include an additional receipts factor in the computation of the BAP. Enter the New York State receipts factor computed on line 136. Line 138 -- Enter the total amount of all wages and compensation of employees other than general executive officers.
Page 22 of 30
CT-3/4-I (2008)
Line instructions for Form CT-3 and Line instructions for Form CT-3-ATT
cash on page 23), or on a stock or bond index or on a futures contract on such an index, unless the options are purchased primarily to diminish the taxpayer's risk of loss from holding one or more positions in assets that constitute business or subsidiary capital. 5. Stock rights and stock warrants not in the possession of the issuer. 6. Investments in stocks, bonds, and other securities of a LLC that is not more than 50% owned by the taxpayer and has elected to be treated as a corporation for federal tax purposes. The term instrument includes stock and debt that is held in book entry form. Investment capital does not include: · Stock issued by the taxpayer. · Stocks, bonds, or other securities constituting subsidiary capital. Debt instruments issued by a subsidiary are also not subsidiary capital (and are not investment capital) if the subsidiary claimed and deducted interest on the instruments for purposes of Tax Law Article 9-A, 32, or 33. · Securities of an individual, partnership, trust, or other nongovernmental entity that is not a corporation pursuant to Tax Law section 208.1 (such as Federal National Mortgage Association (FNMA) and Government National Mortgage Association (GNMA) pass-through certificates). · Stocks, bonds, and other securities of a DISC, or any indebtedness from a DISC. · Regular and residual interests in a real estate mortgage investment conduit (REMIC) as defined in IRC section 860D. · Futures and forward contracts. · Stocks, bonds, and other securities held by the taxpayer for sale to customers in the regular course of business. Do not include stocks, bonds, and other securities issued by, and any indebtedness from, a QSSS in the computation of investment capital, if the QSSS is included in the parent's return. Schedule B, Part 1 categorizes investment capital into two sections: · Section 1: Corporate and governmental debt instruments · Section 2: Corporate stock, stock rights, stock warrants, and stock options
If all factors but one are missing, the remaining factor is the allocation percentage. A factor is not missing merely because its numerator is zero, but a factor is missing if both the numerator (column A) and the denominator (column B) are zero. Lines 162 and 163 -- Small business taxpayer -- If you used the small business tax rate on line 25, you must mark an X in the Yes box on line 162 and complete line 163 to show that your corporation qualifies for the lower tax rate (see instructions for line 25). If you qualify, provide the information requested in this section. Use your federal balance sheet amounts for stock and other paid-in capital. Use the worksheet below to determine the amount to enter on line 163. No. of shares Par value stock ...................................... No-par value stock ................................ Contributions to capital and paid-in surplus ....................... Total capital contributions; enter on line 163 ...................... Line 164 -- If you are claiming qualified New York manufacturer status (see below) for purposes of a lower capital base limitation, you must mark an X in the Yes box. Qualified New York manufacturer is a manufacturer (as described below) that has property in New York State that is principally used by the taxpayer in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture, or commercial fishing, and either: · the adjusted basis of the property for federal income tax purposes is at least $1 million at the close of the tax year; or · all of its real and personal property is located in New York State. A corporation qualifies as a manufacturer if during the tax year the taxpayer is principally engaged in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture, or commercial fishing. A taxpayer is principally engaged in manufacturing activities if during the tax year more than 50% of its gross receipts are derived from receipts for the sale of goods produced by these activities. A qualified New York manufacturer also includes a taxpayer that is a QETC as defined under Public Authorities Law section 3102-e(1)(c), except that the $10 million limitation under section 3102-e(1)(c)(1) does not apply. Line 165 -- If you are claiming qualified New York manufacturer status (see above) for purposes of a lower ENI tax rate, you must mark an X in the Yes box. For purposes of the lower ENI rate, the generation and distribution of electricity, the distribution of natural gas, and the production of steam associated with the generation of electricity are not considered manufacturing activities for purposes of the principally engaged test. Amount
Schedule B, Part 1, Section 1 -- Corporate and
governmental debt instruments
Column A -- List investments in governmental and qualifying corporate debt instruments (including certificates of deposit), and debt instruments issued by the U.S., any state, territory, or possession of the U.S., the District of Columbia, or any foreign country or any political subdivision or government instrumentality of any of the foregoing. Do not include instruments deemed to be cash. See Instruments deemed cash on page 23. The term qualifying corporate debt instrument means all debt instruments issued by a corporation other than the following: -- Instruments issued by the taxpayer or a DISC. -- Instruments that constitute subsidiary capital in the hands of the taxpayer. -- Instruments acquired by the taxpayer for services rendered or for the sale, rental, or other transfer of property if the obligor is the recipient of the services or property. However, if a taxpayer sells or otherwise transfers property that is investment capital in the hands of the taxpayer, and receives in return a corporate obligation issued by the recipient of the property, the corporate obligation, if it is not otherwise excluded from investment capital, would constitute investment capital in the hands of the taxpayer. -- Instruments acquired for funds if (1) the obligor is the recipient of the funds, (2) the taxpayer is principally engaged in the business of lending funds, and (3) the obligation is acquired in the regular course of the taxpayer's business of lending funds. A taxpayer is principally engaged in the business of lending funds if during the tax year more than 50% of its gross receipts consist of interest income from loans, or net gain from the sale or redemption of notes, or other evidences of indebtedness arising from loans made by the taxpayer. Receipts may not include return of principal or nonrecurring, extraordinary items. -- Accepted drafts (such as banker's acceptances and trade acceptances) if the taxpayer is the drawer of the draft. -- Instruments issued by a corporation that is a member of an affiliated group that includes the taxpayer. The term affiliated group means a corporation or corporations and the common parent thereof. The term common parent means an individual, corporation, partnership, trust, or
Line instructions for Form CT-3-ATT Schedules B, C, and D
Schedule B, Part 1 -- Computation of investment
capital and investment allocation percentage
The term investment capital means the value of the taxpayer's investments in stocks, bonds, and other corporate or governmental securities, reduced by directly and indirectly attributable liabilities. Include in investment capital only those stocks, bonds, or other securities that are: 1. Stocks and similar corporate equity instruments, such as business trust certificates, and units in a publicly traded partnership taxable as a corporation pursuant to Tax Law section 208.1. 2. Debt instruments (such as bonds) issued by the United States, the District of Columbia, and any state, territory, or possession of the United States, any foreign country, or any political subdivision or governmental instrumentality of the foregoing. 3. Qualifying corporate debt instruments (see Section 1 below). 4. Options on any item described in 1, 2, or 3 above and not excluded from investment capital nor deemed to be cash (see Instruments deemed
Line instructions for Form CT-3-ATT
estate that owns or controls, either directly or indirectly, at least 80% of the voting stock of the corporation or corporations. An affiliated group also includes all other corporations at least 80% of the voting stock of which is owned or controlled, either directly or indirectly, by one or more of the corporations included in the affiliated group, or by the common parent and one or more of the corporations included in the affiliated group. -- Accounts receivable, including those held by a factor.
CT-3/4-I (2008) Page 23 of 30
The average value is generally computed quarterly if your usual accounting practice permits it, but you may use a monthly, weekly, or daily average. If your usual accounting practice does not permit a quarterly or more frequent computation of average fair market value, you may use a semiannual or annual computation if no distortion of average fair market value results. If the security is not marketable, value it using GAAP. (See example 3 above.) Column D -- Deduct all liabilities, both long-term and short-term, directly or indirectly attributable to investment capital. Use the same method of averaging used to determine the average value of assets in column C. Enter for each item of investment capital listed in column A the sum of the liabilities directly or indirectly attributable to it. Liabilities directly attributable to an asset are those that were incurred to acquire that asset. (See example 3 above.) Use the worksheet below to determine the amount of liabilities indirectly attributable to a particular asset. In column D, on the line for the asset in question, include the sum of the amount from line O of this worksheet and the amount of liabilities directly attributable to that asset.
Instruments deemed cash
A debt instrument described on page 22 or included in investment capital must be treated as cash if payable: · on demand; · by its terms within six months and one day from the date the debt was incurred; or · by its terms more than six months and one day from the date the debt was incurred, on each day in the tax year on and after the first day in the tax year that is not more than six months and one day prior to the maturity date (see Examples below). Cash, under certain circumstances, may be treated as investment capital; see the instructions for line 6 on page 24. Examples 1. A calendar-year taxpayer owns a municipal bond with a maturity date of January 31, 2009. As of July 30, 2008, the first day not more than six months and one day before the maturity date, and on each day thereafter, the bond is deemed to be cash. Include the bond in Part 1, but in computing the average value of the bond and attributable liabilities, treat the taxpayer as no longer owning the bond on any date on or after July 30, 2008. The value of the bond should then be treated as cash for each day the taxpayer continues to own the bond after July 29, 2008. 2. A taxpayer purchased a four-month qualifying corporate debt instrument on the day it was issued, and on the maturity date renewed it for an additional four-month term. The two four-month debt instruments are deemed to be cash. Treat the renewal of the first four-month debt instrument as the creation of a second, separate debt instrument, each of the two instruments being due within six months and one day of the date on which the debt was incurred. 3. A calendar-year taxpayer at all times during the tax year owns a five-year qualifying, marketable corporate bond with a maturity date of January 2, 2009. The taxpayer also owns corporate stock, but has no cash at any point during the 2008 tax year. The bond is deemed to be cash as of July 1, 2008, the date six months and one day prior to maturity. The fair market value of the bond is $95,000 on March 31, 2008, $90,000 on June 30, 2008, $98,000 on September 30, 2008, and $100,000 on December 31, 2008. List the bond in Section 1, column A, because it qualifies as investment capital. Compute its average value, stated in column C of Section 1, as ($95,000 + $90,000 + 0 + 0) ÷ 4 = $46,250. The use of the zeros represents the fact that the taxpayer is deemed to own cash, and not a bond, on September 30 and December 31. Compute the average value of the bond insofar as it is deemed to be cash as (0 + 0 + $98,000 + $100,000) ÷ 4 = $49,500. The use of the zeros represents the fact that the taxpayer owned no cash on March 31 or June 30. The figures $98,000 and $100,000 represent the fact that the taxpayer is deemed to own cash in those amounts on September 30 and December 31, respectively. The taxpayer had liabilities attributable to the bond. Treat the amount of the liabilities in conformity with the above treatment of the value of the bond itself. Thus, the liabilities, which were $10,000, $12,000, $8,000, and $6,000 on the four test dates, yield an average liability of $5,500 attributable to the listed bond ($10,000 + $12,000 + 0 + 0) ÷ 4 = $5,500, to be entered in column D of Section 1, and an average liability of $3,500 (0 + 0 + $8,000 + $6,000 ÷ 4 = $3,500) to be applied to determine the net average value of the taxpayer's cash. If the taxpayer elects to treat the deemed cash as investment capital, it would include $49,500 on line 6, column C and $3,500 on line 6, column D. If the election to treat the deemed cash as investment capital is not made, the $49,500, reduced by $3,500, would constitute business capital. 4. A taxpayer purchased a debt instrument, includable in Section 1, with a maturity date of December 15, 2008. Any such investment is deemed cash on the same numerical date as the maturity date, less one day, six months prior. Thus the date on which this debt instrument becomes cash is June 14, 2008. Column C -- Enter the total average fair market value of each item listed in column A. On any date, the fair market value of stocks, bonds, and other regularly traded securities is the mean between the highest and lowest selling prices.
Worksheet
Liabilities indirectly attributable to a particular asset
A. Total liabilities (enter amount from Form CT-3, line 31, column C) .................................................. Liabilities directly attributable to: B. Subsidiary capital.................................................. C. Investment capital ................................................. D. Business capital .................................................... E. Total liabilities directly attributable (add lines B, C, and D)................................................... F. Total liabilities indirectly attributable (subtract line E from line A) .................................................. G. Average value of investment capital (enter amount from Form CT-3-ATT, line 7, column C) ................. H. Average value of adjusted total assets (enter amount from Form CT-3, line 30, column C) ............... I. Divide line G by line H........................................... J. Multiply line F by line I........................................... K. Value of the particular asset ................................. L. Enter amount from line G ...................................... M. Divide line K by line L............................................ N. Enter amount from line J ....................................... O. Liabilities indirectly attributable to a particular asset (multiply line M by line N)............................. A. B. C. D. E. F. G. H. I. J. K. L. M. N.
%
%
O.
Column E -- Determine the net average value of each item listed in column A by subtracting column D from column C. The net average value of any item cannot be less than zero. Column F -- Enter the issuer's allocation percentage for each investment listed in column A. The issuer's allocation percentage used to compute investment capital allocated to New York State is the percentage determined on the New York State tax return filed by the issuing corporation for the preceding year. The issuer's allocation percentage on government bonds listed in Part 1 is 0%. Issuer's allocation percentages are available on the Tax Department's Web site and from many online and printed tax services. You may also obtain up to three issuer's allocation percentages by calling toll free (see Need help? on page 30). Column G -- Determine the value of each investment in column A by multiplying each item in column E by the issuer's allocation percentage listed in column F.
Schedule B, Part 1, Section 2 Corporate stock, stock rights, stock warrants, and stock options
Column A -- List investments in the following: -- stock issued by a corporation; -- options as described in item 4 of the definition of investment capital listed on page 22; -- units in a publicly traded partnership treated as a corporation for purposes of Tax Law Article 9-A; -- business trust certificates;
Page 24 of 30
CT-3/4-I (2008)
Line instructions for Form CT-3-ATT
-- stock rights and stock warrants not in the possession of the issuer; and -- other corporate equity instruments similar to stock. Columns C through G -- See instructions for Schedule B, Part 1, Section 1, columns C through G beginning on page 23. Line 6 -- Cash election -- At the election of the taxpayer, cash on hand and cash on deposit may be treated as either investment capital or business capital. However, no election to treat cash as investment capital may be made when the taxpayer has no other investment capital. Cash includes shares in a money market mutual fund. A money market mutual fund is a no-load, open-end investment company registered under the Federal Investment Company Act of 1940 that attempts to maintain a constant net asset value per share (that is, a money market fund). Cash also includes debt instruments deemed cash; see Instruments deemed cash on page 23. Cash cannot be split between business capital and investment capital. You must treat cash as all business capital or all investment capital.
Lines 15 through 18
Refer to TSB-M-95(2)C, Attribution of Noninterest Deductions, for information about lines 15 through 18. Complete lines 15 and 16 if you have investment capital includable on Form CT-3-ATT, line 7, column C (otherwise, enter 0 on lines 15 and 16). Line 15 -- Enter the amount of interest deductions allowable in the computation of ENI (that is, includable in the amount on Line 17 worksheet, line E, on page 25) that are directly attributable to investment capital (or to income, losses, or gains from investment capital). Line 16 -- Enter the amount of noninterest deductions allowed in the computation of ENI (that is, includable in the amount on Line 18 worksheet, line E, on page 29) that are directly attributable to investment capital (or to income, losses, or gains from investment capital). The direct attribution of deductions is based on an analysis of the facts and circumstances. Deductions directly attributable to investment capital or income include but are not limited to the following: -- interest on debt incurred to buy investment capital -- safe deposit box rentals -- financial news subscriptions -- salaries of employees engaged in the management and conservation of stocks, bonds, and other securities included in investment capital -- investment counsel fees -- custodian fees -- the cost of insurance and fidelity bonds covering investment capital -- expenses for legal advice relating to the acquisition of investment capital Do not include on lines 15 or 16 interest deductions or noninterest deductions that are directly attributable to: -- Subsidiary capital (or income, losses, or gains from subsidiary capital); see Form CT-3, lines 4a and 4b. -- Business capital (or income, losses, or gains from business capital). Note: For tax years beginning in 1995 or after, certain expenses may, at the taxpayer's election, be deemed to be directly attributable to business capital (or income, losses, or gains from business capital). These expenses include, among others: depletion; advertising; research and development expenses; compensation packages of chief executive officer, chief financial officer, and chief operating officer; charitable contributions; and internal auditing expenses. For a complete listing of deductions so deemed attributable to business capital, see section III of TSB-M-95(2)C. If at least 95% of the noninterest deductions of an operating division or corporation are directly attributable to a particular class of capital or income, 100% of the noninterest deductions of that division or corporation may be directly attributed to that class of capital or income. For details, see TSB-M-95(2)C, section IV.
Schedule B, Part 2 -- Computation of investment
income before allocation
Complete this schedule if you are allocating part of your ENI by using an investment allocation percentage from Schedule B, Part 1. Investment income is income from investment capital to the extent it is included in ENI, minus any deductions allowable in computing ENI that are attributable to investment capital or investment income, and minus a portion of any NOLD allowable in computing ENI. Income from investment capital includes dividends (other than from a subsidiary or a DISC), interest, and capital gains and losses from sales or exchanges of investment capital that are included in the computation of ENI. Professional services corporations (Article 15 or 15-A Business Corporation Law (BCL) must use an investment allocation percentage of 100% (section 210.3(b)(3)). Do not include stocks, bonds, and other securities issued by, and any indebtedness from, a QSSS in the computation of investment capital, if the QSSS is included in the parent's return. Line 8 -- Enter interest income received from investment capital listed in Schedule B, Part 1, Section 1, column A, to the extent included in ENI. Line 9 -- Enter interest income received from bank accounts (cash) if included on line 6. Include interest income received from a savings account, checking account, time deposit account (other than certificate of deposit), or similar accounts, which are usually evidenced by a passbook. Enter 0 on this line if the investment allocation percentage on line 5 is zero. In that case, allocate this interest by the BAP and include as part of business income. Line 10 -- Enter interest income from debt instruments deemed cash, including certificates of deposit, if included on line 6. Line 11 -- Enter dividend income received from investment capital listed in Schedule B, Part 1, Section 2, column A, or dividend income received from money market mutual funds included as cash on line 6, to the extent included in ENI. Include the following: -- 50% of dividends received from money market mutual funds included as cash on line 6. (Fifty percent of these dividends were deducted on Form CT-3, line 11). -- 50% of dividends received from nonsubsidiary stock which meets the holding requirements of IRC section 246(c). (Fifty percent of these dividends were deducted on Form CT-3, line 11). -- 50% of subpart F income constituting dividends received from a controlled foreign corporation in which you own 50% or less of the voting stock (see federal Form 1120, Schedule C). For more information, see TSB-A-87(23.1)C, American International Group, Inc. -- 100% of dividends received from nonsubsidiary stock that did not meet the holding requirements of IRC section 246(c). Line 12 -- Enter any net capital gains or losses from the sale and exchange of securities constituting investment capital that were used in computing FTI. Line 13 -- Other items of investment income include but are not limited to, premium income from an unexercised covered call option, if the item that covers the call is an asset constituting investment capital.
Lines 17 and 18
Complete lines 17 and 18 if you have investment capital includable on line 7, column C. Otherwise, enter 0 on lines 17 and 18. Use the worksheets on page 25 and on page 29 before completing these lines. Line 17 -- Enter the amount of interest deductions that are indirectly attributable to investment capital, or to income, gains, or losses from investment capital, from Line 17 worksheet, line N, on page 25. If you completed the Line 5a worksheet on page 13, skip lines A through I on the Line 17 worksheet, and enter on line J the amount from the Line 5a worksheet, line J.
Line instructions for Form CT-3-ATT Line 17 worksheet Interest deductions indirectly attributable to investment capital
A. Enter federal interest deduction shown on federal Form 1120 ................................................... A. B. Enter amounts of interest deductions included on line A that must be added back to FTI in computing ENI (other than the amounts on Form CT-3, lines 4a and 5a); for example, interest deductions taken in computing an amount included on Form CT-3, line 15. Enter the Form CT-3 line numbers and amounts below:
Line # Line # Line # Amount Amount Amount Total B.
CT-3/4-I (2008) Page 25 of 30
Schedule C
Complete this schedule if you have any subsidiaries. A subsidiary is a corporation (except a DISC) of which the taxpayer owns more than 50% of the total number of shares of the corporation's voting stock, issued and outstanding. The test of ownership is actual beneficial ownership, rather than mere record title as shown by the stock books of the issuing corporation. Actual beneficial ownership of stock does not mean indirect ownership or control of a corporation through a structure consisting of several tiers and/or chains of corporations and/or partnerships. Do not include stocks, bonds, and other securities issued by, and any indebtedness from, a QSSS in the computation of subsidiary capital, if the QSSS is included in the parent's return.
Schedule C, Part 1 -- Income attributable to
subsidiary capital
Lines 23 through 25 -- Enter interest, dividends, and capital gains attributable to subsidiary capital. In addition, include on line 25 items such as collapsible corporation gain and sale of subsidiary capital that is not a capital asset for federal tax.
C. Balance (subtract line B from line A) ............................ C. D. Enter amounts of interest deductions that must be subtracted from FTI in computing ENI: for example, the interest deductions taken in computing the amount on Form CT-3, line 2, or amounts related to foreign source income not shown on federal Form 1120. Enter the Form CT-3 line number and amounts below:
Line # Line # Line # Amount Amount Amount Total D.
Schedule C, Part 2 -- Computation and
allocation of subsidiary capital base and tax
Subsidiary capital is the taxpayer's total investment in shares of capital stock of its subsidiaries, and the amount of indebtedness owed to the taxpayer by its subsidiaries (whether or not evidenced by written instruments) on which interest is not claimed and deducted by the subsidiary against any tax imposed by Article 9-A, 32 or 33, minus liabilities directly or indirectly attributable to subsidiary capital. When computing the amount of indebtedness owed to the taxpayer by its subsidiaries, consider each subsidiary separately. You may offset loans and advances from the parent to the subsidiary by loans and advances from the same subsidiary to the parent, but they may not be reduced to less than zero. Loans and advances from a subsidiary to the parent may not offset the parent's investment in the stock of the subsidiary or offset loans and advances from the parent to any other subsidiary. Subsidiary capital does not include accounts receivable acquired in the ordinary course of trade or business either for services rendered or for the sale of property primarily held for sales to customers. You must reduce each item of subsidiary capital by any of the parent's liabilities that are directly or indirectly attributable to that item of subsidiary capital. Do not include stocks, bonds, and other securities issued by, and any indebtedness from, a QSSS in the computation of subsidiary capital if the QSSS is included in the parent's return. Column C -- Enter the average value of each item of subsidiary capital. Average value is generally computed quarterly if your usual accounting practice permits it. However, you may use a more frequent basis such as a monthly, weekly, or daily average. If your usual accounting practice does not permit a quarterly or more frequent computation of average value, you may use a semiannual or annual computation if no distortion of average value results. Value marketable securities at fair market value, and value other items of subsidiary capital using GAAP. Column D -- Deduct all liabilities, both long-term and short-term, directly or indirectly attributable to subsidiary capital. Use the same method of averaging used to determine the average value of assets in column C. Enter for each item of subsidiary capital listed in column A the liabilities directly or indirectly attributable to it. Liabilities directly attributable to an asset (stock or debt) are those that were incurred to acquire that asset. Use the Schedule C worksheet on page 26 to determine the amount of liabilities indirectly attributable to a particular asset. In column D, on the line for the asset in question, include the sum of the amount from line O of the Schedule C worksheet and the amount of liabilities directly attributable to that asset.
E. Total New York State interest deductions included in ENI (add lines C and D) .......................................... E. F. Enter any interest deductions directly attributable to subsidiary capital included on Form CT-3, line 4a...................................................................... F. G. Enter any interest deductions directly attributable to investment capital included on Form CT-3-ATT, line 15 ..................................................................... G. H. Enter any interest deductions directly attributable to business capital .................................................. H. I. Subtotal (add lines F, G, and H) .................................. I. J. Interest deductions subject to indirect attribution (subtract line I from line E) ........................................... J. K. Enter the amount from Form CT-3-ATT, line 7, column C ................................................................. K. L. Enter the amount from Form CT-3, line 30, column C ................................................................. L. M. Percentage (divide line K by line L) ............................. M. N. Amount of interest deductions indirectly attributable to investment capital (multiply line J by line M; enter this amount on Form CT-3-ATT, line 17) ....... N.
%
Line 18 -- Enter the amount of noninterest deductions that are indirectly attributable to investment capital, or to income, gains, or losses from investment capital, from Line 18 worksheet, line R, on page 29. If you completed the Line 5b worksheet on page 28, skip lines A through I on the Line 18 worksheet, and enter on line J the amount from the Line 5b worksheet, line J. Line 21 -- Apportion any NOLD claimed on Form CT-3, line 13, between business income and investment income. Divide investment income before deduction of any NOL by ENI before deduction of any NOL. Multiply the result by the NOLD and enter this amount.
Page 26 of 30
CT-3/4-I (2008) Schedule C worksheet
Line instructions for Form CT-3-ATT
-- was subject to tax under Tax Law, Article 9, section 186 for the tax year ending on December 31, 1999. A qualified power producer is a taxpayer that: -- was not subject to ratemaking supervision by the New York State Department of Public Service on December 31, 1999; and -- was subject to tax under Tax Law, Article 9, section 186 for the tax year ending on December 31, 1999, because it was principally engaged in the business of supplying electricity. A qualified pipeline is a taxpayer that: -- was subject to ratemaking supervision by the Federal Energy Regulatory Commission or the New York State Department of Public Service on December 31, 1999; and -- was subject to tax under Tax Law, Article 9, sections 183 and 184 for the tax year ending on December 31, 1999, because it was principally engaged in the business of pipeline transmission. A public utility, power producer, or pipeline corporation that does not meet the above definitions is not required to make the 208.9(c-2) and (c-3) adjustments. % Transition property is property placed in service by a qualified public utility, qualified power producer, or qualified pipeline before January 1, 2000, for which a depreciation deduction is allowed under IRC section 167. Property is transition property only for the taxpayer that owns it on January 1, 2000, and is not transition property in the hands of a subsequent transferee. (However, see the instructions for Schedule D, lines 40 and 41, for a basis adjustment that may inure from transition property.) Book basis of transition property is the cost of the property minus the accumulated depreciation on the property determined on the taxpayer's books and records in accordance with GAAP. New York basis of transition property is the cost of the property minus the aggregate of the New York depreciation deductions allowed on the property under Tax Law Article 9-A. This aggregate is the sum of the amounts on Schedule D, line 37, for tax years 2004 through 2008, and Schedule E, line 63, for tax years 2000 through 2003.
Liabilities indirectly attributable to a particular asset A. Total liabilities (enter amount from Form CT-3, line 31, column C) ................................................. A. Liabilities directly attributable to: B. Subsidiary capital.................................................. C. Investment capital ................................................. D. Business capital .................................................... E. Total liabilities directly attributable (add lines B, C, and D) ............................................................. F. Total liabilities indirectly attributable (subtract line E from line A) ................................................. G. Average value of subsidiary capital (enter amount from Form CT-3-ATT, line 27, column C) ................... H. Average value of adjusted total assets (enter amount from Form CT-3, line 30, column C) .............. I. Divide line G by line H .......................................... B. C. D. E. F. G. H.
I.
J. Multiply line F by line I .......................................... J. K. Value of the particular asset ................................. K. L. Enter amount from line G...................................... L. M. Divide line K by line L ........................................... M. N. Enter amount from line J....................................... N. O. Liabilities indirectly attributable to a particular asset (multiply line M by line N) ................................. O. Column E -- Determine the net average value of each item listed in column A by subtracting column D from column C. The net average value of any item cannot be less than zero. Column F -- Enter the issuer's allocation percentage for each item listed in column A. See the instructions for Form CT-3-ATT, Schedule B, Part 1, Section 1, column F, on page 23. Column G -- Multiply net average value, column E, of each item listed in column A by its issuer's allocation percentage in column F. This is the value of subsidiary capital allocated to New York State. Line 30 -- Deduct 100% of the value of subsidiary capital for subsidiaries subject to tax under Tax Law Article 32 (banking corporations), Article 33 (insurance corporations), and Article 9, section 186. Attach a breakdown of subsidiaries eligible for this deduction. Line 32 -- Multiply line 31 by the tax rate of .0009. This is your subsidiary capital base tax. Enter this amount on Form CT-3, line 77. %
Schedule D, Part 1 -- Adjustments for qualified
public utilities and transferees
Complete this part if you are a qualified public utility. Use lines 33 through 43 to compute the adjustments for ENI. Transferees: if you are not a qualified public utility but you are a transferee of transition property from a qualified public utility, use only lines 40, 41, and 43 to compute the adjustments for ENI.
Other additions Line 33
Transition property -- federal depreciation -- Enter the amount deducted on your federal return for depreciation of transition property. See line 37 instructions to compute the New York depreciation deduction. Transition property is defined above.
Schedule D -- Qualified public utilities and
transferees, qualified power producers, and qualified pipeline corporations
General
Qualified public utility corporations must adjust ENI to reflect modifications for depreciation, and federal gain or loss on transition property, and for regulatory assets pursuant to Tax Law section 208.9(c-2). Complete Schedule D, Part 1. Transferees (whether or not qualified public utilities) of transition property from a qualified public utility in a tax-free transaction must adjust ENI to reflect modifications to federal gain or loss subsequently recognized on the transition property, pursuant to Tax Law section 208.9(c-2)(6)(B)(iv). Complete only lines 40, 41, and 43. Qualified power producers and qualified pipeline corporations must adjust ENI to reflect modifications for depreciation on transition property pursuant to Tax Law section 208.9(c-3). Complete Schedule D, Part 2. A qualified public utility is a taxpayer that: -- was subject to ratemaking supervision by the New York State Department of Public Service on December 31, 1999; and
Line 34
Transition property -- federal loss -- If transition property is sold or otherwise disposed of at a loss for federal income tax purposes, you must recalculate the amount of the loss for New York using book basis in place of federal tax basis for the property. Enter here the amount of loss deducted on your federal return and see line 38 instructions to recalculate the loss for New York.
Line 35
Transition property -- New York gain -- If transition property is sold or otherwise disposed of at a gain for federal income tax purposes in a tax year ending before 2010 (or at any time thereafter if the property is a nuclear electric generating facility), you must recalculate the amount of the gain for New York using New York basis in place of federal tax basis for the property. However, this recalculation can only reduce the federal gain to zero; it cannot produce a New York loss. Enter here the New York gain on transition property calculated using New York basis. If recalculation of the federal gain using New York basis yields a loss, the New York gain is zero. See line 39 instructions to subtract the federal gain.
Line instructions for Form CT-3-ATT
CT-3/4-I (2008) Page 27 of 30
Other subtractions Line 37
Transition property -- New York depreciation -- In place of the federal depreciation deduction entered on line 33, enter the amount of depreciation expense on transition property shown on your books and records for the tax year and determined in accordance with GAAP. In the case of a financing arrangement where for federal purposes the qualified public utility is treated as the owner of the transition property and allowed a depreciation deduction for federal income tax purposes but not allowed a depreciation deduction for GAAP purposes, you should compute the New York depreciation deduction in accordance with GAAP as if the transition property was depreciated on your books and records.
Other additions
Line 44 -- Enter the amount deducted on your federal return for depreciation of transition property. Transition property is defined on page 26.
Other subtractions
Line 45 -- In place of the federal depreciation deduction entered on line 44, compute a New York depreciation deduction by treating all of your transition property as a single asset placed in service on the first day of the tax year that ends in 2000. The New York State basis for depreciation is the net book value of your transition property on the first day of the federal tax year that ends in 2000 (or on the later date in 1999 that the property is placed in service). To compute the New York deduction, use net book value, the straight-line depreciation method, a 20-year life, and a salvage value of zero. For qualified power producers, net book value is the cost of your transition property minus the accumulated depreciation shown on your books and records, and determined in accordance with GAAP. For qualified pipeline corporations, net book value is the cost of your transition property minus the accumulated depreciation shown on your books and records, and determined in accordance with the regulatory reports filed with the Federal Energy Regulatory Commission or the New York State Department of Public Service.
Line 38
Transition property -- New York loss -- In place of the federal loss entered on line 34, compute the New York loss on the sale or other disposition of transition property by using book basis instead of federal tax basis.
Line 39
Transition property -- federal gain -- Enter the amount of gain included on your federal return from the sale or other disposition of transition property. See line 35 instructions to recalculate the gain for New York.
Lines 40 and 41
Transition property basis adjustment carryover -- If transition property is disposed of in a nonrecognition transaction (original disposition), such as a tax-free reorganization or a trade-in for replacement property, a basis adjustment on the transition property carries over to the transferee of the property, or to the replacement property, to reduce the gain or increase the loss in a subsequent recognition transaction involving the property that was former transition property or the replacement property.
Line 40
Federal gain -- If the former transition or replacement property is sold at a gain for federal income tax purposes in a tax year ending before 2010 (or at any time thereafter if the property is a nuclear electric generating facility), the gain is reduced, but not below zero, by the New York basis differential. The New York basis differential is the amount by which the New York basis of the property exceeds its federal tax basis on the date of original disposition. Enter here the New York basis differential of property that was former transition property or the replacement property sold at a federal gain this year, but not more than the amount of differential necessary to bring the federal gain to zero.
Line 41
Federal loss -- If the former transition or the replacement property is sold at a loss for federal income tax purposes, the loss is increased by the amount of the book basis differential. The book basis differential is the amount by which the book basis of the property exceeds its federal income tax basis on the date of original disposition. Enter here the book basis differential of the former transition property or the replacement property sold at a federal loss this year.
Line 42
Regulatory assets -- Enter the amounts recognized as expense on your books and records for the tax year that were recognized as expense for federal income tax purposes in a tax year ending on or before December 31, 1999, if: (a) such amounts represent expenditures that, when made, were charged to a deferred debit account or similar asset account on your books and records; (b) the recognition of expense on your books and records is matched by revenue stemming from a procedure or adjustment allowing the recovery of such expenditures; and (c) such revenue is recognized for federal income tax purposes in the tax year.
Schedule D, Part 2 -- Adjustments for qualified power producers and qualified pipeline corporations
Complete this part if you are a qualified power producer or a qualified pipeline corporation and you claim a depreciation deduction on transition property for federal income tax purposes. Use lines 44 and 45 to compute the adjustments for ENI.
Page 28 of 30
CT-3/4-I (2008)
Worksheet for Form CT-3
Line 5b worksheet
Noninterest deductions indirectly attributable to subsidiary capital
A. Enter federal noninterest deductions shown on federal Form 1120, line 27 (excluding the amount from federal Form 1120, line 18) ................................................. A. B. Enter amounts of noninterest deductions included on line A that must be added back to FTI in computing ENI (other than the amounts on Form CT-3, lines 4b and 5b). Include the New York State excess depreciation amount described in Tax Law section 208.9(b)(11) to the extent that amounts are subtracted in computing ENI for prior tax years that began on or after January 1, 1987. Enter the Form CT-3 line numbers and amounts below.
Line # Line # Line # Amount Amount Amount
Total B. C. Balance (subtract line B from line A) ........................... C. D. Enter amounts of noninterest deductions listed below that must be subtracted from FTI in computing ENI. -- For a taxpayer organized outside the United States, deductions attributable to income that is not included in FTI but must be included in ENI (for example, foreign source income) (20 NYCRR 3-2.3(a)(9)). -- The portion of wages and salaries paid or incurred for the tax year for which a deduction is not allowed pursuant to IRC section 280C (Tax Law section 208.9(a)(7)). -- Depreciation deductions for decoupled property (Tax Law section 208.9(a)(11) and (12)). -- Deductions arising from decoupling from federal safe harbor lease provisions (Tax Law section 208.9(a)(10)). -- The noninterest deductions taken in computing the amount on Form CT-3, line 2. -- Depreciation deductions for decoupled property (Tax Law section 208.9(o) and (p)). -- Related member royalty payment deduction (Tax Law section 208.9(o)). -- SUV recapture (Tax Law section 208.9(a)(16)). -- Deduction for qualified public utilities and transferees (Tax Law section 208.9(c-2)). -- Deduction for qualified power producers and qualified pipelines corporations (Tax Law section 208.9(c-3)). -- Deduction for sale of QETI (Tax Law section 208.9(l)). -- Deduction for eligible settlement fund or eligible grantor trust (Tax Law section 13).
E. Total New York State noninterest deductions included in ENI (add lines C and D) .......................... E. F. Enter noninterest deductions directly attributable to subsidiary capital (from Form CT-3, line 4b) ............ F. G. Enter noninterest deductions directly attributable to investment capital (from Form CT-3-ATT, line 16) ....................................................................... G. H. Enter noninterest deductions directly attributable to business capital .................................................. H. I. Subtotal (add lines F, G, and H) .................................. I. J. Noninterest deductions subject to indirect attribution (subtract line I from line E; see instructions for line R) .................................................................. J. K. Enter gross income attributable to subsidiary capital. Gross income from subsidiary capital is that portion of total gross income consisting of dividends, interest, and gains (but not losses) from subsidiary capital. To determine the amount to enter on line K, take the amount of dividends, interest, and gains reported on Form CT-3-ATT, line 26, and add back any losses used to compute the amount of capital gains from subsidiary capital on Form CT-3-ATT, line 25 ......... K. L. Enter total gross income. For these purposes total gross income means gross income as defined in IRC section 61, increased by (a) those items described in section 61 that are included in the computation of ENI by reason of Tax Law section 208.9(c) (relating to foreign source income), and (b) interest on state and local bonds excluded from gross income under IRC section 103. Gross income is not reduced by any deduction for capital losses or by any other deductions ..................................................... L. M. Income percentage (divide line K by line L) ................ M. N. Enter amount from Form CT-3-ATT, line 27, column C .... N. O. Enter amount from Form CT-3, line 30, column C .... O. P. Asset percentage (divide line N by line O) .................. P. Q. Subsidiary capital percentage (If line L is zero, the subsidiary capital percentage is equal to the asset percentage. If line O is zero, the subsidiary capital percentage is equal to the income percentage.) %; a. Enter percentage from line M % multiply by 2 .......................................... % b. Enter percentage from line P ............... % c. Total (add lines a and b) .......................... d. Subsidiary capital percentage (divide line c by 3) ................................................... Q. R. Amount of noninterest deductions indirectly attributable to subsidiary capital (Multiply line J
by the percentage from line Q or, if an election has been made to use the asset percentage, by the percentage from line P. Enter this amount on Form CT-3, line 5b.) .................................................... R.
% %
%
Enter the Form CT-3 line numbers and amounts below.
Line # Line # Line # Amount Amount Amount
Total D.
(instructions continue on page 13)
Worksheet for Form CT-3-ATT
CT-3/4-I (2008) Page 29 of 30
Line 18 worksheet Noninterest deductions indirectly attributable to investment capital
A. Enter federal noninterest deductions included on federal Form 1120, line 27 (excluding the amount from federal Form 1120, line 18) .............................. A. B. Enter amounts of noninterest deductions included on line A that must be added back to FTI in computing ENI (other than the amounts on Form CT-3, lines 4b and 5b). Include the New York State excess depreciation amount described in Tax Law section 208.9(b)(11) to the extent that such amounts are subtracted in computing ENI for prior tax years that began on or after January 1, 1987. Enter the Form CT-3 line number and amounts below. Line # Line # Line # Amount Amount Amount Total B. E. Total New York State noninterest deductions included in ENI (add lines C and D) ............................ E. F. Enter noninterest deductions directly attributable to subsidiary capital (from Form CT-3, line 4b) ............. F. G. Enter noninterest deductions directly attributable to investment capital (from Form CT-3-ATT, line 16) ...................................................................... G. H. Enter noninterest deductions directly attributable to business capital.................................................... H. I. Subtotal (add lines F, G, and H) ................................... I. J. Noninterest deductions subject to indirect attribution (subtract line I from line E; see instructions for line R) .................................................. J. K. Enter gross income attributable to investment capital. Gross income from investment capital is that portion of total gross income consisting of (a) dividends, interest, and gains (but not losses) from investment capital, and (b) items described in 20 NYCRR 4-8.3(a)(2) (5). To determine the amount to enter on line K, take the amount of total investment income reported on Form CT-3-ATT, line 14, and add back any dividends excluded on Form CT-3, line 11, and any losses used to compute the amount of capital gains from investment capital on Form CT-3-ATT, line 12............................................. K. L. Enter total gross income. For these purposes, total gross income means gross income as defined in IRC section 61, increased by (a) those items described in section 61 that are included in the computation of ENI by reason of Tax Law section 208.9(c) (relating to foreign source income), and (b) interest on state and local bonds excluded from gross income under IRC section 103. Gross income is not reduced by any deduction for capital losses or by any other deductions. .......... L. M. Income percentage (divide line K by line L) ................. M. N. Enter amount from Form CT-3-ATT, line 7, column C ................................................................. N. O. Enter amount from Form CT-3, line 30, column C .... O. P. Asset percentage (divide line N by line O) ................... P. Q. Investment capital percentage (if line L is zero, the investment capital percentage is equal to the asset percentage. If line O is zero, the investment capital percentage is equal to the income percentage.)
C. Balance (subtract line B from line A) ............................. C. D. Enter amounts of noninterest deductions listed below that are required to be subtracted from FTI in computing ENI. -- For a taxpayer organized outside the United States, deductions attributable to income that is not included in FTI but is required to be included in ENI (for example, foreign source income) (section 208.9(c); see also 20 NYCRR 3-2.3(a)(9)). -- The portion of wages and salaries paid or incurred for the tax year for which a deduction is not allowed pursuant to IRC section 280C (Tax Law section 208.9(a)(7)). -- Depreciation deductions for decoupled property (Tax Law, section 208.9(a)(11) and (12)). -- Deductions arising from decoupling from federal safe harbor lease provisions (Tax Law section 208.9(a)(10)). -- The noninterest deductions taken in computing the amount on Form CT-3, line 2. -- Depreciation deductions for decoupled property (Tax Law section 208.9(o) and (p)). -- Related member royalty payment deduction (Tax Law section 208.9(o)). -- SUV recapture (Tax Law section 208.9(a)(16)). -- Deduction for qualified public utilities and transferees (Tax Law section 208.9(c-2). -- Deduction for qualified power producers and qualified pipelines corporations (Tax Law section 208.9(c-3)). -- Deduction for sale of QETI (Tax Law section 208.9(l)). -- Deduction for eligible settlement fund or eligible grantor trust (Tax Law section 13). Enter the Form CT-3 line number and amounts below. Line # Amount Line # Line # Amount Amount Total D.
%
%
%; a. Enter percentage from line M multiply by 2 .........................................
%
% b. Enter percentage from line P ............... % c. Total (add lines a and b) .......................... d. Investment capital percentage (divide line c by 3) .................................................. Q.
R. Amount of noninterest deductions indirectly attributable to investment capital (Multiply line J by the percentage from line Q or, if you made an election to use the asset percentage, by the percentage from line P. Enter this amount on line 18 of Form CT-3-ATT.) ....................................... R.
%
(instructions continue on page 25)
Page 30 of 30
CT-3/4-I (2008)
General information
When preparing and mailing your General Business Corporation Franchise Tax Return, please be sure to: · Read the instructions. · Use the correct forms. · Include your EIN and file number on each form filed. · Have the appropriate individuals sign the completed return. · Make your check or money order payable to: New York State Corporation Tax. · Attach Forms CT-3-ATT, CT-38, and all other schedules you are required to file. · Attach a complete copy of your federal return to Form CT-3 or CT-4. · Attach the appropriate tax credit forms if you claimed any tax credits. · Assemble your return and attachments this way:
Copy of your federal return Separate sheets
(identify by the EIN, file number, and form number, if applicable)
Important identifying information
To assist in processing your corporation tax forms, please be sure to accurately complete the corporation's identifying information, including your current address.
Keep a record of your identifying information for future use.
If you use a paid preparer or accounting firm, make sure they use your complete and accurate information when completing all forms prepared for you. Name, address, and business information If your address has changed, enter your new address in the appropriate area and mark an X in the box below the address so that we can update your address for this tax type. Do not mark this box for any change of business information other than for your address. You must report any changes in your business name, ID number, mailing address, physical address, telephone number, or owner/officer information on Form DTF-95, Business Tax Account Update. If only your address has changed, you may use Form DTF-96, Report of Address Change for Business Tax Accounts, to correct your address for this and all other tax types. You can get these forms from our Web site, by fax, or by phone. See Need help? below.
Other required forms Tax credit forms
Form CT-3-ATT Form CT-3 Payment
Need help?
Internet access: www.nystax.gov (for information, forms, and publications)
For mailing address information, see Where to file on page 4. Your rights under the Tax Law
The Taxpayer Bill of Rights requires, in part, that the Tax Department advise you, in writing, of your rights and obligations during an audit, when you appeal a departmental decision, and when your appeal rights have been exhausted and you need to understand enforcement capabilities available to the department to obtain payment. For a complete copy of the information contained in all of these statements, you may request Publication 131, Your Rights and Obligations Under the Tax Law, by calling (see Need help? below). Privacy notification
The Commissioner of Taxation and Finance may collect and maintain personal information pursuant to the New York State Tax Law, including but not limited to, sections 5-a, 171, 171-a, 287, 308, 429, 475, 505, 697, 1096, 1142, and 1415 of that Law; and may require disclosure of social security numbers pursuant to 42 USC 405(c)(2)(C)(i). This information will be used to determine and administer tax liabilities and, when authorized by law, for certain tax offset and exchange of tax information programs as well as for any other lawful purpose. Information concerning quarterly wages paid to employees is provided to certain state agencies for purposes of fraud prevention, support enforcement, evaluation of the effectiveness of certain employment and training programs and other purposes authorized by law. Failure to provide the required information may subject you to civil or criminal penalties, or both, under the Tax Law. This information is maintained by the Director of Records Management and Data Entry, NYS Tax Department, W A Harriman Campus, Albany NY 12227; telephone 1 800 225-5829. From areas outside the United States and outside Canada, call (518) 485-6800.
Fax-on-demand forms: Forms are available 24 hours a day, 7 days a week. 1 800 748-3676 Telephone assistance is available from 8:00 A.M. to 5:00 P.M. (eastern time), Monday through Friday. To order forms and publications: 1 800 462-8100 Corporation Tax Information Center: 1 888 698-2908 From areas outside the U.S. and outside Canada: (518) 485-6800 Text Telephone (TTY) Hotline (for persons with hearing and speech disabilities using a TTY): If you have access to a TTY, contact us at 1 800 634-2110. If you do not own a TTY, check with independent living centers or community action programs to find out where machines are available for public use. Persons with disabilities: In compliance with the Americans with Disabilities Act, we will ensure that our lobbies, offices, meeting rooms, and other facilities are accessible to persons with disabilities. If you have questions about special accommodations for persons with disabilities, please call 1 800 972-1233.
Free Form CT-3-4-I - New York
| File Size: | 246.7 kB |
| Pages: | 30 |
| File Format: | |
| State: | New York |
| Category: | Tax Forms |
| Author: | t40192 |
| Word Count: | 38,224 Words, 234,800 Characters |
| Page Size: | Letter (8 1/2" x 11") |
| URL |
http://www.tax.state.ny.us/pdf/2008/corp/ct3_4i_2008.pdf |
| Download Form CT-3-4-I ( 246.7 kB) |
Preview Form CT-3-4-I
Popular Searches
United States Free Forms
Canada Free Forms
United Kingdom Free Forms
Australia Free Forms