Allocation of single rent for two or more taxable premises. Where, under the terms of a lease, the lessee pays a single rent to the lessor for two or more taxable premises, the rent applicable to each such premises shall be ascertained in accordance with the allocation formula prescribed herein. The allocation formula is based on three factors as follows:
(1) Property factor.
(i) The lessee is required to set forth:
(A) the average value of the tangible personal property employed or used by him in each taxable premises occupied or used by him during the tax period, and
(B) the average value of all tangible personnel property employed or used by him in all of the taxable premises occupied or used by him during the tax period.
(ii) The words "tangible personal property" as used herein, mean and include all corporeal personal property, such as furniture, furnishings, machinery, tools, implements, goods, wares and merchandise, and do not mean or include money, deposits in banks, shares of stock, bonds, notes, credits, or evidences of an interest in property and evidences of debt. The values as at the beginning and the end of each tax period may be averaged to obtain the value of the tangible personal property employed or used in the taxable premises.
(iii) A percentage for each taxable premises is then to be computed on the basis of a fraction, using the average value of the property of each taxable premises under (A) as the numerator, and the average value of all tangible personal property in all of the taxable premises under (B) as the denominator.
(2) Wages and salaries factor.
(i) The lessee is required to set forth the total amount of wages, salaries and other personal services compensation paid during the tax period
(A) to officers and employees who work in, or from, or are attached to, each taxable premises, and
(B) to all officers and employees engaged or employed in all of the taxable premises.
(ii) A percentage for each taxable premises is then to be computed on the basis of a fraction using the total amount set forth in (A) as the numerator and the total amount under (B) as the denominator.
(iii) The wages and salaries factor shall include all forms of compensation paid to officers and regular employees. Amounts paid to persons whose relationship is that of an independent contractor are not to be included.
(3) Receipts factor. The lessee is required to ascertain the receipts from sales and services during each taxable period applicable to each taxable premises. A percentage is then to be computed for each taxable premises on the basis of a fraction, using as the numerator the total receipts from each such taxable premises and, as the denominator, the total receipts from all such taxable premises. The percentages which are determined for the three factors for each taxable premises are to be added and the total thereof is to be divided by three to obtain the average percentage for each taxable premises. If the numerator and denominator of any fraction are both zero, the factor is deemed to be non-existent and shall be omitted in calculating the average of the percentage. In such event, the total of the remaining percentages is to be divided by the existing factors. If, however, the numerator alone is zero and the denominator is represented by an amount, there is a resultant factor, viz., zero, which is to be included in the calculation of the average of the percentages. The average percentages thus obtained for each taxable premises is to be applied to the total single rent paid for all taxable premises to obtain the amount of the rent applicable to each taxable premises as illustrated below. The allocation formula shall be employed, even though included in the total number of premises for which a single rent is paid there may be included one or more premises which are not taxable premises. In such case, the premises which are not taxable premises shall, for the purposes of the allocation formula, be included in each factor. Whenever the Commissioner of Finance shall determine, either upon his own initiative or upon application by the taxpayer, that the prescribed allocation formula works unfairly or inequitably to a particular taxpayer or class of taxpayers, he may provide for a different or other method of allocation which is calculated to effect a fair and proper apportionment of rent applicable to each taxable premises. When preparing a final return for a tax year for each taxable premises, the factors described above shall cover the full tax year.
Example 1:
Taxable and/or Non-Taxable Premises | |||||
Item No. | Factors | A | B | C | Total |
1) | Tangible personal property | $10,000 | $15,000 | $25,000 | $50,000 |
2) | Salaries and wages | $30,000 | $36,000 | $54,000 | $120,000 |
3) | Receipts from sales and services | $105,000 | $150,000 | $245,000 | $500,000 |
4) | Rent paid | $50,000 | |||
Percent to Total* | |||||
A | B | C | Total | ||
5) | Tangible personal property | 20% | 30% | 50% | 100% |
6) | Salaries and wages | 25% | 30% | 45% | 100% |
7) | Receipts | 21% | 30% | 49% | 100% |
8) | Total percentage (Items 5 to 7) | 66% | 90% | 144% | |
9) | Average percentage (Item 8÷ 3) | 22% | 30% | 48% | |
10) | Rent applicable to each premises (Item 9 × Item 4) Where premises are taxable, include applicable amount in base rent | $11,000 | $15,000 | $24,000 | $50,000 |
* To obtain percentage of each factor for each premises, divide the amount of the factor for each premises by the total amount of the same factor for all premises.
Base rent. The rent paid for each taxable premises by a tenant to his landlord for a period, less the amounts received by or due such tenant for the same period from any subtenant of any part of such premises, as provided in the law. These allowable deductions are:
(1) Amounts received or due as rent for premises which constitute taxable premises of such subtenant.
Example 2: A tenant rents a store for business purposes for a rent of $34,000 per year. He sublets part of the store to a concessionaire for business purposes for a rent of $18,000 per year. The tenant's base rent is $16,000.
(i) No deduction is permitted where the subtenant is exempt from tax because he uses the premises for no more than fourteen days in a tax year, whether or not consecutive, where his agreement with the landlord does not require him to pay rent for a longer period (see 19 RCNY § 7-04(f)(1)).
Example 3: A tenant rents a store for business purposes for an annual rent of $12,000. During the year he permits the use of a portion of the store for a period of one day each month by a concessionaire who pays rent of $500 for each day's occupancy. The tenant's base rent is $12,000. Since the concessionaire is exempt from tax because he uses the premises for less than 14 days in a tax year, rent paid by the concessionaire is not deductible from the rent paid by the tenant.
(ii) No deduction is permitted where the subtenant is exempt from tax because his base rent for the tax year is under the amount prescribed in 19 RCNY § 7-04(f)(2).
To illustrate: The tenant of a store pays rent of $20,000 per year. He sublets part of the store to a subtenant for business purposes for a rent of $4,500 per year. The tenant's base rent is $20,000. Since the subtenant is exempt from tax because his base rent is not more than $4,999 per year (after December 1, 1984, not more than $10,999 per year), the subtenant's rent payments are not deductible from the rent paid by the prime tenant.
(2) (i) However for the periods beginning on and after June 1, 1985, rent received or due from a tenant exempt from tax pursuant to 19 RCNY § 7-04(f)(2) may be deducted if such subtenant occupies or uses the premises pursuant to a written agreement made prior to June 1, 1984 (or June 1, 1985 where the subtenant is exempt because of the reduction in base rent provided for in 19 RCNY § 7-01 "base rent" (6)(ii), the terms and conditions of which have not been changed or amended.
Example 4: The tenant of a store pays rent of $25,000 per year. He sublets part of the store to a subtenant for a rent of $10,000 per year pursuant to a written agreement executed May 1, 1984, the terms and conditions of which have not been changed or amended. The tenant's base rent is $15,000. Although the subtenant is exempt from tax because his base rent is not more than $10,999 per year, the subtenant's rent payments are deductible from the rent paid by the prime tenant because they are made pursuant to a written agreement made prior to June 1, 1984, the terms and conditions of which have not been changed or amended. The tenant of a store in Queens County pays rent of $25,000 per year. He sublets part of the store to a subtenant for a rent of $12,000 per year pursuant to a written agreement executed May 1, 1985, the terms and conditions of which have not been changed or amended. For the tax year June 1, 1985 through May 31, 1986, the tenant's base rent is $13,000. The deduction is permitted because from June 1, 1985 through December 31, 1985, the subtenant is subject to tax and from January 1, 1986 through May 31, 1986, the tenant, though exempt from tax because the 10% reduction allowable under 19 RCNY § 7-01 "base rent" (6) brings his base rent under $11,000 for that period, occupies or uses the taxable premises under a lease executed before June 1, 1985, the terms and conditions of which have not been changed.
This exception allowing the deduction of rent paid by or due from an exempt subtenant does not apply if the terms and conditions of the written lease agreement are changed or amended in any material respect, including (but not limited to) any change or amendment to the amounts payable by the subtenant to or on behalf of his landlord or any other material change affecting the financial obligation of the subtenant; terms relating to the tenants use of the premises or his obligations relating to improvement, repair or maintenance of the premises; the amount of space leased or the term of lease. Not included are changes in the financial obligation of the subtenant fixed and determined by the terms of the lease at the time of its execution.
Example 5: A tenant of a store pays rent of $25,000 per year. On June 1, 1983, he sublets part of the store to a subtenant for business purposes. The lease is to run for five years and the annual rent is $4,000 for the first year, $5,000 for the second, and $7,000 for the third, fourth and fifth years. For tax periods June 1, 1983 through May 31, 1984, and June 1, 1984 through May 31, 1985, the tenant's base rent is $25,000 (no deduction is permitted); for the tax periods June 1, 1985 through May 31, 1986 and June 1, 1986 through May 31, 1987, the tenant's base rent is $18,000 ($25,000 – $7,000). On June 1, 1987, the lease is amended to increase the last year's rental to $10,000 and to extend the term of the lease for an additional year for a $10,000 rental payment. The tenant's base rent for the tax periods June 1, 1987 through May 31, 1988 and June 1, 1988 through May 31, 1989 is $25,000 (no deduction is permitted).
(3) Amounts received or due as rent for premises which do not constitute taxable premises and which are used by a tenant as lodging or residential premises (including such residential premises in hotels, apartment hotels or lodging houses as defined in the Tax on Occupancy of Hotel Rooms Law imposed by Chapter 25 of Title 11 of the Administrative Code of the City of New York, or effective August 1, 1965, in the Sales Tax Law imposed by Subchapter 1 of Chapter 20 of Title 11 of the Administrative Code of the City of New York).
Example 6: The owner of a hotel leases the hotel to an operating company, which pays the owner an agreed rent. The operating company rents rooms in the hotel to residential guests. The operating company's base rent consists of the rent paid by it to the owner, less the amounts received or due to it from the guests.
(4) Amounts received or due from a subtenant who is exempt from tax under subdivisions (a) through (f) of 19 RCNY § 7-04.
Example 7: A lessee of an office building rents office space in the building to commercial tenants and to a charitable organization which uses the office for non-profit purposes. The lessee, in order to arrive at the amount of his base rent, may deduct from the rent paid by him the rent received by him from the charitable organization, as well as the rent received by him from the commercial tenants.
(5) Amounts received or due as rent for premises which do not constitute taxable premises where such rent is, or to the extent that such rent is deductible from the base rent of such tenant by reason of the fact that such premises are taxed pursuant to the Tax on Occupancy of Hotel Rooms imposed by Chapter 25 of Title 11 of the Administrative Code of the City of New York City or, effective August 1, 1965, pursuant to the Sales Tax Law imposed by Subchapter 1 of Chapter 20 of Title 11 of the Administrative Code of the City of New York, to the extent that such premises are subject to, and during the period they are subject to, such tax.
To illustrate: The owner of a hotel leases the hotel to an operating company, which pays an agreed rent to the owner. The operator rents a meeting room to a civic association, which pays the operator the tax on occupancy of hotel rooms imposed by Chapter 25 of Title 11 of the Administrative Code of the City of New York, or, effective August 1, 1965, the Sales Tax imposed by Subchapter 1 of Chapter 20 of Title 11 of the Administrative Code of the City of New York. The operator, in order to arrive at the amount of his base rent, may deduct the amount of rent paid to it by the civic association.
(6) Amounts received as rent for premises which do not constitute taxable premises, pursuant to a common-law relationship of landlord and tenant (notwithstanding the definition given to those terms in 19 RCNY § 7-01 "Landlord" and "Tenant"), except where it is received as rent, whether or not such landlord-tenant relationship exists, for premises which are occupied as or constitute:
(i) a locker, safe deposit box or beach cabana;
(ii) storage space in part of a warehouse or in part of any other structure or area in which goods are stored;
(iii) garage space or parking space in any part of a garage, of a parking lot or of a parking area where the entire garage, entire parking lot or entire parking area accommodates more than two motor vehicles;
(iv) an occupancy of a type which customarily has not been the subject of such a common-law relationship of landlord and tenant. Thus, where the occupancy does not give rise to a common-law relation ship of landlord and tenant, the amount received for such occupancy may not be deducted from rent for the purpose of computing base rent subject to the tax, unless the occupancy is one for the conduct of business, in which case, the rent may be deducted by reason of the provisions of paragraph (1) above.
(v) A civic organization enters into a lease with a sublessor of a building for a period of two years. Under the lease, the civic organization agrees to pay the lessor an annual rental of $3,000. The premises occupied by the civic organization does not constitute taxable premises. Accordingly, the rental paid by the civic organization to the sublessor may be taken as a deduction from the rent paid by the sublessor in determining the sublessors base rent.
(vi) The lessee of a public garage rents space in the garage to a private individual for the storage of the latter's automobile which is devoted solely to personal use. The lessee, for the purpose of determining the amount of his base rent, may not deduct from the rent paid by him to his landlord the amounts received by him from the owner of the automobile for storage of the car. If the space were rented for the storage of motor vehicles used in business, such as trucks, the lessee would be permitted to deduct the amounts received by him for the storage of such trucks in arriving at the amount of his base rent unless the subtenant is exempt from tax thereon under 19 RCNY § 7-04(f).
(vii) A broker holding securities for the account of its customers places such securities in a safe deposit box rented from a bank, for which the broker pays a fixed rental charge. The bank is a tenant of the premises. No common-law relationship exists between the bank and the broker. The rent received by the bank from the broker may be deducted from its rent for the purpose of computing its base rent subject to tax. The broker must report the rent paid by him to the bank as his base rent for the occupancy of the safe deposit box.
Where the consideration paid or required to be paid by a tenant is for the use or occupancy of taxable premises and services, such as stenographic services, answering services, mail services and the like, furnished by the landlord or lessor, the total consideration paid or required to be paid shall be deemed to be base rent. However, if the agreement between the landlord or sublessor with the tenant separately states the amount of the consideration applicable to the rent for the premises and the amount applicable to the services, the amount applicable to the rent for the premises only shall be deemed to be base rent of the tenant. In such case the lessor, if a tenant, may deduct from his base rent the amount received from his tenant as such base rent. Where a theatre owner and a theatrical producer enter into an agreement for the rental of a certain theatre on the basis of what is commonly known as a "four wall contract," whereby the theatre owner, as landlord, merely leases the theatre building to the producer for a fixed rental, the amount of rent paid by the producer to the theatre owner constitutes base rent and is subject to the tax. Where a theatre owner and a theatrical producer enter into an agreement for the use of a certain theatre on the basis of what is commonly known as a "booking contract," whereby the theatre owner agrees to furnish to the producer a lighted, heated and cleaned theatre, with the scenery and equipment contained therein, the necessary stage hands, carpenters, electricians, property men, janitors, ushers, ticket sellers, doorkeepers, house orchestra, etc. for a percentage of the box office receipts, that portion of the receipts paid by the producer to the theatre owner which is applicable to the use or occupancy of the theatre shall be deemed to be base rent and subject to the tax. In such case, the burden of establishing the amount of the receipts not applicable to the use or occupancy of the theatre shall be on the producer. Where the rent paid for each taxable premises by a tenant to his landlord for a period is equal to, or is exceeded by, the amounts received by or due such tenant for the same period from any sublessees of all or any part of said premises, which are deductible in determining the base rent, the tenant is not required to pay any tax. However, both the tenant and sublessees are required to file returns for such periods. Nothing contained in these regulations shall be construed to permit a tenant to deduct the same rent from his base rent more than once.
(7) (i) For tax periods beginning on and after June 1, 1967, whenever the rent paid by a tenant for his occupancy of taxable premises is measured in whole or in part by the gross receipts from his sales within such premises, his rent, to the extent paid on the basis of such gross receipts, shall not be deemed to exceed 15 percent of such gross receipts. This 15 percent limitation applies where the rental agreement provides for a rent based wholly or partly on a percentage of sales receipts and the stated percentage exceeds 15 percent. The maximum rent in such cases is the higher of 15 percent of gross receipts or the fixed rental plus 15 percent of sales subject to the percentage.
To illustrate:
(A) A tenant leases a store for an annual rental of 25 percent of his gross receipts from sales. The gross receipts for the year total $200,000 and the tenant pays his landlord $50,000. The rent subject to tax is $30,000 (15 percent of $200,000).
(B) A tenant leases a store for an annual rental of $50,000 plus 25 percent of his gross receipts from sales in excess of $200,000. The gross receipts for the year total $300,000 and the tenant pays his landlord $75,000. The rent subject to tax is $65,000 ($50,000 fixed rental plus 15 percent of sales over $200,000).
(ii) For taxable premises located in Manhattan north of 96th Street,or in the Bronx, Brooklyn, Queens or Staten Island, a deduction may be taken in computing base rent (after all other deductions and exemptions have been taken) as follows:
For Tax Periods | Reduction |
Beginning January 1, 1986 ending May 31, 1987 | 10% |
Beginning June 1, 1987 ending May 31,1989 | 20% |
Beginning on and after June 1, 1989 | 30% |
To illustrate: For the tax year June 1, 1986 through May 31, 1987, a tenant rents a store in Queens for $20,000 per year. He is permitted a 20% reduction in computing his base rent. His base rent is $16,000.
Day. A "day" shall mean a calendar day or any part thereof.
Dramatic or musical arts performance. "Dramatic or musical arts performance" shall mean a performance or repetition thereof in a theatre, opera house or concert of a live dramatic performance, whether or not musical in part. The performances encompassed by this definition include so-called legitimate theatre plays, musical comedies and operettas. They do not include circuses, ice skating shows or aqua shows; they do not include performances of any kind in a roof garden, cabaret or other similar place; and they do not include radio or television performances, whether or not such performances are prerecorded for later broadcast.
Landlord. "Landlord" shall mean a person who grants the right to use or occupy premises to any lessee, sublessee, licensee or concessionaire, whether or not he is the owner of the premises.
Person. "Person" shall mean an individual, partnership, society, association, joint stock company, corporation, estate, receiver, assignee, trustee or any other person acting in a fiduciary capacity, whether appointed by a court or otherwise, and any combination of individuals.
Persons using or occupying two or more locations in the same premises. "Persons using or occupying two or more locations in the same premises" is where a person occupies or uses two or more locations in the same premises which under the law constitute taxable premises and for the occupancy or use of which he is subject to the tax, the aggregate of the rentals paid for all such locations in the same premises will be deemed to be rent paid for one taxable premises for the purpose of filing quarterly and final returns and computing the tax due thereon.
Premises. "Premises" shall mean any real property or part thereof, and any structure thereon or space therein.
Premises used for air transportation purposes. "Premises used for air transportation purposes" is the portion of any premises located within an airport or within an air transportation terminal shared by more than one airline, of any person actually operating an airline as a common carrier, used by such person for normal or necessary air transportation purposes. The words "normal or necessary air transportation purposes," as used in the definition, do not include any activities which are normally carried on by persons not engaged in furnishing air transportation service, such as the operation of retail stores, barber shops, restaurants, theatres, hotels and newsstands.
Premises used for omnibus transportation purposes. "Premises used for omnibus transportation purposes" shall mean the portion of any premises located within a passenger terminal of any person actually operating an omnibus line or route as a common carrier, used by such person for normal or necessary omnibus line or route transportation purposes. The words "normal or necessary omnibus line or route transportation purposes," as used in this definition, do not include any activities which are normally carried on by persons not engaged in furnishing omnibus line or route transportation services, such as the operation of retail stores, barber shops, restaurants, theatres, hotels and newsstands.
Premises used for railroad transportation purposes. "Premises used for railroad transportation purposes" shall mean the portion of any premises of any person actually operating a railroad, used by such person for normal or necessary railroad transportation purposes. The words "normal or necessary railroad transportation purposes," as used in this definition, do not include any activities which are normally carried on by persons not engaged in furnishing railroad transportation service, such as the operation of retail stores, barber shops, restaurants, theatres, hotels and newsstands; nor do such words include any activities which are not deemed transportation purposes under § 489-b and § 489-m of the New York Real Property Tax Law. Where a railroad company rents taxable premises for normal and necessary railroad transportation purposes and a part of such premises is leased by it to sublessees and concessionaires, the tax shall be applicable to so much of the rent paid by the railroad company to its landlord as is ascribable to the part leased by it to the sublessees and concessionaires, less the amounts received by or due the railroad company for the same period from its sublessees and concessionaires.
Rent. The consideration paid or required to be paid by a tenant for the use or occupancy of premises, valued in money, whether received in money or otherwise, including all credits and property or services of any kind and including any payment required to be made by him on behalf of his landlord for real estate taxes, water rents or charges, sewer rents or any other expenses (including insurance) normally payable by a landlord who owns the realty other than expenses for the improvement, repair or maintenance of the tenant's premises. Included in rent but not limited thereto are payments of a fixed rental, a rental based on a percentage of sales or profits and other payments made as rent. Consideration for the occupancy of premises may be in a form other than money. It may consist, for example, of services rendered or property furnished by the tenant. If the occupancy is gratuitous and without consideration in any sense of the word, no tax is payable. With respect to the rent paid or required to be paid by a tenant-owner in a cooperative building, it is necessary to determine the nature of such rent. The following payments are deemed to be made as an owner, and not as a tenant, and therefore not includable in determining the amounts of rent paid:
(1) The initial purchase price of the shares of stock or other evidence of the ownership of the tenant-owner.
(2) Payments made by the tenant-owner as his share on account of the principal amount of any mortgage on the premises or on account of any interest on such mortgage.
(3) Payments made by the tenant-owner as his share of the cost of capital improvements to the premises.
(4) Payment made by the tenant-owner as his share of:
(i) real estate taxes and assessments, and
(ii) water rents or sewer rents.
(5) Payments made by the tenant-owner as his share of the cost of insurance on the premises.
(6) All other payments made by the tenant-owner which are in the nature of capital expenditures. The following payments made by the tenant-owner are includable as rent:
(7) Payments made by a tenant-owner which are applicable to the operation of the premises, and are necessary for the occupancy and use by the tenant-owner, such as payments made for fuel, gas and electricity.
(8) Operating and maintenance expenditures other than those deemed to be in the nature of capital expenditures, such as expenditures for normal repairs, salaries and wages paid to elevator operators and doormen, superintendents and other personnel for the proper functioning and use of the" premises by the tenant-owner. Any rent paid by a tenant shall be included as base rent and reported as such in the return for the period when paid. However, any rent due a tenant from his sublessee for the period for which a return is filed, whether or not actually received by the tenant during the period covered by the return, shall be deducted, if deduction is permitted, (See 19 RCNY § 7-01 "base rent") from the rent paid by the tenant during such period irrespective of the method of accounting employed by the tenant. The tenant may not again deduct such rent when received.
Return. "Return" shall mean any return filed or required to be filed as herein provided other than an information return.
Tax period. "Tax period" shall be the period for which any return is required to be filed under these regulations.
Tax year. "Tax year" shall be June first of any calendar year through May thirty-first of the following calendar year.
Taxable premises. "Taxable premises" shall mean any premises in the City occupied, used or intended to be occupied or used for the purpose of carrying on or exercising any trade, business, profession, vocation or commercial activity, including any premises so used even though it is used solely for the purpose of renting, or granting the right to occupy or use, the same premises in whole or in part to tenants; except premises within the area leased by the City of New York to the New York World's Fair 1964-1965 Corporation pursuant to Chapter 428 of the Laws of 1960, as amended, during the period of such lease. The following illustrate types of premises occupied by a tenant as taxable premises:
(1) Premises occupied or used as leased departments in department stores, as florists, beauty parlors, barber shops, lunchrooms, shoe repairing shops, optometrists, or any other commercial activity.
(2) Premises occupied or used in City parks, as restaurants, golf courses, archery ranges, boating concessions, or any other commercial activity.
(3) Advertising signs on the tops of buildings or outside of buildings or structures, or located on otherwise unoccupied land.
(4) Automobile parking lots and garages, tennis courts, skating rinks, baseball fields and other enterprises.
(5) Business of any kind conducted by a tenant in premises used for both residential and business purposes to the extent that such premises is used for business purposes.
(6) Safe deposit vaults rented as an incident to a business, such as the leasing of a safe deposit vault by a stockbroker for the safekeeping of securities.
(7) Office space and desk space.
(8) Premises occupied or used in ball parks, theatres, race tracks, etc. for the sale of refreshments, programs, or the checking of clothing. Premises not devoted to or intended for use in the conduct of a trade or business are not taxable premises. Premises used or occupied or intended to be used or occupied by a person or organization exempt from the tax under § 11-704(a)(4) of the Administrative Code are not taxable premises with respect to that person or organization.
Tenant. A person paying or required to pay rent for premises as a lessee, sublessee, licensee or concessionaire. Such person shall include, but shall not be limited to, a corporation which leases the premises from another corporation of which the lessee corporation is a subsidiary or with which it is affiliated. Where a tenant leases premises for a consideration to other persons, the tax applies to the tenant and to his sublessees. Rent received or due from such sublessees may, with certain exceptions, be deducted by the tenant in computing his base rent subject to tax (see: 19 RCNY § 7-01 "base rent"). The owner of record of a building, who occupies space therein, is not deemed to be a tenant for purposes of the tax. However, in such case, proof of his ownership may be required, such as a receipt for a mortgage payment, last owner's card, or deed, etc. A tenant-stockholder or tenant-owner in a cooperative building who occupies premises in such building for the purpose of carrying on or exercising any trade, business, profession, vocation or commercial activity is subject to the tax.