The following are exempt from the payment of the tax:
(a) The State of New York, or any public corporation (including a public corporation created pursuant to agreement or compact with another state or the Dominion of Canada), improvement district or other political subdivision of the State;
(b) The United States of America, insofar as it is immune from taxation;
(c) The United Nations or other worldwide international organizations of which the United States of America is a member; and
(d) Any corporation, or association, or trust, or community chest, fund or foundation, organized and operated exclusively for religious, charitable, or educational purposes, or for the prevention of cruelty to children or animals, and no part of the net earnings of which inures to the benefit of any private shareholder or individual and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation; provided, however, that nothing in this paragraph shall include an organization operated for the primary purposes of carrying on a trade or business for profit, whether or not all of its profit are payable to one or more organizations described in this paragraph.
(e) Any tenant who would be subject to tax under the law aggregating no more than $1.00 for a tax year with respect to all taxable premises used by him.
To illustrate: A tenant has desk space in an office which he is entitled to use for one day each week during the tax year beginning June 1, 1976, for which he pays $3.25 per month, or $39.00 a year. Since the tax on $39.00 is $.98 (2 1/2% × $39.00), which is less than $1.00 for the tax year, the tenant is exempt from the payment of such tax with respect to taxable premises used by him.
(f) (1) A tenant who uses premises for no more than fourteen days in a tax year whether or not consecutive, where his agreement with his landlord does not require him to pay rent for a longer period with respect to the rent paid by him for such premises.
To illustrate: Under an agreement entered into by a tenant with his landlord, the tenant has the right to use office space on the landlord's premises for one day a week for a period of one year, for which he is required to pay rent of $20.00 for each such day. Under the agreement, the tenant has the right to terminate his occupancy at any time before the end of the year without the payment of any additional rent. After the tenth day of occupancy, the tenant terminates his occupancy. Since the total occupancy of the tenant is not more than fourteen days, viz., ten days, and the tenant is not required to pay additional rent for a longer period, he is exempt from paying the tax with respect to the rent paid by him for such premises.
(2) A tenant whose base rent is not more than the following amounts during the periods specified:
(i) For tax years beginning on or after June 1, 1981 and ending on or before May 31, 1984.....$4,999
(ii) For the tax year beginning June 1, 1984 and ending May 31, 1985.....$7,999
Note: A tenant whose base rent for this tax year is not in excess of $10,999, is exempt from tax for the period beginning December 1, 1984 and ending May 31, 1985.
(iii) For tax years beginning on or after June 1, 1985.....$10,999
In determining whether this exemption applies in a case where the base rent of a tenant is for a period of less than one year, such base rent must be determined as if it had been paid on an equivalent basis for the entire year.
To illustrate: A tenant rents a store during the months of June, July and August, for which his base rent is $4,000. Since his base rent, if paid on an equivalent basis for the entire year, would amount to $16,000 ($4,000 ÷ 3) × 12), he is not exempt from the tax.
(g) A tenant who uses taxable premises for renting to others for residential purposes to the extent of 75 percent or more of the rentable floor space is exempt from the tax imposed by the law with respect to the rent paid for such premises from the time that construction thereof commenced, provided, however, that this paragraph shall not be applicable to hotels, apartment hotels or lodging houses as defined in Chapter 25 of Title 11 of the Administrative Code of the City of New York or, effective August 1, 1965, in Subchapter 1 of Chapter 20 of Title 11 of the Administrative Code of the City of New York.
Example 1: On June 1, 1963, a builder leases a plot of land for ninety-nine years. Under the terms of the lease, the builder has the right to, and does, construct an apartment house for residential purposes. The builder pays the landlord an annual rent of $100,000. On December 1, 1963, the builder commences the construction of the apartment house. When the building is completed, it will contain apartments available for residential purposes to the extent of 80 percent of the rentable floor space in the building. The builder is required to pay the tax on the rent due the landlord for the period from June 1, 1963 to December 1, 1963. The builder is exempt from paying the tax with respect to the rent paid for the premises from the time that construction of the building commenced, viz., December 1, 1963. Nevertheless, such builder is required to file an information return as provided for in these regulations.
The foregoing exemption similarly applies to a lessee of a building erected prior to the time he became such lessee, and which building is rented to others for residential purposes to the extent of 75 percent or more of the floor space thereof.
Example 2: A real estate concern becomes the lessee of an apartment house erected in 1950. The apartment house contains 100,000 square feet of rentable floor space, of which 80,000 square feet are for residential purposes. The real estate concern is exempt from the payment of the tax on the rents paid by it, but, nevertheless, is required to file an information return as provided in these regulations.
(h) A tenant who uses taxable premises for a dramatic or musical arts performance for less than four weeks where there is no indication prior to or at the time such performance commences that the performance is intended to continue for less than four weeks.
Example 1: A producer of a play rents a theatre for the production of the play for a period of twelve weeks. The play is not a success, and the producer closes down the show at the end of the three weeks. The producer is exempt from the payment of the tax with respect to the rent paid by it for the use of the theatre.
(i) (1) A tenant that uses taxable premises for the production and performance of a theatrical work shall be exempt with respect to the rent paid for such taxable premises for a period not exceeding 52 weeks beginning on the date that the production of that theatrical work commences in New York City.
(2) The term "theatrical work" shall mean a performance or repetition thereof in a theater of a live dramatic performance (whether or not musical in part) that contains sustained plots or recognizable thematic material, including so-called legitimate or experimental theater plays or musicals, dramas, melodramas, comedies, compilations, farces, reviews or dance plays, provided that such performance is intended to be open to the public for at least two weeks. The term "theatrical work" shall not include performances of any kind in a roof garden, cabaret or similar place, circuses, ice skating shows, aqua shows, variety shows, magic shows, animal acts, concerts, industrial shows or similar performances, or radio or television performances, whether or not such performances are pre-recorded for later broadcast.
(3) The date that the "production of a theatrical work commences" is the date that a taxable lease of the taxable premises commences. For purposes of this paragraph (3), a "taxable lease" is a lease with respect to which: (i) the tenant is not exempt from tax under § 11-704(a) paragraphs (1) through (4) of the Administrative Code; and (ii) the rent paid is subject to tax or would be subject to tax if it were greater than the amount that is exempt under § 11-704(b)(2) of the Administrative Code.
(4) If a theatrical work has been previously produced and performed in New York City, a determination whether a subsequent production, e.g., a revival, is entitled to the 52-week exempt period will be based on all the facts and circumstances, including, but not limited to, the identity of the theatrical work (theatrical works will be distinguished from other theatrical works under the standards used to determine whether a work constitutes "an original work of authorship" as used in § 102(a) of title 17 of the United States Code, whether or not the theatrical work is subject to a copyright under the provisions of that title), the identity of the tenant, the identities of other participants in the production (e.g., the producer, executive producer, director or designers), changes to the production (e.g., changes to the script, sets, or musical numbers), and public statements about the production. This paragraph will apply both when the previous production and performance of the theatrical work has closed and when a new tenant takes over the production and performance of the theatrical work.
(5) The 52-week exempt period will continue without interruption during periods when performances of the theatrical work are temporarily suspended.
(6) A production of a theatrical work will be entitled to only one 52-week exempt period. If the same theatrical work is produced and performed by the same tenant at more than one taxable premises simultaneously, the 52-week exemption period can be applied to only one taxable premises at any given time.
(7) The 52-week exempt period provided by this subdivision (i) will not apply to any theatrical work the production of which commenced before June 1, 1995.
(8) The following examples illustrate this subdivision (i):
Example (i): Effective January 1, 2005, Theatrical Production Company K leases Theater A in Manhattan below the center line of 96th Street to produce and perform Theatrical Work X, a theatrical work that had never previously been produced and performed in New York City. Production Company K uses the theater for rehearsals and previews and Theatrical Work X opens on February 1. The rent for Theater A is $250,000 annually. The 52-week exemption period begins on January 1, 2005.
Example (ii): The facts are the same as in Example (i), except that Production Company K produced and performed Theatrical Work X for three months in New Haven before it leased Theater A to produce and perform that work in the City. The period of production and performance outside of the City is not included in the 52-week period. The 52-week exemption period begins on January 1, 2005.
Example (iii): The facts are the same as in Example (i), except that from November 1 until December 31, 2004, Production Company K produced and performed Theatrical Work X in Brooklyn before opening in Theater A on January 1, 2005. Because the rent paid to lease the theater in Brooklyn was not subject to tax under § 11-704(h)(1) of the Administrative Code, the 52-week exemption period begins on January 1, 2005.
Example (iv): The facts are the same as in Example (i), except that on June 15 Production Company K stops performances of Theatrical Work X at Theater A, and Production Company K's lease of Theater A is terminated as of June 30. Production Company K leases Theater B for $260,000 annually beginning July 1, and soon thereafter, begins performances of Theatrical Work X at Theater B. The exemption period will end 52 weeks after January 1, 2005 and will apply to the rent paid by Production Company K to lease Theater A from January 1 to June 30 and the rent paid to lease Theater B from July 1 until the end of the exemption period. The exemption period includes the period from June 16 to June 30 when there are no performances.
Example (v): The facts are the same as in Example (iv), except that the rent Production Company K paid to lease Theater A was less than $250,000 on an annualized basis. Annualized rent of less than $250,000 is exempt from tax under § 11-704(b)(2)(x) of the Administrative Code. Under paragraph (3) of this subdivision, Company K's lease of Theater A is a taxable lease for purposes of this section. As a result, the exemption period will end 52 weeks from January 1, 2005.
Example (vi): The facts are the same as in Example (iv), except that Production Company K's lease of Theater A continues until July 31. Although Production Company K is paying rent on both Theater A and Theater B for the month of July, under paragraph (6) of this subdivision, the exemption applies to only one taxable premises at a time. Because Theatrical Work X is being produced and performed at Theater B during July, the exemption applies to the rent for Theater B during July. As a result, the exemption period will end 52 weeks from January 1, 2005 and will apply to the rent paid by Production Company K to lease Theater A from January 1 to June 30 and the rent paid to lease Theater B from July 1 until the end of the exemption period.
Example (vii): The facts are the same as in Example (i), except that Theatrical Work X is a revival of a theatrical work that was produced and performed in the City by Theatrical Production Company L, opening in 1975 and closing in 1977. Production Companies K and L are unrelated, and none of the participants involved in Company K's production were involved in the 1975 production. Based on the facts and circumstances, under paragraph (4) for purposes of this subdivision, the production of Theatrical Work X by Production Company K is considered to commence on January 1, 2005.
Example (viii): The facts are the same as in Example (iv), except that on June 15 Production Company K stops performances of Theatrical Work X at Theater A. On July 1, Production Company L leases Theater B, and soon thereafter, begins performances of Theatrical Work X at that theater. Theatrical Work X, as performed at Theater B, constitutes the same "original work of authorship" as used in § 102(a) of title 17 of the United States Code, as it was when it was performed at Theater A. The majority of the principals of Production Company K were involved in Production Company L, but a few principals are different. There were only minor changes in the cast, script, and sets. The producer, director and set designer are the same. Production Company L refers to the production at Theater A in promotional material for Theatrical Work X. Based on all the facts and circumstances, for purposes of this subdivision (i), the production of Theatrical Work X is considered to have commenced on January 1, 2005, and will be considered to continue when production is taken over by Production Company L. A new exemption period does not begin when Production Company L leases Theater B to produce and perform Theatrical Work X. As a result, the rent Production Company L pays to lease Theater B is exempt from tax from July 1 until 52 weeks from January 1, 2005.
Example (ix): The facts are the same as in Example (viii), except that Production Company K was a nonprofit entity exempt from tax under § 11-704(a)(4) of the Administrative Code. Under paragraph (3) of this subdivision, the production of a theatrical work commences when a lease commences with respect to which the rent paid is subject to tax. Because the rent Company K paid to lease Theater A was not subject to tax, the production of Theatrical Work X commences on July 1, 2005. As a result, the rent Production Company L pays to lease Theater B is exempt from tax for 52 weeks beginning on July 1, 2005.