(a) General.
(1) The tax is imposed on every domestic and foreign corporation, with specified exceptions, whose activities include one or more of the following:
(i) doing business in New York City in a corporate or organized capacity or in a corporate form; or
(ii) employing capital in New York City in a corporate or organized capacity or in a corporate form; or
(iii) owning or leasing personal or real property in New York City in a corporate or organized capacity or in a corporation form; or
(iv) maintaining an office in New York City.
(2) Except as provided in 19 RCNY § 11-04(b)(7), a corporation engaged in New York City in any one or more of the activities described in paragraph (1) of this subdivision is subject to tax even though its activities are wholly or partly in interstate or foreign commerce.
(3) Pursuant to Public Law 86-272 (15 U.S.C. §§ 381 - 384), a foreign corporation is not subject to the general corporation tax if its activities in the State are limited to the solicitation of orders in New York City (or elsewhere in the State) by the corporation's employees, representatives or independent contractors for sales of tangible personal property, which orders are sent outside New York State for approval or rejection, and which, if approved, are filled by shipment or delivery from a point outside New York State. (For further discussion of Public Law 86-272, see 19 RCNY § 11-04(b)(11), infra.)
(4) A foreign corporation engaged in New York City in any one or more of the activities described in paragraph (1) of this subdivision is subject to tax regardless of whether it is authorized to do business in New York State.
(5) If a partnership is doing business, employing capital, owning or leasing property or maintaining an office in New York City, then all of its corporate general partners are subject to the general corporation tax. The term "partnership" means a partnership, joint venture or other similar unincorporated entity. (For rules regarding the treatment of corporate limited partners, see 19 RCNY § 11-06, infra.)
(6) A dissolved corporation that continues to conduct business is subject to the tax. (A corporation in liquidation that is not subject to the general corporation tax may be subject to the unincorporated business tax. See § 11-502(a) of the Administrative Code.)
(b) Doing business. (1) The term "doing business" is used in a comprehensive sense and includes all activities that occupy the time or labor of people for profit. Regardless of the nature of its activities, every corporation organized for profit and carrying out any of the purposes of its organization is deemed to be doing business for the purpose of the tax. In determining whether a corporation is doing business, it is immaterial whether its activities actually result in a profit or a loss.
(2) Whether a corporation is doing business in New York City is determined by the facts in each case. Consideration is given to such factors as:
(i) the nature, continuity, frequency, and regularity of the activities of the corporation in New York City;
(ii) the purposes for which the corporation was organized;
(iii) the location of the corporation's offices and other places of business;
(iv) the employment in New York City of agents, officers, and employees; and
(v) the location of the actual seat of management or control of the corporation.
(c) Employing capital. The term "employing capital" is used in a comprehensive sense. Any of a large variety of uses, which may overlap other activities, may give rise to taxable status. In general, the use of assets in maintaining or aiding the corporate enterprise or activity in New York City will make the corporation subject to tax. Employing capital includes such activities as:
(1) maintaining stockpiles of raw materials or inventories; or
(2) owning materials and equipment assembled for construction.
(d) Owning or leasing property. The owning or leasing of real or personal property within New York City constitutes an activity that subjects a corporation to tax. Property owned by or held for the tax payer in New York City, whether or not used in the taxpayer's business, is sufficient to make the corporation subject to tax. Property held, stored, or warehoused in New York City, whether on private premises or in public warehouse, creates taxable status. Property held as a nominee for the benefit of others creates taxable status. Also, consigning property to New York City may create taxable status if the consignor retains title to the consigned property.
(e) Maintaining an office. A corporation that maintains an office in New York City is engaged in an activity that makes it subject to tax. An office is any area, enclosure, or facility that is used in the regular course of the corporate business. A salesperson's home, a showroom, a hotel room, or a trailer used on a construction job site may constitute an office.
(f) Examples. The following are examples of corporations that are subject to tax because they are doing business, or employing capital, or owning or leasing property in a corporate or organized capacity or maintaining an office in New York City:
(1) A corporation is operated for and is organized for the purpose of buying and selling securities. It does not maintain a physical office anywhere, other than a statutory office in the state of its incorporation. Regular and continuous purchases of securities are directed by its officers or agents located in New York City. The corporation is subject to tax.
(2) A corporation is created to take title to real property in New York City as an agent for the beneficial owner. The corporation is otherwise inactive. The corporation is subject to tax.
(3) A corporation participates in a joint venture that carries on business in New York City. The corporation is not otherwise engaged in any activities in New York City. The corporation is subject to tax.
(4) A manufacturing corporation has its factories and offices located outside New York City. Its sole activity in New York consists of holding or storing goods in a public warehouse. The corporation is subject ot tax.
(5) A corporation that has no office or other place of business in New York City leases automobiles to New York City customers. It is subject to tax.
(6) A corporation operates a commercial laundry. Its plant and offices are located outside New York City. Among its customers are hotels, restaurants, and other businesses located in New York City. Company-operated vehicles come into the City daily to pick up soiled laundry and to deliver the cleaned items. The corporation is subject to tax.
(7) A corporation that operates several retail stores outside New York State, leases an office in New York City for the convenience of its buyers when they come to New York City. Salespeople for its suppliers call at the office to solicit orders. The merchandise is shipped by the suppliers directly to the offices of the corporation outside New York City. The corporation is subject to tax.
(8) A corporation formerly engaged in manufacturing outside New York City, discontinues such business and transfers its office to New York City where its activities consist solely of the acquisition of bonds and the receipt of interest on such bonds and the holding of directors' meetings. The corporation is subject to tax.
(9) A foreign manufacturing corporation has its factory outside New York State. Its only activity in New York City is the solicitation of orders for its products through a sales office located in New York City. The orders are forwarded to its home office outside the State for acceptance and the merchandise is shipped by common carrier from the factory directly to the purchasers. The corporation is subject to tax.
(10) A foreign manufacturing corporation has its factory outside New York State but maintains a stock of merchandise in Buffalo, New York. Its only activity in New York City is the solicitation of orders through traveling salesmen, or independent sales representatives, which orders are filled from its Buffalo warehouse. The corporation is subject to tax.
(11) The facts are the same as in Example 10, except that the merchandise stored at the Buffalo warehouse is used exclusively to fill orders obtained from customers in upstate New York. Orders obtained from New York City customers are filled from its warehouse located outside New York State. The corporation is subject to tax.
(12) A foreign corporation sends salespeople into New York City to solicit orders. The orders must be accepted at the home office of the corporation located in another state. The corporation displays goods in New York City at a space leased occasionally and for short terms. The corporation is subject to tax. (For further discussion of solicitation of sales issues, see 19 RCNY § 11-04(b)(11), infra, dealing with Public Law 86-272.)
(13) [Reserved.]