Sec. 1-3.1. Domestic corporations subject to tax

Tax Law, § 209(1)

The tax is imposed on every domestic corporation, not specifically exempt as provided in section 1-3.4 of this Subpart, for the privilege of exercising its corporate franchise, that is to say, for the mere possession of the privilege. Accordingly, a domestic corporation is subject to tax for each fiscal or calendar year, or part thereof, during which it is in existence, regardless of whether it does any business, employs any capital, owns or leases any property, maintains any office or engages in any activity, within or without New York State. A domestic corporation is subject to tax even though it carries on its business entirely outside New York State.

Example:

A corporation is incorporated under the laws of New York State on July 1, 1989. It begins to do business on February 1, 1990, setting up its books on the basis of a calendar year. The corporation is subject to tax from July 1, 1989 to December 31, 1989, since it had the privilege of exercising its corporate franchise for that period. It is also subject to tax for the period beginning January 1, 1990.