Sec. 1-3.5. Change of classification

Tax Law, § 209(1)

(a) A corporation subject to tax under article 9-A of the Tax Law may, by reason of a change in the nature of its activities or a change in the ownership or control of its voting stock, cease to be subject to such tax and become taxable under some other article of the Tax Law. Conversely, a corporation subject to tax under some other article of the Tax Law may, for the same reasons, cease to be taxable thereunder and become subject to tax under article 9-A of the Tax Law. The date on which any such change of classification becomes effective will be determined by the facts of each case.

(b) A corporation which becomes subject to tax under article 9-A of the Tax Law during one of its fiscal or calendar years by reason of a change in classification is treated in the same manner as a corporation which became subject to tax during such year. (See section 1-1.1 of this Part—Nature of tax—and sections 1-3.1 and 1-3.2 of this Subpart.)

(c) A corporation which ceases to be subject to the franchise tax imposed by article 9-A of the Tax Law during one of its fiscal or calendar years by reason of a change of classification is treated, insofar as article 9-A of the Tax Law is concerned, in the same manner as a corporation which is dissolved or ceases to be taxable in New York State during such year. (See section 2-3.1 of this Title—Cessation period.)