Sec. 3-4.1. Computing the tax measured by the minimum taxable income base

Tax Law, §§ 210(1)(c) and (3-a), 211(4)

(a) Generally, the minimum taxable income base is the measure of tax if such calculation results in a greater amount of tax than that computed on the entire net income base, the capital base or the fixed dollar minimum. The rate of tax measured by the minimum taxable income base is:

(1) five percent for taxable years beginning in 1990, 1991, 1992, 1993 and 1994; and

(2) three and one-half percent for taxable years beginning after 1994.

(b) The term minimum taxable income base means the portion of the taxpayer's minimum taxable income allocated within New York State, as described in section 210(3-a) of the Tax Law, subject to any modifications allowed by sections 210(3)(d) and 210(3)(e) of the Tax Law.

(c) Minimum taxable income is divided into alternative business income and alternative investment income. The portion of the minimum taxable income allocated within New York State is determined by multiplying alternative business income by the alternative business allocation percentage, multiplying alternative investment income by the investment allocation percentage, and adding the results so obtained. (See section 210[3-a] of the Tax Law.)

(d) Where a group of corporations files a combined report, the combined minimum taxable income base is the measure of tax if such calculation results in a greater amount of tax than that computed on the combined entire net income base, the combined capital base or the fixed dollar minimum that is attributable to the corporation paying the combined tax. The combined minimum taxable income base is the total of the amounts of the minimum taxable income of each corporation included in the combined report with intercorporate eliminations (see section 3-4.5 of this Subpart) or the portion of such total allocated within New York State.

(e) For rules relating to corporate partners, see Subpart 3-13 of this Part—Corporate Partners.