Instructions for Form NYC-3L NEW YORK

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Instructions for Form NYC-3L NEW YORK F I N A N C E Instructions for Form NYC-3L NEW YORK General Corporation Tax Return For fiscal years beginning in 2006 or for calendar year 2006 Highlights of Recent Tax Law Changes for Corporations For tax years beginning after 2005, qualifying taxpayers that relocate to an industrial business zone (IBZ) to engage in industrial and manufacturing activities may be eligible for a one-time refundable credit equal to $1,000 for each full-time employee at eligible premises in the IBZ, with certain limits. Use Form NYC-9.6 to claim the credit against the General Corporation Tax. For films and shows completed on or after January 1, 2005, eligible taxpayers are allowed a Made in NYC Film Production Credit equal to 5% of the qualified production costs paid or incurred in the production of qualified films and television shows. Use Form NYC-9.9 to claim the credit against the General Corporation Tax. For tax years beginning on or after January 1, 2004, in determining entire net income (“ENI”) of taxpayers, other than eligible farmers (for purposes of the New York State farmers' school tax credit), the amount allowed as a deduction with respect to a sport utility vehi- cle that is not a passenger automobile for purposes of section 280F(d)(5) of the Internal Revenue Code is limited to the amount allowed under section 280F as if the vehicle were a passenger automobile as defined in that section. For SUVs that are qualified prop- erty, other than qualified Resurgence Zone property and other than New York Liberty Zone property, the amount allowed as a deduc- tion is calculated as of the date the SUV was actually placed in service and not as of September 10, 2001. See, Finance Memorandum 06-1 dated October 12, 2006 “Application of IRC Section 280F Limits to Sports Utility Vehicles” for more information. The Relocation Employment Assistance Program (REAP) has been reinstated and a program granting similar benefits to businesses that relocate to lower Manhattan (LMREAP) has been enacted. Both the reinstatement of the REAP program and the enactment of the LMREAP program are effective as of July 1, 2003. See Administrative Code sections 11-604.17 and 11-604.19. Related members income and expense modifications—For tax years beginning on or after January 1, 2003, taxpayers may be required to add back to ENI certain payments for the use of intangible property, such as trademarks or patents, made during the tax year to related member(s) to the extent such payments were deducted in computing federal taxable income. Where the related member is a New York City taxpayer, the related member must subtract from ENI those payments received during the tax year to the extent the payments were included in federal taxable income and were required to be added back to the ENI of a related taxpayer. See Chapter 686 of the Laws of 2003, Part M. Effective for tax periods beginning on and after August 1, 2002, entities that receive eighty percent or more of their gross receipts from charges for the provision of mobile telecommunications services to customers will be taxed as if they were regulated utilities for pur- poses of the New York City Utility Tax, General Corporation Tax, Banking Corporation Tax and Unincorporated Business Tax. Thus, such entities will be subject to only the New York City Utility Tax. The amount of gross income subject to tax has been amended to conform to the Federal Mobile Telecommunications Sourcing Act of 2000. In addition, if any such entity is a partnership, its partners will not be subject to the New York City Utility Tax on their distributive share of the income of any such entity. Finally, for tax years beginning on and after August 1, 2002, partners in any such entity will not be taxed on their distributive share of the income of any such entity. Chapter 93, Part C, of the Laws of New York, 2002. Effective for tax years ending after September 10, 2001, for purposes of the New York City Unincorporated Business Tax, General Corpo- ration Tax and Banking Corporation Tax, the City has "decoupled" from the Federal bonus depreciation deductions allowed under the Job Creation and Worker Assistance Act of 2002 and the Jobs and Growth Tax Relief Reconciliation Act of 2003, except with respect to the depreciation deductions allowed with respect to "qualified New York liberty zone property", "qualified New York liberty zone leasehold improvements" and "qualified property" placed in service in the Resurgence Zone (generally the area in the borough of Manhattan South of Houston Street and North of Canal Street.) For City tax purposes, depreciation deductions for all other "qualified property" must be cal- culated as if the property was placed in service prior to September 11, 2001. See, Finance Memorandum 02-3 (Revised) "New York City Tax Consequences of Certain Retroactive Federal and New York Tax Law Changes" and Form NYC-399Z for more information. GENERAL INFORMATION TRANSITIONAL PROVISIONS subject to tax after 2000 is considered to RELATING TO THE ENACTMENT have been subject to whichever tax, GCT or S CORPORATIONS OF THE GRAMM-LEACH-BLILEY ACT BCT, would have applied based on its activi- An S Corporation is subject to the General OF 1999: ties had it been a taxpayer prior to 2000. Corporation Tax and must file either Form NYC-4S or NYC-3L, whichever is applicable. Existing Corporations: Ad. Code §11-640 was amended to similarly See Finance Memorandum 99-3 for informa- Except for a banking corporation described require a corporation that was in existence tion regarding the treatment of qualified sub- in paragraphs (1) through (8) of Ad. Code prior to January 1, 2001 to be taxed in years chapter S subsidiaries. section 11-640(a) (see, Form NYC-1, beginning after 2000 and before 2003 under Instructions "Who Must File" items A the same tax, either GCT or BCT, that CORPORATION DEFINED through C), for taxable years beginning applied to it for the last year beginning before Unincorporated entities electing to be treat- after 1999 and before 2001, a corporation 2001. Ch. 383, Laws of 2001, Part P, §8. ed as associations taxable as corporations for that was in existence before January 1, 2000 Ad. Code 11-640 was further amended to federal income tax purposes pursuant to the was taxable under the same tax (either NYC require a corporation that was in existence “check-the-box” rules under IRC §7701(a)(3) General Corporation Tax (GCT) or NYC prior to January 1, 2003 to be taxed in years are treated as corporations for City tax pur- Banking Corporation Tax (BCT)) as applied beginning after 2002 and before 2004 under poses and are not subject to the Unincorpo- to it for its last taxable year beginning the same tax, either GCT or BCT, that rated Business Tax. Eligible entities having a before January 1, 2000. For this purpose, a applied to it for the last year beginning single owner disregarded as a separate entity corporation was considered to have been before 2003. Ch. 62, Pt. G3, sec. 6 of the under the “check-the-box” rules and treated subject to a tax prior to 2000 if it was not a Laws of 2003. Ad. Code §11-640 again was as either a sole proprietorship or a branch for taxpayer but was properly included in a amended in 2004 to require a corporation federal tax purposes will be similarly treated combined report filed by another corpora- that was in existence prior to January 1, for City tax purposes. See Finance Memoran- tion under that tax. A corporation that was 2004 to be taxed in years beginning after dum 99-1 for additional information. in existence prior to 2000 but first became Instructions for Form NYC-3L - 2006 Page 2 2003 and before 2006 under the tax, either GCT 2006. Ch. 60, Pt. G, §6 of the Laws of 2004. 7) it claims a credit for sales and compen- or BCT, that applied to it for the last year Also, new Ad. Code § 11-640(k) permits a sating use taxes paid in the current beginning before 2004. Ch. 60, Pt.G, §6 of the qualifying corporation formed on or after year or is required to adjust its current Laws of 2004. January 1, 2006 and before January 1, 2008 to General Corporation Tax as a result of make a comparable election for its first tax- Code 11-640 was also amended in 2006 to re- able year beginning after 2005 and before 2008. credits claimed in prior years. See the quire a corporation that was in existence prior Ad. Code § 11-640(k), as added by Ch. 62, Pt.I, instructions to Form NYC-9.5 and the to January 1, 2006 to be taxed in years begin- of the Laws of 2006. instructions for Schedule B, lines 6a ning after 2005 and before 2008 under the tax, Combined Filing under Transitional Provisions and 14 for more information. either the GCT or the BCT that applied to it 8) it claims a credit for increased real for the last year beginning before 2006. Ad. A bank holding company doing business in Code § 11-640(k), as added by Ch. 62, Pt.I, the City that, during a taxable year beginning estate tax payments made to a landlord of the Laws of 2006. after 1999 and before 2008, registers for the in connection with the relocation of first time as a bank holding company under employment opportunities to New York Newly-formed Corporations: the Bank Holding Company Act of 1956, as City, as provided in Section 11-604.13 of amended, and elects to be a financial holding A corporation formed on or after January 1, company, may file a combined report under the NYC Admin.
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