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ÑÌà@ìì"ìàSTATE€OF€NEW€YORKˆà€N%N%O€%à€ˆÐ ˆØ Ðà@â â ìàDEPARTMENT€OF€TAXATION€AND€FINANCEˆÐ `° Ðà@‡ ‡ ìàCOMMISSIONER€OF€TAXATION€AND€FINANCEˆÐ 8 ˆ Ðà@"ìàALBANY,€NEW€YORKˆÐ  ` ÐÌà ° àPursuant€to€the€authority€contained€in€subdivision€First€of€section€171€and€subsection€(a)€of€section€1096Ð À  Ðof€the€Tax€Law,€the€Commissioner€of€Taxation€and€Finance€hereby€makes€and€adopts€the€following€amendmentsÐ ˜è  Ðto€the€Business€Corporation€Franchise€Tax€Regulations€of€the€Department€of€Taxation€and€Finance,€as€publishedÐ pÀ Ðin€Ô_ÔSubchapterÔ_Ô€A€of€Chapter€I€of€Title€20€of€the€Official€Compilation€of€Codes,€Rules€and€Regulations€of€the€StateÐ H˜ Ðof€New€York,€to€read€as€follows:Ð  p Ðà ° àSection€1.€€€The€index€of€Subpart€1„3€€is€amended€to€read€as€follows:Ð øH Ðà ° àSec.Ð Ð  Ðà ° à1„3.1€Domestic€corporations€subject€to€taxÐ ¨ø Ðà ° à1„3.2€Foreign€corporations€subject€to€taxÐ €Ð Ðà ° à1„3.3€Activities€deemed€insufficient€to€subject€foreign€[corporation]€òòcorporationsóó€to€taxÐ X ¨ Ðà ° à1„3.4€Corporations€not€subject€to€taxÐ 0"€  Ðà ° à1„3.5€Change€of€classification€€Ð $X" Ðà ° àSection€2.€€Subdivision€(e)€of€section€1„3.2€is€amended€to€read€as€follows:€Ð à%0!$ Ðà ° à(e)€ð ðForeign€corporationð"ð€maintaining€an€office.ðð€€€A€foreign€corporation€which€maintains€an€office€in€NewÐ ¸'#& ÐYork€State€is€engaged€in€an€activity€which€makes€it€subject€to€tax.€€An€office€is€any€area,€enclosure€or€facility€whichÐ )à$( Ðis€used€in€the€regular€course€of€the€corporate€business.€€A€[salesmanððs]€òòsalespersonððsóó€€home,€a€hotel€room,€or€a€trailerÐ h+¸&* Ðused€on€a€construction€job€site€may€constitute€an€office.€€Ð @-(,L Ðà ° àSection€3.€€€Paragraph€(7)€of€subdivision€(f)€of€section€1„3.2€is€amended€to€read€as€follows:€€Ð d Ðà ° à(7)€A€foreign€corporation€which€operates€several€retail€stores€outside€New€York€State€leases€an€office€in€NewÐ <Ø ÐYork€City€for€the€convenience€of€its€buyers€when€they€come€to€New€York€State.€[Salesmen]€òòSalespeopleóó€call€at€theÐ  ° Ðoffice€to€solicit€orders.€€The€merchandise€is€shipped€by€the€sellers€directly€to€the€offices€of€the€corporation€outsideÐ ì ˆ ÐNew€York€State.€€The€corporation€is€subject€to€tax.€€Ð Ä ` Ðà ° àSection€4.€€€€Paragraph€(9)€of€subdivision€(f)€of€section€1„3.2€is€amended€to€read€as€follows:Ð œ8  Ðà ° à(9)€A€foreign€corporation€sends€[salesmen]€òòsalespeopleóó€into€New€York€State€to€solicit€orders.€€€€The€ordersÐ t  Ðmust€be€accepted€at€the€home€office€of€the€corporation€located€in€another€state.€€The€corporation€displays€goods€inÐ Lè  ÐNew€York€City€at€aòòóó€space€leased€occasionally€and€for€short€termsòòóó.€€The€corporation€is€subject€to€tax.€€à (# àÐ $À Ðà ° àSection€5.€€€Section€1„3.3€is€amended€to€read€€as€follows:€€Ð ü˜ Ðà ° àSection€1„3.3€Activities€deemed€insufficient€to€subject€foreign€[corporation]€òòcorporationsóó€to€tax.€€(Tax€Law,Ð Ôp ÐSectionòòsóó€209(2)€òòand€209(2„a)óó)Ð ¬H Ðà ° àòò(a)óó€A€foreign€corporation€will€not€be€deemed€to€be€doing€business,€employing€capital,€owning€or€leasingÐ „  Ðproperty€in€a€corporate€or€organized€capacity€or€maintaining€an€office€in€New€York€State€because€of:€€Ð \ø Ðà ° à[(a)]€òò(1)óó€the€maintenance€of€cash€balances€with€banks€or€trust€companies€in€New€York€State;Ð 4 Ð Ðà ° à[(b)]€òò(2)óó€the€ownership€of€shares€of€stock€or€securities€kept€in€New€York€State€in€a€safe€deposit€box,€safe,Ð  "¨ Ðvault€or€other€receptacle€rented€for€this€purpose,€or€if€pledged€as€collateral€security,€or€if€deposited€in€safekeepingÐ ä#€  Ðor€custody€accounts€with€one€or€more€banks€or€trust€companies,€or€brokers€who€are€members€of€a€recognizedÐ ¼%X" Ðsecurity€exchange;Ð ”'0!$ Ðà ° à[(c)]€òò(3)óó€the€taking€of€any€action€by€any€such€bank€or€trust€company€or€broker,€which€is€incidental€to€theÐ l)#& Ðâ ârendering€of€safekeeping€or€custodian€service€to€such€corporation;€Ð D+à$( Ðà ° à[(d)]€òò(4)óó€the€maintenance€of€an€office€in€this€State€by€one€or€more€officers€or€directors€of€the€corporation€whoÐ d Ðâ âare€not€employees€of€the€corporation€if€the€corporation€is€not€otherwise€doing€business€or€employing€capital€in€NewÐ <Ø ÐYork€State€and€does€not€own€or€lease€property€in€New€York€State;€Ð  ° Ðà ° à[(e)]€òò(5)óó€the€keeping€of€books€or€records€of€a€corporation€in€New€York€State,€if€such€books€or€records€areÐ ì ˆ Ðnot€kept€by€employees€of€such€corporation€and€such€corporation€does€not€otherwise€do€business,€employ€capital,Ð Ä ` Ðown€or€lease€property,€or€maintain€an€office€in€New€York€State;[or]Ð œ8  Ðà ° àòò(6)€the€use€of€fulfillment€services€of€a€person,€other€than€an€affiliated€person,€located€in€New€York€State€andÐ t  Ðthe€ownership€of€property€stored€on€the€premises€of€such€person€in€conjunction€with€such€services.€€For€purposesÐ Lè  Ðof€this€paragraph,€the€terms€ð ðfulfillment€servicesðð,€€ð ðpersonðð€and€ð ðaffiliated€personðð€are€defined€in€sections€208(19),Ð $À Ð1101(a)€and€209(2)€of€the€Tax€Law€respectivelyóó;Ð ü˜ Ðà ° à(òò7)€the€participation€in€a€trade€show€or€shows,€regardless€of€whether€the€corporation€has€employees€or€otherÐ Ôp Ðstaff€present€at€such€trade€shows,€provided€the€corporationððs€activity€at€the€trade€show€is€limited€to€displaying€goodsÐ ¬H Ðor€promoting€services,€no€sales€are€made,€any€orders€received€are€sent€outside€New€York€State€for€acceptance€orÐ „  Ðrejection€and€are€filled€from€outside€the€state,€and€provided€that€such€participation€is€for€not€more€than€14€days,€orÐ \ø Ðpart€thereof,€in€the€aggregate€during€the€corporationððs€taxable€year€for€Federal€income€tax€purposes;€oróó€€Ð 4 Ð Ðà ° à[f]€òò(8)óó€any€combination€of€the€foregoing€activities.€€€Ð  "¨ Ðòòóóà ° àòò(b)€An€alien€corporation,€as€defined€in€section€209(2„a)€of€the€Tax€Law,€will€not€be€deemed€to€be€doingÐ ä#€  Ðbusiness,€employing€capital,€owning€or€leasing€property€in€a€corporate€or€organized€capacity€or€maintaining€an€officeÐ ¼%X" Ðin€New€York€State€if€its€activities€in€New€York€State€are€limited€solely€to€investing€or€trading€for€its€own€accountÐ ”'0!$ Ðin€(a)€stocks€and€securities€within€the€meaning€of€section€864(b)(2)€(A)(ii)€of€the€Internal€Revenue€Code,€or€€(b)Ð l)#& Ðcommodities€within€the€meaning€of€section€864(b)(2)(B)(ii)€of€the€Internal€Revenue€Code€or€(c)€any€combinationÐ D+à$( Ðof€stocks,€securities€and€commodities€described€in€paragraphs€(a)€and€(b)€above.óóÐ -¸&* Ðà ° àSection€6.€€€The€heading€of€section€1„3.4€is€amended€to€read€as€follows:€Ð d Ðà ° àSection€1„3.4€Corporations€not€subject€to€tax.€€(Tax€Law,€Sections€3,€[5]€òò8óó,€òò13,óó€208(9)(Ô_ÔiÔ_Ô),€209(4),€(9),€òò(10)óó)€ò òÔ€ýÔó óÐ <Ø Ðà ° àÔ€– ÔSection€7.€€Paragraph€(3)€of€subdivision€(a)€of€section€1„3.4€of€such€regulations€is€amended€to€read€asÐ  ° Ðfollows:€€Ô€÷ÔÐ ì ˆ ÐÔ€h!Ôà ° à(3)€[waterworks€companies,€gas€companies,€electric€or€steam€heating,€lighting€and€power€companies]Ð Ä ` Ðòòcontinuing€section€186€taxpayersóó€subject€to€tax€under€òòformeróó€section€186€of€the€Tax€Lawòòóó€òòas€it€was€in€effect€onÐ œ8  ÐDecember€31,€1999€(section€44€of€Part€Y€of€Chapter€63€of€the€Laws€of€2000)óó;€€Ð t  Ðà ° àSection€8.€€Subparagraph€(Ô_ÔiÔ_Ô)€of€paragraph€(5)€of€subdivision€(b)€of€section€1„3.4€is€amended€to€read€asÐ Lè  Ðfollows:€Ð $À Ðà ° à(Ô_ÔiÔ_Ô)€The€domestic€corporation€must€operate€the€vessels€regardless€of€whether€it€owns€them€or€has€leased€themÐ ü˜ Ðfrom€another€person€or€corporation.€€ð ðOperation€of€the€vesselsðð€means€the€direction€and€supervision€of€the€crew€andÐ Ôp Ðof€the€actual€movements€or€routes€of€the€vessels.€€The€Commissioner€[of€Taxation€and€Finance]€generally€deemsÐ ¬H Ðthe€furnishing€of€the€crew€as€the€operation€of€the€vessel.€€Ð „  Ðà ° àSection€9.€€€Clause€(h)€of€subparagraph€(iv)€of€paragraph€(9)€of€subdivision€(b)€of€section€1„3.4€is€amendedÐ \ø Ðand€a€new€clause€(Ô_ÔiÔ_Ô)€is€added€to€read€as€follows:€Ð 4 Ð Ðà ° àð ð(h)ðð€use€of€space€at€the€salespersonððs€home€solely€for€the€salespersonððs€convenience.€Ô_Ô(However,Ô_Ô€seeÐ  "¨ Ðsubparagraph€[vi]€of€this€paragraph€as€to€loss€of€immunity€for€maintaining€an€office.)òò€;€óóÐ ä#€  Ðà ° àòòð ð(Ô_ÔiÔ_Ô)ðð€participating€in€a€trade€show€or€shows,€provided€that€participation€is€for€not€more€than€14€days,€or€partÐ ¼%X" Ðthereof,€in€the€aggregate€during€the€corporationððs€taxable€year€for€Federal€income€tax€purposes.€€(However,€seeÐ ”'0!$ Ðsubparagraph€[vi]€of€this€paragraph€as€to€loss€of€immunity€for€maintaining€an€office.)óóÐ l)#& Ðà ° àSection€10.€€€Paragraph€(13)€of€subdivision€(b)€of€section€1„3.4€of€such€regulations€is€amended€and€newÐ D+à$( Ðparagraphs€(14),€(15)€and€(16)€are€added€to€read€as€follows:Ð -¸&* ÐÑ@¨Ñâ âÑ  Ñâ âÑ  Ñà ° à(13)€€for€any€taxable€year€beginning€on€or€after€January€1,€1987,€an€organization€described€in€paragraph€(2)Ð d Ðor€(25)€of€subdivision€(c)€of€section€501€of€the€Internal€Revenue€Code[.]òò;Ô€ï$ÔóóÐ <Ø Ðà ° àòòÔ€¶+Ô(14)€€redevelopment€companies€organized€pursuant€to€article€5€of€the€Private€Housing€Finance€Lawóó;Ð  ° Ðà ° àòò(15)€a€qualified€Ô_ÔsubchapterÔ_Ô€S€subsidiary€(Ô_ÔQSSSÔ_Ô)€corporation,€as€defined€in€section€208(1„B)€of€the€Tax€Law,Ð ì ˆ Ðprovided€it€meets€the€requirements€for€exemption€pursuant€to€section€208(9)(k)€of€such€article;óóÐ Ä ` Ðòòà ° à(16)€a€qualified€settlement€fund€under€section€468B€of€the€Internal€Revenue€Code€or€an€entity€that€is€treatedÐ œ8  Ðas€such€for€federal€purposes€or€a€grantor€trust,€either€of€which€is€used€for€Nazi€reparations.óóÐ t  Ðà ° àSection€11.€€These€amendments€shall€take€effect€on€the€date€the€Notice€of€Adoption€regarding€suchÐ Lè  Ðamendments€is€published€in€the€òòState€Registeróó€except€the€amendments€relating€to€participation€in€a€trade€show€orÐ $À Ðshows€made€by€Section€5€which€added€paragraph€(7)€to€subdivision€(a)€of€section€1„3.3€of€the€Regulations€and€byÐ ü˜ ÐSection€9€which€added€clause€ð ð(Ô_ÔiÔ_Ô)ðð€to€subparagraph€(iv)€of€paragraph€(9)€of€subdivision€(b)€of€section€1„3.4€of€theÐ Ôp ÐRegulations€shall€apply€to€taxable€years€beginning€on€or€after€January€1,€2002.Ð ¬H ÐÓÓÌÌDated:€€Albany,€New€YorkÐ \ø Ðà ° à€January€22,€2004Ð Hä ÐÌÌÌà0 ° àà0°€%°€%àà0` €%€%àà ¸ àà  àà h àà À àà  à________________________________Ðø"”` €%` €% Ðà0 ° àà0°€%°€%àà0` €%€%àà ¸ àà  àà h àà À àà  àAndrew€S.€Ô_ÔEristoffÔ_ÔÐä#€ ` €%` €% Ðà0 ° àà0°€%°€%àà0` €%€%àà ¸ àà  àà h àà À àà  àCommissioner€of€Taxation€and€FinanceÐÐ$l!` €%` €% ÐÌÌÌ