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Instructions for Form NYC-1A - 2022 Page 4
meets any of the tests that was included in a com- l a banking corporation or bank holding of the tax liability of a corporation within New
bined return under the Banking Corporation Tax company that does not meet the 65% or York City, the Department of Finance will con-
for its most recent filing before January 1, 2011, more stock ownership requirement; sider transactions directly connected with the
may continue to be included in a combined return business conducted by the corporations, such as
for future years. However, once included in a l a banking corporation that must use
combined return for a tax year beginning on or weighted factors in determining its alloca- l performing services for other corporations
after January 1, 2011, such banking corporation tion percentage (see “Weighted Factor Al- in the group;
must continue to file in a combined return until location for Certain Banking Corporations,”
consent to file on a separate basis is received from below) can file a combined report only with l providing funds to other corporations in the
the Commissioner of Finance. other corporations subject to tax under the group; or
Banking Corporation Tax that qualify to use
A banking corporation required to file a New the same allocation percentage; and l performing related customer services using
York City tax return solely due by being a credit common facilities and employees.
card bank is required to be included in a com- l a captive REIT or RIC must not be in-
bined return with: cluded in a combined return or report under Service functions will not be considered when
the BCT or GCT if a banking corporation they are incidental to the business of the corpo-
(1) any banking corporation not subject to tax or bank holding company that directly or ration providing the services. Service functions
under the Banking Corporation Tax whose indirectly owns or controls over 50% of the include, but are not limited to, accounting, legal
voting stock is 65% or more owned or con- voting stock of the captive REIT or RIC and personnel services. It is not necessary to
trolled, directly or indirectly, by the bank- and is the closest controlling stockholder of have intercorporate transactions between each
ing corporation required to file; the captive REIT or RIC is a member of an member and every other member of the group.
affiliated group (1) that does not include It is, however, essential that each corporation
(2) any banking corporation or bank holding any corporation that is engaged in a busi- have intercorporate transactions with one other
company not subject to tax under the Bank- ness that a subsidiary of a bank holding combinable corporation or with the combined
ing Corporation Tax that owns or controls, company would not be permitted to be en- group of corporations.
directly or indirectly, 65% or more of the gaged in, unless the business is de min-
voting stock of the banking corporation re- imus, and (2) whose members own assets CHANGE IN COMPOSITION OF A
quired to file; or the combined average of which does not COMBINED GROUP
(3) any banking corporation not subject to tax exceed $8 billion. In that instance, the cap- If a banking corporation or bank holding com-
under the Banking Corporation Tax whose tive REIT or RIC is subject to the provi- pany has been required or permitted to file a
voting stock is 65% or more owned or con- sions of Ad. Code section 11-603.7 or combined return, the corporation must continue
trolled, directly or indirectly, by the same 11-603.8. The term affiliated group is de- to file a combined return until the facts affecting
corporation or corporations that own or fined in IRC section 1504 without regard its combined reporting status materially change.
control, directly or indirectly, 65% or more to the exceptions of 1504(b).
of the voting stock of the banking corpora- Provided all of the information required to be
tion required to file, if the corporation or (Note: Unlike the New York State Tax Law, the submitted on page 6 of the Form NYC-1A and
corporations in 1, 2, or 3 provide services Ad. Code does not presently prohibit a banking on the Combined Group Information Schedule
for, or support to, the operations of the corporation whose greatest tax, computed on a is submitted, a group of corporations meeting
banking corporation required to file unless separate basis, is on taxable assets and whose the requirements set forth above (WHO MAY
it is shown that the inclusion of the corpo- net worth ratio, computed on a separate basis, FILE FORM NYC-1A, B. CORPORATIONS
ration or corporations in 1, 2, or 3 fails to is less than five percent and whose total assets THAT MAY BE PERMITTED OR REQUIRED
properly reflect the tax liability of the cor- are comprised of 33% or more of mortgages, TO FILE A COMBINED RETURN ) is deemed
poration required to file. from filing a combined return.) to have tentative permission to file on a com-
bined basis, however, the combined filing is
Services for, or support to, include such activities D. ALIEN CORPORATIONS subject to revision or disallowance on audit.
as billing, credit investigation and reporting, mar- This return will not be considered complete un-
keting, research, advertising, mailing, customer For tax years beginning on or after January 1, less all of the information required is submitted.
service, information technology, lending and fi- 2015, this provision is no longer applicable be-
nancing services, and communications services, cause alien corporations cannot be Subchapter In general, each banking corporation or bank
but not accounting, legal, or personal services. S corporations and, therefore, these corporations holding company is a separate taxable entity and
are subject to the Business Corporation Tax. must file its own tax return; however, a group
C. CORPORATIONS THAT CANNOT BE INCLUDED IN of banking corporations and bank holding com-
A COMBINED RETURN l A banking corporation or bank holding panies may be permitted or required to file a
company organized under the laws of a
l a corporation which elected under Section combined return to properly reflect the tax lia-
country other than the United States may
11-640(d) of the Administrative Code to bility of such corporations under the Banking
not file a combined return with a banking
be taxed under Subchapter 2 of Chapter 6, Corporation Tax Law. In all cases where a com-
corporation or bank holding company or-
Title 11 of the Administrative Code (Gen- bined return is permitted or required, a com-
ganized under the laws of the U.S., New
eral Corporation Tax) for those years such bined tax return must be filed on Form
York State or any other state. An alien cor-
election is in effect; NYC-1A. In addition, a separate tax return
poration can only be included in a com- must be filed by each corporation in the com-
l a banking corporation or bank holding bined return with other alien corporations. bined group on Form NYC-1 and attached to
company whose accounting period differs Form NYC-1A.
from the accounting period adopted by the INTERCORPORATE TRANSACTIONS
combined group; In deciding whether there are intercorporate If the parent corporation is not included in the
transactions which cause the improper reflection
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