The New York State Department of Taxation and Finance has recently revised its draft Article 9-A nexus regulations. Corporate Tax Reform Draft Regulations: Corporations Subject to Tax (N.Y.S. Dep't of Taxation & Fin., amended Feb. 10, 2017). The revisions principally address foreign corporations that surrender their authority to do business, exceptions to corporate partner nexus, and the definition of "credit cards."
The revisions provide that a foreign corporation engaged in any one of the activities that would subject it to tax in New York State will be subject to tax even after it surrenders its authority to do business in New York State. While the previous draft of the regulations provided that a foreign corporation engaged in any one of the activities that would subject it to tax in New York State would be subject to tax regardless of whether it is authorized to do business in New York State, it did not specifically address corporations that surrendered their authority to do business.
The draft regulations were also revised to make clear that corporate general partners and corporate limited partners are subject to tax under Article 9-A unless the corporate partner is or would be subject to tax under Article 9 or 33. This revision is consistent with the provision in the draft nexus regulations pertaining to corporate members of limited liability companies, which provides that a corporate member of a limited liability company that is taxed as a partnership is not subject to tax under Article 9-A if it is or would be subject to tax under Article 9 or 33.
Finally, the regulations pertaining to nexus for corporations that issue credit cards in New York State were revised to include a cross-reference to the definition of "credit cards" contained in the draft apportionment regulations. The draft apportionment regulations define a "credit card" as including "credit, bank, travel and entertainment or pre-paid payment cards or products that can be presented at a physical point-of-sale terminal, electronically, or by telephone." Corporate tax reform draft regulations: Business Apportionment Factor (N.Y.S. Dep't of Taxation & Fin., amended Sept. 30, 2016).