N.Y. Comp. Codes R. & Regs. tit. 20 § 45.13

Current through Register Vol. 46, No. 45, November 2, 2024

Section 45.13 - Interest, dividends and royalties

(a) The law provides that there shall be included in gross income "receipts from interest, dividends and royalties, derived from sources within this state other than such as are received from a corporation a majority of whose voting stock is owned by the taxpaying utility, without any deduction therefrom for any expenses whatsoever incurred in connection with the receipt thereof".

(b) Where the corporation paying the dividend or interest conducts all of its business within this State, no problem as to the source of the dividend or interest is presented. The entire amount of the dividend or interest received from such corporation is from a source within this State and required to be included in gross income. Where, however, the corporation paying the dividend or interest conducts its business both within and without the State, and has physical assets located both within and without the State, the proportion of the dividend or interest received, to be included in gross income, will be such portion thereof as the physical assets of the dividend or interest paying corporation within this State bears to all its physical assets, wherever located. However, the total amount of the dividend or interest should be reported and a deduction taken for the portion not allocated to this State.

Question 49:A utility, owning stock in the A corporation, receives dividends on such stock amounting to $20,000. All of the physical assets of the A corporation are within this State. Should the total amount of such dividends be included in its gross income? Answer: Yes.

Question 50:In the preceding question, if the A corporation conducts its business both within and without this State and only 50 per cent of its physical assets are within the State, is the entire amount of such dividends taxable? Answer: No. There should be included in gross income the sum of $20,000 and a deduction of $10,000 taken with the proper explanation.

Question 51:A utility owns 51 per cent of the voting stock of a corporation and receives dividends on such stock. Are such dividends or any part thereof taxable? Answer: No.

Question 52:A utility receives interest on bonds of the United States and of the State of New York. Is such interest taxable? Answer: No, interest received from bonds of the United States and of the States of New York is exempt.

Question 53:A utility receives interest on bonds of the Republic of France, the State of Massachusetts and the city of Chicago, Ill. Is such interest taxable? Answer: No, such interest is not from sources within this State.

(c) Royalties from lease of gas wells are required to be included in gross income subject to tax if the wells are located within this State.

Question 54:A gas company leases a gas well in New York to a Pennsylvania company on a royalty basis. Are such royalties to be included in gross income subject to tax? Answer: Yes.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 45.13