State Codes and Statutes

Statutes > New-york > Tax > Article-9-a > 208

§ 208. Definitions. As used in this article: 1. The term "corporation"  includes  (a)  an  association  within the meaning of paragraph three of  subsection (a) of section seventy-seven  hundred  one  of  the  internal  revenue  code (including a limited liability company), (b) a joint-stock  company or association, (c) a publicly traded partnership treated  as  a  corporation  for  purposes  of  the  internal  revenue  code pursuant to  section  seventy-seven  hundred  four  thereof  and  (d)  any   business  conducted  by  a  trustee  or  trustees wherein interest or ownership is  evidenced by certificate or other written instrument. "DISC" and "former  DISC" mean any corporation which meets the  requirements  of  subsection  (a) of section nine hundred ninety-two of the internal revenue code;    1-A.  The  term  "New  York  S corporation" means, with respect to any  taxable year, a corporation subject to tax under this article for  which  an  election  is  in  effect  pursuant  to subsection (a) of section six  hundred sixty of this chapter for such year,  any  such  year  shall  be  denominated  a "New York S year", and such election shall be denominated  a "New York S election". The term "New York C corporation"  means,  with  respect  to  any  taxable  year, a corporation subject to tax under this  article which is not a New York S corporation, and any such  year  shall  be  denominated  a  "New York C year". The term "termination year" means  any taxable year of a corporation during which the New York  S  election  terminates  on  a day other than the first day of such year. The portion  of the  taxable  year  ending  before  the  first  day  for  which  such  termination  is  effective  shall be denominated the "S short year", and  the  portion  of  such  year  beginning  on  such  first  day  shall  be  denominated  the  "C short year". The term "New York S termination year"  means any termination year which is not also an S termination  year  for  federal purposes.    1-B.  The  term  "QSSS"  means  a  corporation  which  is  a qualified  subchapter S subsidiary as defined  in  subparagraph  (B)  of  paragraph  three  of  subsection  (b)  of section thirteen hundred sixty-one of the  internal revenue code. The term "exempt QSSS" means a QSSS  exempt  from  tax  under this article as provided in paragraph (k) of subdivision nine  of this section, or a QSSS described in subclause (i) of clause  (B)  of  subparagraph  two  of paragraph (k) of subdivision nine of this section,  wherein the parent corporation of the QSSS is subject to tax under  this  article,  and the assets, liabilities, income and deductions of the QSSS  are treated as the assets, liabilities, income  and  deductions  of  the  parent  corporation.  Where  a  QSSS  is  an  exempt  QSSS, then for all  purposes under this article:    (a) the assets, liabilities, income,  deductions,  property,  payroll,  receipts, capital, credits, and all other tax attributes and elements of  economic  activity of the QSSS shall be deemed to be those of the parent  corporation,    (b) the  stocks,  bonds  and  other  securities  issued  by,  and  any  indebtedness  from,  the  QSSS  shall  not  be subsidiary, investment or  business capital of the parent corporation,    (c)  transactions  between  the  parent  corporation  and  the   QSSS,  including the payment of interest and dividends, shall not be taken into  account, and    (d)  general  executive  officers  of  the  QSSS shall be deemed to be  general executive officers of the parent corporation.    2. The term "taxpayer" means any corporation subject to tax under this  article;    3. The term "subsidiary" means  a  corporation  of  which  over  fifty  percent  of  the number of shares of stock entitling the holders thereof  to vote for the election of  directors  or  trustees  is  owned  by  the  taxpayer;4.  The  term  "subsidiary  capital" means investments in the stock of  subsidiaries  and  any  indebtedness  from  subsidiaries,  exclusive  of  accounts receivable acquired in the ordinary course of trade or business  for  services  rendered or for sales of property held primarily for sale  to  customers,  whether or not evidenced by written instrument, on which  interest is not claimed and deducted by the subsidiary for  purposes  of  taxation  under  article  nine-A,  thirty-two  or  thirty-three  of this  chapter, provided, however, that, in the discretion of the commissioner,  there shall be deducted from subsidiary capital  any  liabilities  which  are directly or indirectly attributable to subsidiary capital.    5.  The  term  "investment capital" means investments in stocks, bonds  and other securities, corporate and governmental, not held for  sale  to  customers  in  the  regular  course of business, exclusive of subsidiary  capital and stock issued by the taxpayer, provided,  however,  that,  in  the  discretion  of  the  commissioner,  there  shall  be  deducted from  investment capital any liabilities  which  are  directly  or  indirectly  attributable   to   investment  capital;  and  provided,  further,  that  investment capital shall not include any  such  investments  the  income  from which is excluded from entire net income pursuant to the provisions  of  paragraph  (c-1)  of  subdivision  nine  of  this  section, and that  investment capital shall  be  computed  without  regard  to  liabilities  directly or indirectly attributable to such investments, but only if air  carriers  organized  in  the  United States and operating in the foreign  country or countries in  which  the  taxpayer  has  its  major  base  of  operations  and  in which it is organized, resident or headquartered (if  not in the same country as its major base of operations) are not subject  to any tax based on or measured  by  capital  imposed  by  such  foreign  country  or countries or any political subdivision thereof, or if taxed,  are provided an exemption, equivalent to that provided for herein,  from  any  tax based on or measured by capital imposed by such foreign country  or countries and from any such tax imposed by any political  subdivision  thereof;    6.  The term "investment income" means income, including capital gains  in excess of capital losses, from  investment  capital,  to  the  extent  included  in computing entire net income, less, (a) in the discretion of  the commissioner, any  deductions  allowable  in  computing  entire  net  income  which  are  directly  or  indirectly  attributable to investment  capital or investment income, and (b) such portion of any net  operating  loss  deduction  allowable  in  computing  entire  net  income,  as  the  investment income, before such deduction, bears to  entire  net  income,  before  such  deduction,  provided,  however,  that  in  no  case  shall  investment income exceed entire net income;    7. (a) The term  "business  capital"  means  all  assets,  other  than  subsidiary capital, investment capital and stock issued by the taxpayer,  less  liabilities  not  deducted  from  subsidiary or investment capital  except that cash on hand and on deposit shall be treated  as  investment  capital or as business capital as the taxpayer may elect.    (b)  Provided, however, "business capital" shall not include assets to  the extent employed for  the  purpose  of  generating  income  which  is  excluded  from entire net income pursuant to the provisions of paragraph  (c-1) of subdivision nine of this section and shall be computed  without  regard  to  liabilities  directly  or  indirectly  attributable  to such  assets, but only if air carriers organized  in  the  United  States  and  operating  in the foreign country or countries in which the taxpayer has  its major base of operations and in which it is organized,  resident  or  headquartered  (if  not  in  the  same  country  as  its  major  base of  operations) are not subject to any tax based on or measured  by  capital  imposed   by   such  foreign  country  or  countries  or  any  politicalsubdivision thereof, or if taxed, are provided an exemption,  equivalent  to  that  provided  for  herein,  from  any  tax based on or measured by  capital imposed by such foreign country or countries and from  any  such  tax imposed by any political subdivision thereof;    8. The term "business income" means entire net income minus investment  income;    8-A.  Provided, however, that with respect to a DISC or a former DISC,  the following provisions shall apply:    (a) investments in the stocks, bonds or other securities of a DISC  or  any  indebtedness  from a DISC shall not be treated as either subsidiary  capital or investment capital under subdivisions four or  five  of  this  section,    (b)  any amounts deemed distributed from a DISC or a former DISC which  are taxable as dividends pursuant to  subsection  (b)  of  section  nine  hundred  ninety-five  of  the  internal revenue code of nineteen hundred  fifty-four shall be treated as business income, except any such  amounts  from  a  former  DISC attributable to amounts includible in a taxpayer's  entire net income for a prior taxable year  under  subparagraph  (B)  of  paragraph (i) of subdivision nine of this section shall be excluded from  entire net income,    (c)  any  gain  recognized  for  federal  income  tax  purposes on the  disposition of  stock  in  a  DISC,  and  any  gain  recognized  on  the  disposition  of  stock in a former DISC, includible in gross income as a  dividend pursuant to subsection (c) of section nine hundred  ninety-five  of  the  internal  revenue code of nineteen hundred fifty-four, shall be  treated as business income, and    (d) except as provided in paragraph (i) of subdivision  nine  of  this  section,  any  actual distribution from a DISC or a former DISC shall be  treated as business income  except  an  actual  distribution  which  for  federal  income  tax  purposes is treated as made out of "other earnings  and profits" under section  nine  hundred  ninety-six  of  the  internal  revenue  code  of nineteen hundred fifty-four, in which case such actual  distribution shall be treated as either subsidiary income or  investment  income under this article.    8-B.  (a)  The term "minimum taxable income" shall mean the entire net  income of the taxpayer for the taxable year:    (1) increased by the amount of the federal items of tax preference set  forth in section fifty-seven of the  internal  revenue  code  (with  the  modifications  set  forth  in  paragraph (b) of this subdivision), which  items of tax preference shall have the same meaning and be  computed  in  the  same  manner  as  under section fifty-seven of the internal revenue  code,    (2) determined with the federal adjustments described in paragraph (c)  of this subdivision, which adjustments shall have the same  meaning  and  be  computed  in  the  same  manner  as  under  sections  fifty-six  and  fifty-eight of the internal revenue code,    (3) increased by the net operating loss  deduction  otherwise  allowed  under paragraph (f) of subdivision nine of this section, and    (4)  reduced,  for  taxable  years  beginning  after  nineteen hundred  ninety-three, by  the  alternative  net  operating  loss  deduction,  as  defined in paragraph (d) of this subdivision.    (b)  The federal items of tax preference referred to hereinabove shall  be  modified  by  deducting  "tax-exempt  interest"   and   "accelerated  depreciation  or  amortization  on  certain  property  placed in service  before January 1, 1987", as determined under paragraphs five  and  seven  of subsection (a) of section fifty-seven of the internal revenue code.    (c) The adjustments referred to hereinabove shall be:(1) "Depreciation" as determined under paragraph one of subsection (a)  of  section fifty-six of the internal revenue code. For purposes of this  subparagraph, the depreciation item  of  adjustment  provided  for  here  shall  not include any amount attributable to property for which the tax  benefits of the accelerated cost recovery system are not available under  this  article  by  reason  of  subparagraph  ten  of  paragraph  (b)  of  subdivision nine of this section;    (2) "Mining exploration and development  costs"  as  determined  under  paragraph  two  of  subsection  (a) of section fifty-six of the internal  revenue code;    (3) "Treatment of certain long-term  contracts"  as  determined  under  paragraph  three  of subsection (a) of section fifty-six of the internal  revenue code;    (4) "Installment  sales  of  certain  property"  as  determined  under  paragraph  six  of  subsection  (a) of section fifty-six of the internal  revenue code;    (5)  "Circulation  expenditures  of  personal  holding  companies"  as  determined  under subparagraph (C) of paragraph two of subsection (b) of  section fifty-six of the internal revenue code;    (6) "Merchant marine capital construction funds" as  determined  under  paragraph  two  of  subsection  (c) of section fifty-six of the internal  revenue code;    (7) "Disallowance  of  passive  activity  loss"  as  determined  under  subsection (b) of section fifty-eight of the internal revenue code; and    (8)  "Adjusted  basis", as it appears in paragraph seven of subsection  (a) of section fifty-six of  the  internal  revenue  code,  but  without  taking  into  account  the  references  therein  to  paragraph  five  of  subsection (a) of section fifty-six of the internal revenue code.    (d) The term "alternative net operating loss deduction" means the  net  operating  loss  deduction  allowed for the taxable year under paragraph  (f) of subdivision nine of this section, except as provided herein.    (1)(A) The net operating loss for any year  beginning  after  nineteen  hundred  eighty-nine  which  is  included  in determining such deduction  shall be determined with the adjustments provided in subparagraph two of  paragraph (a) of this subdivision, and shall be reduced by the items  of  tax  preference  determined  under  subparagraph one of paragraph (a) of  this subdivision, attributable to such year. An item of  tax  preference  shall  be  taken into account only to the extent such item increased the  amount of the net operating loss for the taxable  year  under  paragraph  (f) of subdivision nine of this section.    (B)  In  the  case  of  loss  years  beginning before nineteen hundred  ninety, the amount of the net operating loss which may be  carried  over  to  taxable  years beginning after nineteen hundred eighty-nine shall be  equal to an amount which may be carried from the loss year to the  first  taxable   year   of   the  taxpayer  beginning  after  nineteen  hundred  eighty-nine.    (2) In determining the amount of such  deduction,  loss  carryforwards  and  carrybacks shall, subject to the provisions of subparagraph five of  paragraph (f) of subdivision nine of this section, be  computed  in  the  manner  set  forth  in  paragraph  two  of subsection (b) of section one  hundred seventy-two of the internal revenue code, except that,  for  the  reference  therein  to  taxable  income,  there shall be substituted the  phrase "ninety percent of  minimum  taxable  income  determined  without  regard to the alternative net operating loss deduction".    (3)  The  amount  of such deduction shall not exceed ninety percent of  minimum taxable income determined  without  regard  to  such  deduction,  provided,   however,   the  term  "ninety  percent"  shall  be  read  as"forty-five percent" with respect to taxable years beginning in nineteen  hundred ninety-four.    (e)  The  tax  commission may, whenever necessary in order to properly  reflect the minimum taxable income of any taxpayer, determine  the  year  or  period  in  which any item of income or deduction shall be included,  without regard to the method of accounting employed by the taxpayer.    (f) If the period covered by a report under this article is other than  the  period  covered  by  the  report  to  the  United  States  treasury  department,  the  minimum taxable income shall be appropriately modified  pursuant to regulations promulgated by the tax commission.    9. The term "entire net  income"  means  total  net  income  from  all  sources, which shall be presumably the same as the entire taxable income  (but not alternative minimum taxable income),    (i)  which  the  taxpayer  is  required to report to the United States  treasury department, or    (ii) which the taxpayer would have been  required  to  report  to  the  United  States  treasury department if it had not made an election under  subchapter s of chapter one of the internal revenue code, or    (iii) which the taxpayer, in the case of a corporation which is exempt  from federal income tax (other than the tax on unrelated  business  tax-  able  income imposed under section 511 of the internal revenue code) but  which is subject to tax under this article, would have been required  to  report  to the United States treasury department but for such exemption,  except as hereinafter provided, and subject to any modification required  by paragraphs (d) and (e) of subdivision three of  section  two  hundred  ten of this article.    (a) Entire net income shall not include:    (1)  income,  gains  and  losses  from subsidiary capital which do not  include the amount of a recovery in respect of any war loss  except  for  such  amounts  from  a  former DISC which are treated as business income  under subdivision eight-A of this section,    (2) fifty percent of dividends (A) other than from  subsidiaries,  and  (B)  other  than  amounts  treated  as business income under subdivision  eight-A of this section,  on  shares  of  stock  which  conform  to  the  requirements  of  subsection (c) of section two hundred forty-six of the  internal revenue code.    (3) bona fide gifts,    (4) income and deductions with respect to amounts received from school  districts and from corporations and associations, organized and operated  exclusively for religious, charitable or educational purposes,  no  part  of  the  net  earnings  of  which  inures  to the benefit of any private  shareholder or individual, for the operation of school buses,    (5) (i) any refund or credit of a  tax  imposed  under  this  article,  article  twenty-three,  or article thirty-two of this chapter, for which  tax no exclusion or deduction was allowed in determining the  taxpayer's  entire  net  income under this article, article twenty-three, or article  thirty-two of this chapter for any prior year, (ii) a refund  or  credit  of  general  corporation  tax  allowed  by subdivision eleven of section  11-604 of the administrative code of the city of New York, or (iii)  any  refund   or   credit  of  a  tax  imposed  under  sections  one  hundred  eighty-three, one hundred eighty-three-a, one hundred eighty-four or one  hundred eighty-four-a of this chapter, and    (6) any amount treated as dividends pursuant to section  seventy-eight  of  the  internal  revenue  code  and  not  otherwise  deductible  under  subparagraphs one and two of this paragraph;    (7) that portion of wages  and  salaries  paid  or  incurred  for  the  taxable  year  for  which  a  deduction  is  not allowed pursuant to the  provisions of section two hundred eighty-C of the internal revenue code.(8) in the case of a taxpayer who is separately or as a partner  of  a  partnership  doing  an  insurance  business  as a member of the New York  insurance exchange described in section six thousand two hundred one  of  the  insurance  law, any item of income, gain, loss or deduction of such  business  which  is  the  taxpayer's  distributive or pro rata share for  federal income tax purposes or which the taxpayer is  required  to  take  into account separately for federal income tax purposes.    (9)  for taxable years beginning after December thirty-first, nineteen  hundred eighty-one, except with respect to property which is a qualified  mass commuting vehicle described in subparagraph (D) of paragraph  eight  of  subsection  (f)  of  section one hundred sixty-eight of the internal  revenue  code  (relating  to  qualified  mass  commuting  vehicles)  and  property  of  a  taxpayer principally engaged in the conduct of aviation  (other than air freight forwarders acting as principal and like indirect  air carriers) which is placed in service before taxable years  beginning  in  nineteen  hundred  eighty-nine,  any amount which is included in the  taxpayer's federal taxable income solely as a result of an election made  pursuant to the provisions of such paragraph eight as it was  in  effect  for  agreements  entered  into  prior to January first, nineteen hundred  eighty-four;    (10) for taxable years beginning after December thirty-first, nineteen  hundred eighty-one, except with respect to property which is a qualified  mass commuting vehicle described in subparagraph (D) of paragraph  eight  of  subsection  (f)  of  section one hundred sixty-eight of the internal  revenue  code  (relating  to  qualified  mass  commuting  vehicles)  and  property  of  a  taxpayer principally engaged in the conduct of aviation  (other than air freight forwarders acting as principal and like indirect  air carriers) which is placed in service before taxable years  beginning  in  nineteen  hundred  eighty-nine,  any amount which the taxpayer could  have excluded from federal taxable income had it not made  the  election  provided  for in such paragraph eight as it was in effect for agreements  entered into prior to January first, nineteen hundred eighty-four;    (11)  the  amount  deductible  pursuant  to  paragraph  (j)  of   this  subdivision; and    (12)  upon  the disposition of property to which paragraph (j) of this  subdivision applies, the amount, if any, by which the aggregate  of  the  amounts   described  in  subparagraph  ten  of  paragraph  (b)  of  this  subdivision attributable to such property exceeds the aggregate  of  the  amounts  described  in paragraph (j) of this subdivision attributable to  such property; and    (13) if the added tax provided for in either  (i)  former  subdivision  two  of section one hundred eighty-two of this chapter (relating to real  estate corporations) or (ii) former subdivision  one-a  of  section  two  hundred  nine of this chapter (relating to real estate corporations) has  been imposed upon the taxpayer,  any  income  which  has  been  used  in  computing such tax.    (14)   The  amount  deductible  pursuant  to  paragraph  (l)  of  this  subsection.    (15) In the case of an  attorney-in-fact,  with  respect  to  which  a  mutual  insurance  company,  which  is  an  interinsurer or a reciprocal  insurer and is subject to tax under subdivision (a) of  section  fifteen  hundred  ten  of  this chapter, has made the election provided for under  section eight hundred thirty-five  of  the  Internal  Revenue  Code,  an  amount  equal  to the excess, if any, of the amounts paid or incurred by  such interinsurer or reciprocal insurer  in  the  taxable  year  to  the  attorney-in-fact  over  the  deduction  allowed  to such interinsurer or  reciprocal insurer with respect to  amounts  paid  or  incurred  in  thetaxable  year  to  the  attorney-in-fact  under  subsection  (b) of such  section eight hundred thirty-five of the Internal Revenue Code.    (16) In the case of a taxpayer subject to the modification provided by  subparagraph  sixteen  of  paragraph (b) of this subdivision, the amount  required to be recaptured pursuant to subsection (d) of section  179  of  the  internal  revenue  code  with  respect  to property upon which such  modification was based.    (17) for taxable years  beginning  after  December  thirty-first,  two  thousand  two,  the  amount deductible pursuant to paragraph (o) of this  subdivision.    (b) Entire net income  shall  be  determined  without  the  exclusion,  deduction or credit of:    (1)  the amount of any specific exemption or credit allowed in any law  of the United States imposing any tax on or measured by  the  income  of  corporations,    (2)  any  part of any income from dividends or interest on any kind of  stock, securities or indebtedness, except as provided in clauses (1) and  (2) of paragraph (a) hereof,    (3) taxes on or measured by profits or income paid or accrued  to  the  United  States,  any  of  its  possessions  or  to  any foreign country,  including taxes  in  lieu  of  any  of  the  foregoing  taxes  otherwise  generally  imposed  by  any  foreign country or by any possession of the  United States,    (3-a) taxes on or measured by profits  or  income,  or  which  include  profits  or  income  as a measure, paid or accrued to any other state of  the United States, or any  political  subdivision  thereof,  or  to  the  District  of  Columbia,  including taxes expressly in lieu of any of the  foregoing taxes otherwise generally imposed by any other  state  of  the  United  States, or any political subdivision thereof, or the District of  Columbia;    (4) taxes imposed  under  this  article  and  article  thirty-two  and  sections  one  hundred  eighty-three,  one  hundred  eighty-three-a, one  hundred eighty-four and one hundred eighty-four-a of this chapter,    (4-a)(A) the entire amount allowable as an exclusion or deduction  for  stock  transfer  taxes  imposed  by  article  twelve  of this chapter in  determining the entire taxable income which the taxpayer is required  to  report  to  the United States treasury department but only to the extent  that such taxes are incurred and paid in market making transactions, (B)  in those instances where a credit for the  special  additional  mortgage  recording  tax  credit  is  allowed  under  paragraph (a) of subdivision  seventeen of section two hundred ten of this article, the amount allowed  as an  exclusion  or  deduction  for  the  special  additional  mortgage  recording  tax  imposed  by  subdivision  one-a  of  section two hundred  fifty-three of this chapter in determining  the  entire  taxable  income  which  the  taxpayer is required to report to the United States treasury  department, and (C) unless the credit allowed  pursuant  to  subdivision  seventeen of section two hundred ten of this article is reflected in the  computation  of  the gain or loss so as to result in an increase in such  gain or decrease of such loss, for federal income tax purposes, from the  sale or other disposition of the property  with  respect  to  which  the  special   additional   mortgage   recording   tax  imposed  pursuant  to  subdivision one-a of section two hundred fifty-three of this chapter was  paid, the amount  of  the  special  additional  mortgage  recording  tax  imposed  by subdivision one-a of section two hundred fifty-three of this  chapter which was paid and which is reflected in the computation of  the  basis  of  the  property  so  as to result in a decrease in such gain or  increase in such loss for federal income tax purposes from the  sale  orother  disposition  of  the  property with respect to which such tax was  paid.    (6)  in  the  discretion of the tax commission, any amount of interest  directly or indirectly and  any  other  amount  directly  or  indirectly  attributable  as a carrying charge or otherwise to subsidiary capital or  to income, gains or losses from subsidiary capital.    (7) in the case of a taxpayer who is separately or as a partner  of  a  partnership  doing  an  insurance  business  as a member of the New York  insurance exchange described in section six thousand two hundred one  of  the insurance law, such taxpayer's distributive or pro rata share of the  allocated  entire  net  income  of  such  business  as  determined under  sections fifteen hundred three and fifteen hundred four of this chapter,  provided however, in the event such allocated entire  net  income  is  a  loss,  such taxpayer's distributive or pro rata share of such loss shall  not be subtracted from federal taxable income in  computing  entire  net  income under this subdivision.    (8)  for taxable years beginning after December thirty-first, nineteen  hundred eighty-one, except with respect to property which is a qualified  mass commuting vehicle described in subparagraph (D) of paragraph  eight  of  subsection  (f)  of  section one hundred sixty-eight of the internal  revenue  code  (relating  to  qualified  mass  commuting  vehicles)  and  property  of  a  taxpayer principally engaged in the conduct of aviation  (other than air freight forwarders acting as principal and like indirect  air carriers) which is placed in service before taxable years  beginning  in  nineteen  hundred eighty-nine, any amount which the taxpayer claimed  as a deduction in computing its  federal  taxable  income  solely  as  a  result  of an election made pursuant to the provisions of such paragraph  eight as it was in effect for agreements entered into prior  to  January  first, nineteen hundred eighty-four;    (9)  for taxable years beginning after December thirty-first, nineteen  hundred eighty-one, except with respect to property which is a qualified  mass commuting vehicle described in subparagraph (D) of paragraph  eight  of  subsection  (f)  of  section one hundred sixty-eight of the internal  revenue  code  (relating  to  qualified  mass  commuting  vehicles)  and  property  of  a  taxpayer principally engaged in the conduct of aviation  (other than air freight forwarders acting as principal and like indirect  air carriers) which is placed in service before taxable years  beginning  in  nineteen  hundred  eighty-nine,  any amount which the taxpayer would  have been required to include in the computation of its federal  taxable  income had it not made the election permitted pursuant to such paragraph  eight  as  it was in effect for agreements entered into prior to January  first, nineteen hundred eighty-four;    (10) in the case of  property  placed  in  service  in  taxable  years  beginning   before  nineteen  hundred  ninety-four,  for  taxable  years  beginning after  December  thirty-first,  nineteen  hundred  eighty-one,  except with respect to property subject to the provisions of section two  hundred  eighty-F  of the internal revenue code, property subject to the  provisions of section one hundred sixty-eight of  the  internal  revenue  code which is placed in service in this state in taxable years beginning  after  December  thirty-first, nineteen hundred eighty-four and property  of a taxpayer principally engaged in the conduct of aviation (other than  air freight  forwarders  acting  as  principal  and  like  indirect  air  carriers)  which  is placed in service before taxable years beginning in  nineteen  hundred  eight-nine,  the  amount  allowable  as  a  deduction  determined under section one hundred sixty-eight of the internal revenue  code;    (11)  upon  the disposition of property to which paragraph (j) of this  subdivision applies, the amount, if any, by which the aggregate  of  theamounts  described  in  such paragraph (j) attributable to such property  exceeds the aggregate of the amounts described in  subparagraph  ten  of  this paragraph attributable to such property.    (15)  Real  property taxes paid on qualified agricultural property and  deducted in determining federal taxable income, to  the  extent  of  the  amount of the agricultural property tax credit allowed under subdivision  twenty-two of section two hundred ten of this article.    (16)  In  the  case  of  a taxpayer which is not an eligible farmer as  defined in paragraph  (b)  of  subdivision  twenty-two  of  section  two  hundred  ten  of  this  article,  the  amount  of  any deduction claimed  pursuant to section 179 of the internal revenue code with respect  to  a  sport  utility vehicle which is not a passenger automobile as defined in  paragraph 5 of subsection (d) of section 280F of  the  internal  revenue  code.    (17)  for  taxable  years  beginning  after December thirty-first, two  thousand two, in the case of qualified property described  in  paragraph  two  of  subsection k of section 168 of the internal revenue code, other  than qualified resurgence zone property described in  paragraph  (q)  of  this  subdivision,  and  other  than  qualified  New  York  Liberty Zone  property described in paragraph two of subsection b of section 1400L  of  the  internal revenue code (without regard to clause (i) of subparagraph  (C) of such paragraph), which was placed in service  on  or  after  June  first,  two  thousand  three,  the amount allowable as a deduction under  section 167 of the internal revenue code.    (18) Premiums paid for environmental remediation insurance, as defined  in section twenty-three of this chapter,  and  deducted  in  determining  federal taxable income, to the extent of the amount of the environmental  remediation insurance credit allowed under such section twenty-three and  subdivision thirty-five of section two hundred ten of this article.    (19)  The  amount  of  any  deduction  allowed pursuant to section one  hundred ninety-nine of the internal revenue code.    (20) The amount of any  federal  deduction  for  taxes  imposed  under  article twenty-three of this chapter.    (c)  Entire  net  income  shall  include income within and without the  United States;    (c-1)(1) Notwithstanding any other provision of this article,  in  the  case  of a taxpayer which is a foreign air carrier holding a foreign air  carrier permit issued by the United States department of  transportation  pursuant  to  section  four  hundred  two of the federal aviation act of  nineteen hundred fifty-eight, as amended, and which is  qualified  under  subparagraph two of this paragraph, entire net income shall not include,  and  shall  be  computed  without  the deduction of, amounts directly or  indirectly  attributable  to,  (i)   any   income   derived   from   the  international  operation  of aircraft as described in and subject to the  provisions of section eight hundred eighty-three of the internal revenue  code, (ii) income without the United States which is  derived  from  the  operation  of aircraft, and (iii) income without the United States which  is of a type described in  subdivision  (a)  of  section  eight  hundred  eighty-one  of  the internal revenue code except that it is derived from  sources without the United  States.  Entire  net  income  shall  include  income  described in clauses (i), (ii) and (iii) of this subparagraph in  the case of taxpayers not described in the previous sentence.    (2) A taxpayer is qualified under this subparagraph  if  air  carriers  organized  in  the United States and operating in the foreign country or  countries in which the taxpayer has its major base of operations and  in  which  it  is  organized,  resident or headquartered (if not in the same  country as its major base of operations) are not subject to  any  income  tax  or  other tax based on or measured by income or receipts imposed bysuch foreign country or countries or any political subdivision  thereof,  or  if  so  subject to such tax, are provided an exemption from such tax  equivalent to that provided for herein.    (c-2)  Adjustments by qualified public utilities. (1) In the case of a  taxpayer which is a qualified public utility, entire net income shall be  computed with the adjustments set forth in this paragraph.    (2) Definitions. (A) Qualified public  utility.  The  term  "qualified  public  utility"  means  a taxpayer which: (i) on December thirty-first,  nineteen hundred ninety-nine, was subject to the ratemaking  supervision  of  the state department of public service, and (ii) for the year ending  on December thirty-first, nineteen hundred ninety-nine, was  subject  to  tax under former section one hundred eighty-six of this chapter.    (B) Transition property. The term "transition property" means property  placed  in  service  by the taxpayer before January first, two thousand,  for which a depreciation deduction is allowed under section one  hundred  sixty-seven of the internal revenue code.    (3)  Federal  depreciation  disallowed.  With  respect  to  transition  property, the deduction for federal income tax purposes for depreciation  shall not be allowed.    (4) New York depreciation. With  respect  to  transition  property,  a  deduction  shall  be  allowed  for the depreciation expense shown on the  books and records of the taxpayer for the taxable year and determined in  accordance with generally accepted accounting principles.    (5) Regulatory assets.  A  deduction  shall  be  allowed  for  amounts  recognized  as  expense on the books and records of the taxpayer for the  taxable year, which amounts  were  recognized  as  expense  for  federal  income  tax  purposes  in  a  taxable  year ending on or before December  thirty-first, nineteen hundred  ninety-nine,  where:  (A)  such  amounts  represent  expenditures  which,  when  made,  were charged to a deferred  debit account or similar asset account on the books and records  of  the  taxpayer,  and  where  (B)  the  recognition of expense on the books and  records of the taxpayer is matched by revenue stemming from a  procedure  or  adjustment allowing the recovery of such expenditures, and where (C)  such revenue is recognized  for  federal  income  tax  purposes  in  the  taxable year.    (6)  Basis for gain or loss. (A) Recognition transactions. (i) General  rule - book basis. Except as provided in subclause (ii) of this  clause,  where  transition  property  is  sold  or  otherwise  disposed of in the  taxable year in a transaction of the type requiring recognition of  gain  or  loss  for federal income tax purposes, the basis for determining the  amount of such gain or loss under this article shall be the cost of  the  property less the accumulated depreciation on the property determined on  the  books  and  records  of  the  taxpayer in accordance with generally  accepted accounting principles.    (ii) Qualified gain - New York basis.  Where  a  sale  or  disposition  described in subclause (i) of this clause results in recognition of gain  for  federal  income tax purposes, and where either (I) such recognition  occurs in a taxable year ending after nineteen hundred  ninety-nine  and  before  two  thousand ten, or (II) such recognition is with respect to a  nuclear electric generating facility,  the  basis  for  determining  the  amount of such gain under this article shall be the cost of the property  less  the  aggregate  of  the  New  York  depreciation deductions on the  property determined under subparagraph four of this paragraph.    (iii) No conversion of gain to loss.  In  the  event  that  the  basis  determined  under subclause (ii) of this clause results in determination  of a loss on the sale or disposition of the property, no  gain  or  loss  shall  be  recognized  under  this  article with respect to such sale or  disposition.(B)  Nonrecognition  transactions.  (i)  Carryover  basis.  (I)  where  transition  property  is  disposed  of  ("original  disposition")  in  a  transaction of a type requiring deferral of recognition of gain or  loss  for  federal  income  tax purposes, and where (II) there is a subsequent  recognition  of  gain or loss for federal income tax purposes ("clause B  gain or loss"), the amount of which is determined by reference, in whole  or in part, to  the  basis  of  such  transition  property  ("underlying  transition  property"),  then  (III) the amount of such clause B gain or  loss under this article shall be adjusted as provided in subclause  (ii)  or (iii) of this clause.    (ii)  General  rule  -  book  basis  adjustment. Except as provided in  subclause (iii) of this clause, the amount of clause  B  gain  shall  be  reduced,  or  the  amount  of  clause B loss increased, by the amount by  which the book basis of the underlying transition property on  the  date  of  original  disposition  (determined using the provisions of subclause  (i) of clause (A) of this subparagraph) exceeds the federal  income  tax  basis of such property on such date.    (iii)  Qualified gain - New York basis adjustment. Where clause B gain  either (I) occurs in  a  taxable  year  ending  after  nineteen  hundred  ninety-nine  and  before  two thousand ten, or (II) is with respect to a  nuclear electric generating facility, the amount of such gain under this  article shall be reduced, but not below zero, by the amount by which the  New York basis of the underlying transition  property  on  the  date  of  original  disposition (determined using the provisions of subclause (ii)  of clause (A) of this subparagraph) exceeds the federal income tax basis  of such property on such date.    (iv) Application to replacement  property  and  transferee  taxpayers.  This  clause  shall apply whether the clause B gain or loss: (I) is with  respect to either transition property or depreciable property the  basis  of  which  is determined by reference to transition property, or (II) is  recognized by either a qualified public utility or by a  taxpayer  which  is  a  transferee of transition property (whether or not such transferee  is a qualified public utility, notwithstanding subparagraph one of  this  paragraph).    (c-3)  Depreciation  adjustments  by  qualified  power  producers  and  pipeline companies. (1) In the case of a qualified taxpayer, entire  net  income  shall be computed with the depreciation adjustments set forth in  this paragraph.    (2) Definitions. (A) Qualified taxpayer. The term "qualified taxpayer"  means a qualified power producer or a qualified pipeline.    (B) Qualified power producer.  The  term  "qualified  power  producer"  means  a  taxpayer which: (i) on December thirty-first, nineteen hundred  ninety-nine, was not subject to the ratemaking supervision of the  state  department  of  public service, and (ii) for the year ending on December  thirty-first, nineteen hundred ninety-nine, was  subject  to  tax  under  former  section one hundred eighty-six of this chapter on account of its  being principally engaged in the business of supplying electricity.    (C) Qualified pipeline. The term "qualified pipeline" means a taxpayer  which: (i) on December thirty-first, nineteen hundred  ninety-nine,  was  subject  to  the  ratemaking  supervision  of  either the federal energy  regulatory commission or the state department  of  public  service,  and  (ii)  for  the  year  ending  on December thirty-first, nineteen hundred  ninety-nine, was subject to tax under sections one hundred  eighty-three  and  one  hundred  eighty-four  of  this chapter on account of its being  principally engaged in the business of pipeline transmission.    (D) Transition property. The term "transition property" means property  placed in service by a qualified  taxpayer  before  January  first,  twothousand,  for  which  a depreciation deduction is allowed under section  one hundred sixty-seven of the internal revenue code.    (3)  Federal  depreciation  disallowed.  With  respect  to  transition  property, the deduction for federal income tax purposes for depreciation  shall not be allowed.    (4) New York depreciation. With  respect  to  transition  property,  a  deduction  shall  be  allowed  for  the depreciation expense computed as  provided in this subparagraph. (A) All transition property shown on  the  books  and  records of the taxpayer on January first, two thousand shall  be treated as a single asset placed in service on  such  date.  The  New  York  basis for purposes of computing the depreciation deduction on such  single asset shall be the net book value  of  such  transition  property  determined  on  the  first day of the federal taxable year ending in two  thousand (or on the date any such property  is  placed  in  service,  if  later) adjusted as provided in clause (B) of this subparagraph.    (B)  If  transition property is sold or otherwise disposed of, the New  York basis of the single asset shall be reduced on the date of such sale  or disposition by the amount of the adjusted federal tax basis  of  such  property on such date.    (C)  The  New York depreciation deduction allowed for any taxable year  with  respect  to  such  single  asset  shall  be  computed  using   the  straight-line method, a twenty-year life, and a salvage value of zero.    (D) For purposes of this subparagraph, the term "net book value" means  cost  reduced by accumulated depreciation shown on the books and records  of the taxpayer and  determined,  in  the  case  of  a  qualified  power  producer,  in  accordance with generally accepted accounting principles;  and in the  case  of  a  qualified  pipeline,  in  accordance  with  the  taxpayer's  regulatory  reports filed with the federal energy regulatory  commission or state department of public service.    (d) The tax commission may, whenever necessary in  order  properly  to  reflect  the  entire  net  income of any taxpayer, determine the year or  period in which any item of  income  or  deduction  shall  be  included,  without regard to the method of accounting employed by the taxpayer;    (e)  The  entire net income of any bridge commission created by act of  congress to construct a bridge across an  international  boundary  means  its  gross  income  less  the  expense  of maintaining and operating its  properties, the annual interest upon its bonds  and  other  obligations,  and the annual charge for the retirement of such bonds or obligations at  maturity;    (f)  A  net  operating  loss deduction shall be allowed which shall be  presumably the same as the net operating loss  deduction  allowed  under  section  one  hundred seventy-two of the internal revenue code, or which  would have been allowed if the taxpayer had not made an  election  under  subchapter s of chapter one of the internal revenue code, except that in  every instance where such deduction is allowed under this article:    (1)  any  net  operating  loss  included in determining such deduction  shall be adjusted to reflect the inclusions and exclusions  from  entire  net income required by paragraphs (a), (b) and (g) hereof,    (2)  such deduction shall not include any net operating loss sustained  during any taxable year  beginning  prior  to  January  first,  nineteen  hundred  sixty-one, or during any taxable year in which the taxpayer was  not subject to the tax imposed by this article,    (3) such deduction shall not exceed the deduction for the taxable year  allowed under section one hundred seventy-two of  the  internal  revenue  code,  or  the  deduction  for  the  taxable  year which would have been  allowed if the taxpayer had not made an election under subchapter  s  of  chapter one of the internal revenue code,(4)  in the case of a New York S corporation, such deduction shall not  include any net operating loss sustained during a New  York  C  year  or  during a New York S year beginning prior to nineteen hundred ninety, and  in  the  case  of  a  New  York  C corporation, such deduction shall not  include  any  net  operating  loss  sustained  during a New York S year,  provided, however, a New York S year shall be treated as a taxable  year  for  purposes  of determining the number of taxable years to which a net  operating loss may be carried back or carried forward, and    (5) the net operating loss deduction allowed under section one hundred  seventy-two of the internal revenue code  shall  for  purposes  of  this  paragraph  be  determined  as  if  the  taxpayer  had elected under such  section to relinquish the entire carryback period with  respect  to  net  operating  losses, except with respect to the first ten thousand dollars  of each of such losses, sustained during taxable years ending after June  thirtieth, nineteen hundred eighty-nine.    (g) For taxable years commencing  prior  to  January  first,  nineteen  hundred eighty-seven, at the election of the taxpayer, a deduction shall  be allowed for expenditures paid or incurred during the taxable year for  the  construction,  reconstruction,  erection  or  improvement of either  industrial  waste  treatment  facilities  or   air   pollution   control  facilities,  or,  with  respect  to  taxable years beginning on or after  January first, nineteen hundred seventy-seven and before January  first,  nineteen  hundred  eighty-one,  industrial  waste  treatment  controlled  process facilities or air pollution controlled process facilities.    (1) (A) (1) The term "industrial  waste  treatment  facilities"  shall  mean  facilities  for  the treatment, neutralization or stabilization of  industrial waste and other wastes (as the terms "industrial  waste"  and  "other  wastes"  are  defined  in  section  17-0105 of the environmental  conservation law) from a point immediately preceding the point  of  such  treatment,  neutralization  or  stabilization  to the point of disposal,  including the necessary pumping and transmitting facilities.    (2) The term "industrial waste treatment controlled process  facility"  shall mean such portion of the cost of an industrial production facility  designed  for  the  purpose  of  obviating the need for industrial waste  treatment facilities as defined in item one  of  this  clause  as  shall  exceed the cost of an industrial production facility of equal production  capacity  which  if constructed would require industrial waste treatment  facilities to meet emission standards in compliance with the  provisions  of the environmental conservation law and the codes, rules, regulations,  permits  or orders issued pursuant thereto but only to the extent of the  cost of such industrial waste treatment facilities.    (B) (1)  The  term  "air  pollution  control  facilities"  shall  mean  facilities which remove, reduce, or render less noxious air contaminants  emitted from an air contamination source (as the terms "air contaminant"  and  "air  contamination  source"  are defined in section 19-0107 of the  environmental conservation law) from a point immediately  preceding  the  point  of such removal, reduction or rendering to the point of discharge  of air, meeting emission standards as established by the  department  of  environmental  conservation, but excluding such facilities installed for  the primary purpose of salvaging  materials  which  are  usable  in  the  manufacturing  process  or are marketable and excluding those facilities  which rely for their efficacy on dilution, dispersion or assimilation of  air contaminants in the ambient air  after  emission.  Such  term  shall  further  include flue gas desulfurization equipment and attendant sludge  disposal facilities, fluidized bed boilers, precombustion coal  cleaning  facilities  or  other  facilities that conform with this subdivision and  which comply with the provisions of the state  acid  deposition  controlact  set  forth  in  title nine of article nineteen of the environmental  conservation law.    (2)  The  term  "air pollution controlled process facility" shall mean  such portion of the cost of an industrial production  facility  designed  for  the  purpose  of  obviating  the  need  for  air  pollution control  facilities as defined in item one of this clause  as  shall  exceed  the  cost  of  an industrial production facility of equal productive capacity  which if constructed would require air pollution control  facilities  to  inert  emission  standards  as  established  pursuant  to title three of  article nineteen of the environmental conservation law but only  to  the  extent of the cost of such air pollution control facilities.    (2) However, such deduction shall be allowed only    (A)  with  respect to tangible property which is depreciable, pursuant  to section one hundred sixty-seven of the internal revenue code,  having  a  situs in this state and used in the taxpayer's trade or business, the  construction, reconstruction, erection or improvement of which,  in  the  case  of industrial waste treatment facilities, is initiated on or after  January first, nineteen hundred sixty-five or which, in the case of  air  pollution  control  facilities,  is initiated on or after January first,  nineteen hundred sixty-six, or which in the  case  of  industrial  waste  treatment  controlled  process  facilities  or  air pollution controlled  process facilities is initiated on and  after  January  first,  nineteen  hundred seventy-seven, and    (B) on condition that such facilities have been certified by the state  commissioner   of   environmental   conservation   or   his   designated  representative,  pursuant  to  section  19-0309  of  the   environmental  conservation  law,  as  complying  with  applicable  provisions  of  the  environmental  conservation  law,  the  public  health  law,  the  state  sanitary  code  and  codes, rules, regulations, permits or orders issued  pursuant thereto, and    (C) on condition that entire net income for the taxable year  and  all  succeeding  taxable  years  be  computed without any deductions for such  expenditures or for depreciation or amortization of  the  same  property  other  than  the deductions allowed by this paragraph (g), except to the  extent that the basis of the property may  be  attributable  to  factors  other  than  such  expenditures,  or  in  case  a deduction is allowable  pursuant to this paragraph for only a  part  of  such  expenditures,  on  condition that any deduction allowed for federal income tax purposes for  such  expenditures  or  for  depreciation  or  amortization  of the same  property be proportionately reduced in computing entire net  income  for  the taxable year and all succeeding taxable years, and    (D)  where  the  election provided for in paragraph (d) of subdivision  three of section two hundred ten of this chapter has not been  exercised  in respect to the same property.    (3)  (A)  If  expenditures in respect to an industrial waste treatment  facility,  an  air  pollution  control  facility,  an  industrial  waste  treatment  controlled  process  facility  or an air pollution controlled  process facility have been deducted as provided herein and if within ten  years from the end of the taxable  year  in  which  such  deduction  was  allowed  such  property  or  any  part  thereof  is used for the primary  purpose of salvaging materials which are  usable  in  the  manufacturing  process  or are marketable, the taxpayer shall report such change of use  in its report for the first taxable year during which it occurs, and the  tax commission may recompute the tax for the year  or  years  for  which  such  deduction was allowed and any carryback or carryover year, and may  assess any additional tax resulting from such recomputation  within  the  time  fixed  by  paragraph nine of subsection (c) of section ten hundred  eighty-three of this chapter.(B) If a deduction is allowed as herein provided for expenditures paid  or incurred during  any  taxable  year  on  the  basis  of  a  temporary  certificate   of   compliance   issued  pursuant  to  the  environmental  conservation law and  if  the  taxpayer  fails  to  obtain  a  permanent  certificate of compliance upon completion of the facilities with respect  to  which  such  temporary  certificate  was  issued, the taxpayer shall  report such failure in its report for the taxable year during which such  facilities are completed, and the tax commission may recompute  the  tax  for  the  year  or  years  for  which such deduction was allowed and any  carryback or carryover year, and may assess any additional tax resulting  from in such recomputation within the time fixed by  paragraph  nine  of  subsection (c) of section ten hundred eighty-three.    (C) If a deduction is allowed as herein provided for expenditures paid  or  incurred  during  any  taxable  year  in respect to an air pollution  control facility on the basis of  a  certificate  of  compliance  issued  pursuant  to  the  environmental conservation law and the certificate is  revoked  pursuant  to  subdivision  three  of  section  19-0309  of  the  environmental conservation law, the tax commission may recompute the tax  for  the  year  or  years  for  which  the facility is not or was not in  compliance  with  the  applicable  provisions   of   the   environmental  conservation  law, the state sanitary code or codes, rules, regulations,  permits  or  orders  promulgated  pursuant  thereto,  and  for  which  a  deduction was allowed, as well as for any carryback or carryover year to  which  such  deduction  was  carried,  and may assess any additional tax  resulting from such recomputation within the  time  fixed  by  paragraph  nine of subsection (c) of section ten hundred eighty-three.    (4)  In  any  taxable year when property is sold or otherwise disposed  of, with respect to which a deduction has been allowed pursuant to  this  paragraph,  such  deduction  shall  be  disregarded in computing gain or  loss, and the gain or loss on the sale  or  other  disposition  of  such  property  shall  be  the  gain  or loss entering into the computation of  entire taxable income which the taxpayer is required to  report  to  the  United States treasury department for such taxable year.    (h) If the period covered by a report under this article is other than  the  period  covered  by  the  report  to  the  United  States  treasury  department,    (1) except as provided in subparagraph two hereof, entire  net  income  shall  be  determined by multiplying the taxable income reported to such  department (as adjusted pursuant to the provisions of this  article)  by  the  number  of  calendar  months  or major parts thereof covered by the  report under this article and dividing by the number of calendar  months  or  major  parts thereof covered by the report to such department. If it  shall appear that such method of determining entire net income does  not  properly  reflect the taxpayer's income during the period covered by the  report under this article, the tax commission shall be authorized in its  discretion to determine such entire net income solely on  the  basis  of  the taxpayer's income during the period covered by its report under this  article;    (2)  in the case of a New York S termination year, an equal portion of  entire net income shall be assigned  to  each  day  of  such  year.  The  portion  of  such entire net income thereby assigned to the S short year  and the C short year shall be included in the respective reports for the  S short year and the C short year under  this  article.  However,  where  paragraph  three of subsection (s) of section six hundred twelve of this  chapter applies, the portion of such entire net income assigned to the S  short year and the C short year shall be  determined  under  normal  tax  accounting rules.(i)  With respect to a DISC which during any taxable year or reporting  year (1) received more than five percent of its  gross  sales  from  the  sale  of  inventory  or  other  property  which  it  purchased  from its  stockholders, (2) received more than five percent of its  gross  rentals  from  the  rental  of  property  which  it  purchased or rented from its  stockholders or (3)  received  more  than  five  percent  of  its  total  receipts  other  than  sales  and  rentals  from  its  stockholders, the  following provisions shall apply.    (A) For any taxable year in which sub-paragraph (B) of this  paragraph  is  in  effect  and  not rendered invalid, a DISC meeting the above test  shall be exempt from all taxes imposed by this article.    (B) Supplemental to the provisions of subdivision five of section  two  hundred  eleven  of this article, any taxpayer required to compute a tax  under this article, which during the taxable year being reported  was  a  stockholder  in  any DISC meeting the test prescribed in this paragraph,  shall for any taxable year ending after December thirty-first,  nineteen  hundred  seventy-one  adjust each item of its receipts, expenses, assets  and liabilities, as otherwise computed under  this  article,  by  adding  thereto  its  attributable share of each such DISC's receipts, expenses,  assets and liabilities as reportable by each such  DISC  to  the  United  States Treasury Department for its annual reporting period ending during  the  current  taxable year of such taxpayer; provided, however, (1) that  all transactions between the  taxpayer  and  each  such  DISC  shall  be  eliminated  from  the taxpayer's adjusted receipts, expenses, assets and  liabilities; (2) that the taxpayer's  entire  net  income  as  otherwise  computed  under this section, shall be reduced by subtracting the amount  of the deemed distribution of current income, if  any,  from  each  such  DISC  already  included  in  the  entire  net income of such taxpayer by  virtue of having been included in its entire  taxable  income  for  that  taxable  year  as reported to the United States Treasury Department; and  (3) that in the event this paragraph should  be  rendered  invalid,  all  DISC's  and  their stockholders taxable hereunder shall be taxed instead  under the remaining portions of this article.    (j) in the case  of  property  placed  in  service  in  taxable  years  beginning   before  nineteen  hundred  ninety-four,  for  taxable  years  beginning after  December  thirty-first,  nineteen  hundred  eighty-one,  except with respect to property subject to the provisions of section two  hundred  eighty-F  of  the internal revenue code and property subject to  the provisions of  section  one  hundred  sixty-eight  of  the  internal  revenue  code  which is placed in service in this state in taxable years  beginning after December thirty-first, nineteen hundred eighty-four, and  provided a deduction has  not  been  excluded  from  entire  net  income  pursuant  to  subparagraph eight of paragraph (b) of this subdivision, a  taxpayer shall be allowed with respect to property which is  subject  to  the  provisions  of  section  one  hundred  sixty-eight  of the internal  revenue code the depreciation  deduction  allowable  under  section  one  hundred  sixty-seven  of the internal revenue code as such section would  have applied to property placed in  service  on  December  thirty-first,  nineteen hundred eighty. This paragraph shall not apply to property of a  taxpayer  principally engaged in the conduct of aviation (other than air  freight forwarders acting as principal and like indirect  air  carriers)  which  is  placed  in service before taxable years beginning in nineteen  hundred eighty-nine.    (k) QSSS. (1) New York S corporation. In the case  of  a  New  York  S  corporation  which  is the parent of a qualified subchapter S subsidiary  (QSSS) with respect to a taxable year:    (A) where the QSSS is not an excluded corporation,(i) in determining the entire net income of such  parent  corporation,  all  assets,  liabilities,  income  and  deductions of the QSSS shall be  treated as assets, liabilities, income  and  deductions  of  the  parent  corporation, and    (ii)  the QSSS shall be exempt from all taxes imposed by this article,  and    (B) where the QSSS is an excluded corporation, the entire  net  income  of  the  parent  corporation  shall be determined as if the federal QSSS  election had not been made.    (2) New York C corporation. In the case of a New  York  C  corporation  which is the parent of a QSSS with respect to a taxable year:    (A) where the QSSS is a taxpayer,    (i)  in  determining the entire net income of such parent corporation,  all assets, liabilities, income and deductions  of  the  QSSS  shall  be  treated  as  assets,  liabilities,  income  and deductions of the parent  corporation, and    (ii) the QSSS shall be exempt from all taxes imposed by this  article,  and    (B) where the QSSS is not a taxpayer,    (i) if the QSSS is not an excluded corporation, the parent corporation  may  make  a QSSS inclusion election to include all assets, liabilities,  income and deductions of the QSSS as  assets,  liabilities,  income  and  deductions of the parent corporation, and    (ii) in the absence of such election, or where the QSSS is an excluded  corporation,  the  entire  net income of the parent corporation shall be  determined as if the federal QSSS election had not been made.    (3) Non-New York S corporation not excluded.  In  the  case  of  an  S  corporation which is not a taxpayer and not an excluded corporation, and  which  is  the parent of a QSSS which is a taxpayer, the shareholders of  the parent corporation shall be entitled to make the New York S election  under subsection (a) of section six hundred sixty of this chapter.    (A) For any taxable year for which such election  is  in  effect,  the  parent  corporation  shall be subject to tax under this article as a New  York S corporation, and the provisions of clause (A) of subparagraph one  of this paragraph shall apply.    (B) For any taxable year for which such election is not in effect, the  QSSS shall be a New York C corporation, and the entire net income of the  QSSS shall be determined as if the federal QSSS election  ha	
	
	
	
	

State Codes and Statutes

Statutes > New-york > Tax > Article-9-a > 208

§ 208. Definitions. As used in this article: 1. The term "corporation"  includes  (a)  an  association  within the meaning of paragraph three of  subsection (a) of section seventy-seven  hundred  one  of  the  internal  revenue  code (including a limited liability company), (b) a joint-stock  company or association, (c) a publicly traded partnership treated  as  a  corporation  for  purposes  of  the  internal  revenue  code pursuant to  section  seventy-seven  hundred  four  thereof  and  (d)  any   business  conducted  by  a  trustee  or  trustees wherein interest or ownership is  evidenced by certificate or other written instrument. "DISC" and "former  DISC" mean any corporation which meets the  requirements  of  subsection  (a) of section nine hundred ninety-two of the internal revenue code;    1-A.  The  term  "New  York  S corporation" means, with respect to any  taxable year, a corporation subject to tax under this article for  which  an  election  is  in  effect  pursuant  to subsection (a) of section six  hundred sixty of this chapter for such year,  any  such  year  shall  be  denominated  a "New York S year", and such election shall be denominated  a "New York S election". The term "New York C corporation"  means,  with  respect  to  any  taxable  year, a corporation subject to tax under this  article which is not a New York S corporation, and any such  year  shall  be  denominated  a  "New York C year". The term "termination year" means  any taxable year of a corporation during which the New York  S  election  terminates  on  a day other than the first day of such year. The portion  of the  taxable  year  ending  before  the  first  day  for  which  such  termination  is  effective  shall be denominated the "S short year", and  the  portion  of  such  year  beginning  on  such  first  day  shall  be  denominated  the  "C short year". The term "New York S termination year"  means any termination year which is not also an S termination  year  for  federal purposes.    1-B.  The  term  "QSSS"  means  a  corporation  which  is  a qualified  subchapter S subsidiary as defined  in  subparagraph  (B)  of  paragraph  three  of  subsection  (b)  of section thirteen hundred sixty-one of the  internal revenue code. The term "exempt QSSS" means a QSSS  exempt  from  tax  under this article as provided in paragraph (k) of subdivision nine  of this section, or a QSSS described in subclause (i) of clause  (B)  of  subparagraph  two  of paragraph (k) of subdivision nine of this section,  wherein the parent corporation of the QSSS is subject to tax under  this  article,  and the assets, liabilities, income and deductions of the QSSS  are treated as the assets, liabilities, income  and  deductions  of  the  parent  corporation.  Where  a  QSSS  is  an  exempt  QSSS, then for all  purposes under this article:    (a) the assets, liabilities, income,  deductions,  property,  payroll,  receipts, capital, credits, and all other tax attributes and elements of  economic  activity of the QSSS shall be deemed to be those of the parent  corporation,    (b) the  stocks,  bonds  and  other  securities  issued  by,  and  any  indebtedness  from,  the  QSSS  shall  not  be subsidiary, investment or  business capital of the parent corporation,    (c)  transactions  between  the  parent  corporation  and  the   QSSS,  including the payment of interest and dividends, shall not be taken into  account, and    (d)  general  executive  officers  of  the  QSSS shall be deemed to be  general executive officers of the parent corporation.    2. The term "taxpayer" means any corporation subject to tax under this  article;    3. The term "subsidiary" means  a  corporation  of  which  over  fifty  percent  of  the number of shares of stock entitling the holders thereof  to vote for the election of  directors  or  trustees  is  owned  by  the  taxpayer;4.  The  term  "subsidiary  capital" means investments in the stock of  subsidiaries  and  any  indebtedness  from  subsidiaries,  exclusive  of  accounts receivable acquired in the ordinary course of trade or business  for  services  rendered or for sales of property held primarily for sale  to  customers,  whether or not evidenced by written instrument, on which  interest is not claimed and deducted by the subsidiary for  purposes  of  taxation  under  article  nine-A,  thirty-two  or  thirty-three  of this  chapter, provided, however, that, in the discretion of the commissioner,  there shall be deducted from subsidiary capital  any  liabilities  which  are directly or indirectly attributable to subsidiary capital.    5.  The  term  "investment capital" means investments in stocks, bonds  and other securities, corporate and governmental, not held for  sale  to  customers  in  the  regular  course of business, exclusive of subsidiary  capital and stock issued by the taxpayer, provided,  however,  that,  in  the  discretion  of  the  commissioner,  there  shall  be  deducted from  investment capital any liabilities  which  are  directly  or  indirectly  attributable   to   investment  capital;  and  provided,  further,  that  investment capital shall not include any  such  investments  the  income  from which is excluded from entire net income pursuant to the provisions  of  paragraph  (c-1)  of  subdivision  nine  of  this  section, and that  investment capital shall  be  computed  without  regard  to  liabilities  directly or indirectly attributable to such investments, but only if air  carriers  organized  in  the  United States and operating in the foreign  country or countries in  which  the  taxpayer  has  its  major  base  of  operations  and  in which it is organized, resident or headquartered (if  not in the same country as its major base of operations) are not subject  to any tax based on or measured  by  capital  imposed  by  such  foreign  country  or countries or any political subdivision thereof, or if taxed,  are provided an exemption, equivalent to that provided for herein,  from  any  tax based on or measured by capital imposed by such foreign country  or countries and from any such tax imposed by any political  subdivision  thereof;    6.  The term "investment income" means income, including capital gains  in excess of capital losses, from  investment  capital,  to  the  extent  included  in computing entire net income, less, (a) in the discretion of  the commissioner, any  deductions  allowable  in  computing  entire  net  income  which  are  directly  or  indirectly  attributable to investment  capital or investment income, and (b) such portion of any net  operating  loss  deduction  allowable  in  computing  entire  net  income,  as  the  investment income, before such deduction, bears to  entire  net  income,  before  such  deduction,  provided,  however,  that  in  no  case  shall  investment income exceed entire net income;    7. (a) The term  "business  capital"  means  all  assets,  other  than  subsidiary capital, investment capital and stock issued by the taxpayer,  less  liabilities  not  deducted  from  subsidiary or investment capital  except that cash on hand and on deposit shall be treated  as  investment  capital or as business capital as the taxpayer may elect.    (b)  Provided, however, "business capital" shall not include assets to  the extent employed for  the  purpose  of  generating  income  which  is  excluded  from entire net income pursuant to the provisions of paragraph  (c-1) of subdivision nine of this section and shall be computed  without  regard  to  liabilities  directly  or  indirectly  attributable  to such  assets, but only if air carriers organized  in  the  United  States  and  operating  in the foreign country or countries in which the taxpayer has  its major base of operations and in which it is organized,  resident  or  headquartered  (if  not  in  the  same  country  as  its  major  base of  operations) are not subject to any tax based on or measured  by  capital  imposed   by   such  foreign  country  or  countries  or  any  politicalsubdivision thereof, or if taxed, are provided an exemption,  equivalent  to  that  provided  for  herein,  from  any  tax based on or measured by  capital imposed by such foreign country or countries and from  any  such  tax imposed by any political subdivision thereof;    8. The term "business income" means entire net income minus investment  income;    8-A.  Provided, however, that with respect to a DISC or a former DISC,  the following provisions shall apply:    (a) investments in the stocks, bonds or other securities of a DISC  or  any  indebtedness  from a DISC shall not be treated as either subsidiary  capital or investment capital under subdivisions four or  five  of  this  section,    (b)  any amounts deemed distributed from a DISC or a former DISC which  are taxable as dividends pursuant to  subsection  (b)  of  section  nine  hundred  ninety-five  of  the  internal revenue code of nineteen hundred  fifty-four shall be treated as business income, except any such  amounts  from  a  former  DISC attributable to amounts includible in a taxpayer's  entire net income for a prior taxable year  under  subparagraph  (B)  of  paragraph (i) of subdivision nine of this section shall be excluded from  entire net income,    (c)  any  gain  recognized  for  federal  income  tax  purposes on the  disposition of  stock  in  a  DISC,  and  any  gain  recognized  on  the  disposition  of  stock in a former DISC, includible in gross income as a  dividend pursuant to subsection (c) of section nine hundred  ninety-five  of  the  internal  revenue code of nineteen hundred fifty-four, shall be  treated as business income, and    (d) except as provided in paragraph (i) of subdivision  nine  of  this  section,  any  actual distribution from a DISC or a former DISC shall be  treated as business income  except  an  actual  distribution  which  for  federal  income  tax  purposes is treated as made out of "other earnings  and profits" under section  nine  hundred  ninety-six  of  the  internal  revenue  code  of nineteen hundred fifty-four, in which case such actual  distribution shall be treated as either subsidiary income or  investment  income under this article.    8-B.  (a)  The term "minimum taxable income" shall mean the entire net  income of the taxpayer for the taxable year:    (1) increased by the amount of the federal items of tax preference set  forth in section fifty-seven of the  internal  revenue  code  (with  the  modifications  set  forth  in  paragraph (b) of this subdivision), which  items of tax preference shall have the same meaning and be  computed  in  the  same  manner  as  under section fifty-seven of the internal revenue  code,    (2) determined with the federal adjustments described in paragraph (c)  of this subdivision, which adjustments shall have the same  meaning  and  be  computed  in  the  same  manner  as  under  sections  fifty-six  and  fifty-eight of the internal revenue code,    (3) increased by the net operating loss  deduction  otherwise  allowed  under paragraph (f) of subdivision nine of this section, and    (4)  reduced,  for  taxable  years  beginning  after  nineteen hundred  ninety-three, by  the  alternative  net  operating  loss  deduction,  as  defined in paragraph (d) of this subdivision.    (b)  The federal items of tax preference referred to hereinabove shall  be  modified  by  deducting  "tax-exempt  interest"   and   "accelerated  depreciation  or  amortization  on  certain  property  placed in service  before January 1, 1987", as determined under paragraphs five  and  seven  of subsection (a) of section fifty-seven of the internal revenue code.    (c) The adjustments referred to hereinabove shall be:(1) "Depreciation" as determined under paragraph one of subsection (a)  of  section fifty-six of the internal revenue code. For purposes of this  subparagraph, the depreciation item  of  adjustment  provided  for  here  shall  not include any amount attributable to property for which the tax  benefits of the accelerated cost recovery system are not available under  this  article  by  reason  of  subparagraph  ten  of  paragraph  (b)  of  subdivision nine of this section;    (2) "Mining exploration and development  costs"  as  determined  under  paragraph  two  of  subsection  (a) of section fifty-six of the internal  revenue code;    (3) "Treatment of certain long-term  contracts"  as  determined  under  paragraph  three  of subsection (a) of section fifty-six of the internal  revenue code;    (4) "Installment  sales  of  certain  property"  as  determined  under  paragraph  six  of  subsection  (a) of section fifty-six of the internal  revenue code;    (5)  "Circulation  expenditures  of  personal  holding  companies"  as  determined  under subparagraph (C) of paragraph two of subsection (b) of  section fifty-six of the internal revenue code;    (6) "Merchant marine capital construction funds" as  determined  under  paragraph  two  of  subsection  (c) of section fifty-six of the internal  revenue code;    (7) "Disallowance  of  passive  activity  loss"  as  determined  under  subsection (b) of section fifty-eight of the internal revenue code; and    (8)  "Adjusted  basis", as it appears in paragraph seven of subsection  (a) of section fifty-six of  the  internal  revenue  code,  but  without  taking  into  account  the  references  therein  to  paragraph  five  of  subsection (a) of section fifty-six of the internal revenue code.    (d) The term "alternative net operating loss deduction" means the  net  operating  loss  deduction  allowed for the taxable year under paragraph  (f) of subdivision nine of this section, except as provided herein.    (1)(A) The net operating loss for any year  beginning  after  nineteen  hundred  eighty-nine  which  is  included  in determining such deduction  shall be determined with the adjustments provided in subparagraph two of  paragraph (a) of this subdivision, and shall be reduced by the items  of  tax  preference  determined  under  subparagraph one of paragraph (a) of  this subdivision, attributable to such year. An item of  tax  preference  shall  be  taken into account only to the extent such item increased the  amount of the net operating loss for the taxable  year  under  paragraph  (f) of subdivision nine of this section.    (B)  In  the  case  of  loss  years  beginning before nineteen hundred  ninety, the amount of the net operating loss which may be  carried  over  to  taxable  years beginning after nineteen hundred eighty-nine shall be  equal to an amount which may be carried from the loss year to the  first  taxable   year   of   the  taxpayer  beginning  after  nineteen  hundred  eighty-nine.    (2) In determining the amount of such  deduction,  loss  carryforwards  and  carrybacks shall, subject to the provisions of subparagraph five of  paragraph (f) of subdivision nine of this section, be  computed  in  the  manner  set  forth  in  paragraph  two  of subsection (b) of section one  hundred seventy-two of the internal revenue code, except that,  for  the  reference  therein  to  taxable  income,  there shall be substituted the  phrase "ninety percent of  minimum  taxable  income  determined  without  regard to the alternative net operating loss deduction".    (3)  The  amount  of such deduction shall not exceed ninety percent of  minimum taxable income determined  without  regard  to  such  deduction,  provided,   however,   the  term  "ninety  percent"  shall  be  read  as"forty-five percent" with respect to taxable years beginning in nineteen  hundred ninety-four.    (e)  The  tax  commission may, whenever necessary in order to properly  reflect the minimum taxable income of any taxpayer, determine  the  year  or  period  in  which any item of income or deduction shall be included,  without regard to the method of accounting employed by the taxpayer.    (f) If the period covered by a report under this article is other than  the  period  covered  by  the  report  to  the  United  States  treasury  department,  the  minimum taxable income shall be appropriately modified  pursuant to regulations promulgated by the tax commission.    9. The term "entire net  income"  means  total  net  income  from  all  sources, which shall be presumably the same as the entire taxable income  (but not alternative minimum taxable income),    (i)  which  the  taxpayer  is  required to report to the United States  treasury department, or    (ii) which the taxpayer would have been  required  to  report  to  the  United  States  treasury department if it had not made an election under  subchapter s of chapter one of the internal revenue code, or    (iii) which the taxpayer, in the case of a corporation which is exempt  from federal income tax (other than the tax on unrelated  business  tax-  able  income imposed under section 511 of the internal revenue code) but  which is subject to tax under this article, would have been required  to  report  to the United States treasury department but for such exemption,  except as hereinafter provided, and subject to any modification required  by paragraphs (d) and (e) of subdivision three of  section  two  hundred  ten of this article.    (a) Entire net income shall not include:    (1)  income,  gains  and  losses  from subsidiary capital which do not  include the amount of a recovery in respect of any war loss  except  for  such  amounts  from  a  former DISC which are treated as business income  under subdivision eight-A of this section,    (2) fifty percent of dividends (A) other than from  subsidiaries,  and  (B)  other  than  amounts  treated  as business income under subdivision  eight-A of this section,  on  shares  of  stock  which  conform  to  the  requirements  of  subsection (c) of section two hundred forty-six of the  internal revenue code.    (3) bona fide gifts,    (4) income and deductions with respect to amounts received from school  districts and from corporations and associations, organized and operated  exclusively for religious, charitable or educational purposes,  no  part  of  the  net  earnings  of  which  inures  to the benefit of any private  shareholder or individual, for the operation of school buses,    (5) (i) any refund or credit of a  tax  imposed  under  this  article,  article  twenty-three,  or article thirty-two of this chapter, for which  tax no exclusion or deduction was allowed in determining the  taxpayer's  entire  net  income under this article, article twenty-three, or article  thirty-two of this chapter for any prior year, (ii) a refund  or  credit  of  general  corporation  tax  allowed  by subdivision eleven of section  11-604 of the administrative code of the city of New York, or (iii)  any  refund   or   credit  of  a  tax  imposed  under  sections  one  hundred  eighty-three, one hundred eighty-three-a, one hundred eighty-four or one  hundred eighty-four-a of this chapter, and    (6) any amount treated as dividends pursuant to section  seventy-eight  of  the  internal  revenue  code  and  not  otherwise  deductible  under  subparagraphs one and two of this paragraph;    (7) that portion of wages  and  salaries  paid  or  incurred  for  the  taxable  year  for  which  a  deduction  is  not allowed pursuant to the  provisions of section two hundred eighty-C of the internal revenue code.(8) in the case of a taxpayer who is separately or as a partner  of  a  partnership  doing  an  insurance  business  as a member of the New York  insurance exchange described in section six thousand two hundred one  of  the  insurance  law, any item of income, gain, loss or deduction of such  business  which  is  the  taxpayer's  distributive or pro rata share for  federal income tax purposes or which the taxpayer is  required  to  take  into account separately for federal income tax purposes.    (9)  for taxable years beginning after December thirty-first, nineteen  hundred eighty-one, except with respect to property which is a qualified  mass commuting vehicle described in subparagraph (D) of paragraph  eight  of  subsection  (f)  of  section one hundred sixty-eight of the internal  revenue  code  (relating  to  qualified  mass  commuting  vehicles)  and  property  of  a  taxpayer principally engaged in the conduct of aviation  (other than air freight forwarders acting as principal and like indirect  air carriers) which is placed in service before taxable years  beginning  in  nineteen  hundred  eighty-nine,  any amount which is included in the  taxpayer's federal taxable income solely as a result of an election made  pursuant to the provisions of such paragraph eight as it was  in  effect  for  agreements  entered  into  prior to January first, nineteen hundred  eighty-four;    (10) for taxable years beginning after December thirty-first, nineteen  hundred eighty-one, except with respect to property which is a qualified  mass commuting vehicle described in subparagraph (D) of paragraph  eight  of  subsection  (f)  of  section one hundred sixty-eight of the internal  revenue  code  (relating  to  qualified  mass  commuting  vehicles)  and  property  of  a  taxpayer principally engaged in the conduct of aviation  (other than air freight forwarders acting as principal and like indirect  air carriers) which is placed in service before taxable years  beginning  in  nineteen  hundred  eighty-nine,  any amount which the taxpayer could  have excluded from federal taxable income had it not made  the  election  provided  for in such paragraph eight as it was in effect for agreements  entered into prior to January first, nineteen hundred eighty-four;    (11)  the  amount  deductible  pursuant  to  paragraph  (j)  of   this  subdivision; and    (12)  upon  the disposition of property to which paragraph (j) of this  subdivision applies, the amount, if any, by which the aggregate  of  the  amounts   described  in  subparagraph  ten  of  paragraph  (b)  of  this  subdivision attributable to such property exceeds the aggregate  of  the  amounts  described  in paragraph (j) of this subdivision attributable to  such property; and    (13) if the added tax provided for in either  (i)  former  subdivision  two  of section one hundred eighty-two of this chapter (relating to real  estate corporations) or (ii) former subdivision  one-a  of  section  two  hundred  nine of this chapter (relating to real estate corporations) has  been imposed upon the taxpayer,  any  income  which  has  been  used  in  computing such tax.    (14)   The  amount  deductible  pursuant  to  paragraph  (l)  of  this  subsection.    (15) In the case of an  attorney-in-fact,  with  respect  to  which  a  mutual  insurance  company,  which  is  an  interinsurer or a reciprocal  insurer and is subject to tax under subdivision (a) of  section  fifteen  hundred  ten  of  this chapter, has made the election provided for under  section eight hundred thirty-five  of  the  Internal  Revenue  Code,  an  amount  equal  to the excess, if any, of the amounts paid or incurred by  such interinsurer or reciprocal insurer  in  the  taxable  year  to  the  attorney-in-fact  over  the  deduction  allowed  to such interinsurer or  reciprocal insurer with respect to  amounts  paid  or  incurred  in  thetaxable  year  to  the  attorney-in-fact  under  subsection  (b) of such  section eight hundred thirty-five of the Internal Revenue Code.    (16) In the case of a taxpayer subject to the modification provided by  subparagraph  sixteen  of  paragraph (b) of this subdivision, the amount  required to be recaptured pursuant to subsection (d) of section  179  of  the  internal  revenue  code  with  respect  to property upon which such  modification was based.    (17) for taxable years  beginning  after  December  thirty-first,  two  thousand  two,  the  amount deductible pursuant to paragraph (o) of this  subdivision.    (b) Entire net income  shall  be  determined  without  the  exclusion,  deduction or credit of:    (1)  the amount of any specific exemption or credit allowed in any law  of the United States imposing any tax on or measured by  the  income  of  corporations,    (2)  any  part of any income from dividends or interest on any kind of  stock, securities or indebtedness, except as provided in clauses (1) and  (2) of paragraph (a) hereof,    (3) taxes on or measured by profits or income paid or accrued  to  the  United  States,  any  of  its  possessions  or  to  any foreign country,  including taxes  in  lieu  of  any  of  the  foregoing  taxes  otherwise  generally  imposed  by  any  foreign country or by any possession of the  United States,    (3-a) taxes on or measured by profits  or  income,  or  which  include  profits  or  income  as a measure, paid or accrued to any other state of  the United States, or any  political  subdivision  thereof,  or  to  the  District  of  Columbia,  including taxes expressly in lieu of any of the  foregoing taxes otherwise generally imposed by any other  state  of  the  United  States, or any political subdivision thereof, or the District of  Columbia;    (4) taxes imposed  under  this  article  and  article  thirty-two  and  sections  one  hundred  eighty-three,  one  hundred  eighty-three-a, one  hundred eighty-four and one hundred eighty-four-a of this chapter,    (4-a)(A) the entire amount allowable as an exclusion or deduction  for  stock  transfer  taxes  imposed  by  article  twelve  of this chapter in  determining the entire taxable income which the taxpayer is required  to  report  to  the United States treasury department but only to the extent  that such taxes are incurred and paid in market making transactions, (B)  in those instances where a credit for the  special  additional  mortgage  recording  tax  credit  is  allowed  under  paragraph (a) of subdivision  seventeen of section two hundred ten of this article, the amount allowed  as an  exclusion  or  deduction  for  the  special  additional  mortgage  recording  tax  imposed  by  subdivision  one-a  of  section two hundred  fifty-three of this chapter in determining  the  entire  taxable  income  which  the  taxpayer is required to report to the United States treasury  department, and (C) unless the credit allowed  pursuant  to  subdivision  seventeen of section two hundred ten of this article is reflected in the  computation  of  the gain or loss so as to result in an increase in such  gain or decrease of such loss, for federal income tax purposes, from the  sale or other disposition of the property  with  respect  to  which  the  special   additional   mortgage   recording   tax  imposed  pursuant  to  subdivision one-a of section two hundred fifty-three of this chapter was  paid, the amount  of  the  special  additional  mortgage  recording  tax  imposed  by subdivision one-a of section two hundred fifty-three of this  chapter which was paid and which is reflected in the computation of  the  basis  of  the  property  so  as to result in a decrease in such gain or  increase in such loss for federal income tax purposes from the  sale  orother  disposition  of  the  property with respect to which such tax was  paid.    (6)  in  the  discretion of the tax commission, any amount of interest  directly or indirectly and  any  other  amount  directly  or  indirectly  attributable  as a carrying charge or otherwise to subsidiary capital or  to income, gains or losses from subsidiary capital.    (7) in the case of a taxpayer who is separately or as a partner  of  a  partnership  doing  an  insurance  business  as a member of the New York  insurance exchange described in section six thousand two hundred one  of  the insurance law, such taxpayer's distributive or pro rata share of the  allocated  entire  net  income  of  such  business  as  determined under  sections fifteen hundred three and fifteen hundred four of this chapter,  provided however, in the event such allocated entire  net  income  is  a  loss,  such taxpayer's distributive or pro rata share of such loss shall  not be subtracted from federal taxable income in  computing  entire  net  income under this subdivision.    (8)  for taxable years beginning after December thirty-first, nineteen  hundred eighty-one, except with respect to property which is a qualified  mass commuting vehicle described in subparagraph (D) of paragraph  eight  of  subsection  (f)  of  section one hundred sixty-eight of the internal  revenue  code  (relating  to  qualified  mass  commuting  vehicles)  and  property  of  a  taxpayer principally engaged in the conduct of aviation  (other than air freight forwarders acting as principal and like indirect  air carriers) which is placed in service before taxable years  beginning  in  nineteen  hundred eighty-nine, any amount which the taxpayer claimed  as a deduction in computing its  federal  taxable  income  solely  as  a  result  of an election made pursuant to the provisions of such paragraph  eight as it was in effect for agreements entered into prior  to  January  first, nineteen hundred eighty-four;    (9)  for taxable years beginning after December thirty-first, nineteen  hundred eighty-one, except with respect to property which is a qualified  mass commuting vehicle described in subparagraph (D) of paragraph  eight  of  subsection  (f)  of  section one hundred sixty-eight of the internal  revenue  code  (relating  to  qualified  mass  commuting  vehicles)  and  property  of  a  taxpayer principally engaged in the conduct of aviation  (other than air freight forwarders acting as principal and like indirect  air carriers) which is placed in service before taxable years  beginning  in  nineteen  hundred  eighty-nine,  any amount which the taxpayer would  have been required to include in the computation of its federal  taxable  income had it not made the election permitted pursuant to such paragraph  eight  as  it was in effect for agreements entered into prior to January  first, nineteen hundred eighty-four;    (10) in the case of  property  placed  in  service  in  taxable  years  beginning   before  nineteen  hundred  ninety-four,  for  taxable  years  beginning after  December  thirty-first,  nineteen  hundred  eighty-one,  except with respect to property subject to the provisions of section two  hundred  eighty-F  of the internal revenue code, property subject to the  provisions of section one hundred sixty-eight of  the  internal  revenue  code which is placed in service in this state in taxable years beginning  after  December  thirty-first, nineteen hundred eighty-four and property  of a taxpayer principally engaged in the conduct of aviation (other than  air freight  forwarders  acting  as  principal  and  like  indirect  air  carriers)  which  is placed in service before taxable years beginning in  nineteen  hundred  eight-nine,  the  amount  allowable  as  a  deduction  determined under section one hundred sixty-eight of the internal revenue  code;    (11)  upon  the disposition of property to which paragraph (j) of this  subdivision applies, the amount, if any, by which the aggregate  of  theamounts  described  in  such paragraph (j) attributable to such property  exceeds the aggregate of the amounts described in  subparagraph  ten  of  this paragraph attributable to such property.    (15)  Real  property taxes paid on qualified agricultural property and  deducted in determining federal taxable income, to  the  extent  of  the  amount of the agricultural property tax credit allowed under subdivision  twenty-two of section two hundred ten of this article.    (16)  In  the  case  of  a taxpayer which is not an eligible farmer as  defined in paragraph  (b)  of  subdivision  twenty-two  of  section  two  hundred  ten  of  this  article,  the  amount  of  any deduction claimed  pursuant to section 179 of the internal revenue code with respect  to  a  sport  utility vehicle which is not a passenger automobile as defined in  paragraph 5 of subsection (d) of section 280F of  the  internal  revenue  code.    (17)  for  taxable  years  beginning  after December thirty-first, two  thousand two, in the case of qualified property described  in  paragraph  two  of  subsection k of section 168 of the internal revenue code, other  than qualified resurgence zone property described in  paragraph  (q)  of  this  subdivision,  and  other  than  qualified  New  York  Liberty Zone  property described in paragraph two of subsection b of section 1400L  of  the  internal revenue code (without regard to clause (i) of subparagraph  (C) of such paragraph), which was placed in service  on  or  after  June  first,  two  thousand  three,  the amount allowable as a deduction under  section 167 of the internal revenue code.    (18) Premiums paid for environmental remediation insurance, as defined  in section twenty-three of this chapter,  and  deducted  in  determining  federal taxable income, to the extent of the amount of the environmental  remediation insurance credit allowed under such section twenty-three and  subdivision thirty-five of section two hundred ten of this article.    (19)  The  amount  of  any  deduction  allowed pursuant to section one  hundred ninety-nine of the internal revenue code.    (20) The amount of any  federal  deduction  for  taxes  imposed  under  article twenty-three of this chapter.    (c)  Entire  net  income  shall  include income within and without the  United States;    (c-1)(1) Notwithstanding any other provision of this article,  in  the  case  of a taxpayer which is a foreign air carrier holding a foreign air  carrier permit issued by the United States department of  transportation  pursuant  to  section  four  hundred  two of the federal aviation act of  nineteen hundred fifty-eight, as amended, and which is  qualified  under  subparagraph two of this paragraph, entire net income shall not include,  and  shall  be  computed  without  the deduction of, amounts directly or  indirectly  attributable  to,  (i)   any   income   derived   from   the  international  operation  of aircraft as described in and subject to the  provisions of section eight hundred eighty-three of the internal revenue  code, (ii) income without the United States which is  derived  from  the  operation  of aircraft, and (iii) income without the United States which  is of a type described in  subdivision  (a)  of  section  eight  hundred  eighty-one  of  the internal revenue code except that it is derived from  sources without the United  States.  Entire  net  income  shall  include  income  described in clauses (i), (ii) and (iii) of this subparagraph in  the case of taxpayers not described in the previous sentence.    (2) A taxpayer is qualified under this subparagraph  if  air  carriers  organized  in  the United States and operating in the foreign country or  countries in which the taxpayer has its major base of operations and  in  which  it  is  organized,  resident or headquartered (if not in the same  country as its major base of operations) are not subject to  any  income  tax  or  other tax based on or measured by income or receipts imposed bysuch foreign country or countries or any political subdivision  thereof,  or  if  so  subject to such tax, are provided an exemption from such tax  equivalent to that provided for herein.    (c-2)  Adjustments by qualified public utilities. (1) In the case of a  taxpayer which is a qualified public utility, entire net income shall be  computed with the adjustments set forth in this paragraph.    (2) Definitions. (A) Qualified public  utility.  The  term  "qualified  public  utility"  means  a taxpayer which: (i) on December thirty-first,  nineteen hundred ninety-nine, was subject to the ratemaking  supervision  of  the state department of public service, and (ii) for the year ending  on December thirty-first, nineteen hundred ninety-nine, was  subject  to  tax under former section one hundred eighty-six of this chapter.    (B) Transition property. The term "transition property" means property  placed  in  service  by the taxpayer before January first, two thousand,  for which a depreciation deduction is allowed under section one  hundred  sixty-seven of the internal revenue code.    (3)  Federal  depreciation  disallowed.  With  respect  to  transition  property, the deduction for federal income tax purposes for depreciation  shall not be allowed.    (4) New York depreciation. With  respect  to  transition  property,  a  deduction  shall  be  allowed  for the depreciation expense shown on the  books and records of the taxpayer for the taxable year and determined in  accordance with generally accepted accounting principles.    (5) Regulatory assets.  A  deduction  shall  be  allowed  for  amounts  recognized  as  expense on the books and records of the taxpayer for the  taxable year, which amounts  were  recognized  as  expense  for  federal  income  tax  purposes  in  a  taxable  year ending on or before December  thirty-first, nineteen hundred  ninety-nine,  where:  (A)  such  amounts  represent  expenditures  which,  when  made,  were charged to a deferred  debit account or similar asset account on the books and records  of  the  taxpayer,  and  where  (B)  the  recognition of expense on the books and  records of the taxpayer is matched by revenue stemming from a  procedure  or  adjustment allowing the recovery of such expenditures, and where (C)  such revenue is recognized  for  federal  income  tax  purposes  in  the  taxable year.    (6)  Basis for gain or loss. (A) Recognition transactions. (i) General  rule - book basis. Except as provided in subclause (ii) of this  clause,  where  transition  property  is  sold  or  otherwise  disposed of in the  taxable year in a transaction of the type requiring recognition of  gain  or  loss  for federal income tax purposes, the basis for determining the  amount of such gain or loss under this article shall be the cost of  the  property less the accumulated depreciation on the property determined on  the  books  and  records  of  the  taxpayer in accordance with generally  accepted accounting principles.    (ii) Qualified gain - New York basis.  Where  a  sale  or  disposition  described in subclause (i) of this clause results in recognition of gain  for  federal  income tax purposes, and where either (I) such recognition  occurs in a taxable year ending after nineteen hundred  ninety-nine  and  before  two  thousand ten, or (II) such recognition is with respect to a  nuclear electric generating facility,  the  basis  for  determining  the  amount of such gain under this article shall be the cost of the property  less  the  aggregate  of  the  New  York  depreciation deductions on the  property determined under subparagraph four of this paragraph.    (iii) No conversion of gain to loss.  In  the  event  that  the  basis  determined  under subclause (ii) of this clause results in determination  of a loss on the sale or disposition of the property, no  gain  or  loss  shall  be  recognized  under  this  article with respect to such sale or  disposition.(B)  Nonrecognition  transactions.  (i)  Carryover  basis.  (I)  where  transition  property  is  disposed  of  ("original  disposition")  in  a  transaction of a type requiring deferral of recognition of gain or  loss  for  federal  income  tax purposes, and where (II) there is a subsequent  recognition  of  gain or loss for federal income tax purposes ("clause B  gain or loss"), the amount of which is determined by reference, in whole  or in part, to  the  basis  of  such  transition  property  ("underlying  transition  property"),  then  (III) the amount of such clause B gain or  loss under this article shall be adjusted as provided in subclause  (ii)  or (iii) of this clause.    (ii)  General  rule  -  book  basis  adjustment. Except as provided in  subclause (iii) of this clause, the amount of clause  B  gain  shall  be  reduced,  or  the  amount  of  clause B loss increased, by the amount by  which the book basis of the underlying transition property on  the  date  of  original  disposition  (determined using the provisions of subclause  (i) of clause (A) of this subparagraph) exceeds the federal  income  tax  basis of such property on such date.    (iii)  Qualified gain - New York basis adjustment. Where clause B gain  either (I) occurs in  a  taxable  year  ending  after  nineteen  hundred  ninety-nine  and  before  two thousand ten, or (II) is with respect to a  nuclear electric generating facility, the amount of such gain under this  article shall be reduced, but not below zero, by the amount by which the  New York basis of the underlying transition  property  on  the  date  of  original  disposition (determined using the provisions of subclause (ii)  of clause (A) of this subparagraph) exceeds the federal income tax basis  of such property on such date.    (iv) Application to replacement  property  and  transferee  taxpayers.  This  clause  shall apply whether the clause B gain or loss: (I) is with  respect to either transition property or depreciable property the  basis  of  which  is determined by reference to transition property, or (II) is  recognized by either a qualified public utility or by a  taxpayer  which  is  a  transferee of transition property (whether or not such transferee  is a qualified public utility, notwithstanding subparagraph one of  this  paragraph).    (c-3)  Depreciation  adjustments  by  qualified  power  producers  and  pipeline companies. (1) In the case of a qualified taxpayer, entire  net  income  shall be computed with the depreciation adjustments set forth in  this paragraph.    (2) Definitions. (A) Qualified taxpayer. The term "qualified taxpayer"  means a qualified power producer or a qualified pipeline.    (B) Qualified power producer.  The  term  "qualified  power  producer"  means  a  taxpayer which: (i) on December thirty-first, nineteen hundred  ninety-nine, was not subject to the ratemaking supervision of the  state  department  of  public service, and (ii) for the year ending on December  thirty-first, nineteen hundred ninety-nine, was  subject  to  tax  under  former  section one hundred eighty-six of this chapter on account of its  being principally engaged in the business of supplying electricity.    (C) Qualified pipeline. The term "qualified pipeline" means a taxpayer  which: (i) on December thirty-first, nineteen hundred  ninety-nine,  was  subject  to  the  ratemaking  supervision  of  either the federal energy  regulatory commission or the state department  of  public  service,  and  (ii)  for  the  year  ending  on December thirty-first, nineteen hundred  ninety-nine, was subject to tax under sections one hundred  eighty-three  and  one  hundred  eighty-four  of  this chapter on account of its being  principally engaged in the business of pipeline transmission.    (D) Transition property. The term "transition property" means property  placed in service by a qualified  taxpayer  before  January  first,  twothousand,  for  which  a depreciation deduction is allowed under section  one hundred sixty-seven of the internal revenue code.    (3)  Federal  depreciation  disallowed.  With  respect  to  transition  property, the deduction for federal income tax purposes for depreciation  shall not be allowed.    (4) New York depreciation. With  respect  to  transition  property,  a  deduction  shall  be  allowed  for  the depreciation expense computed as  provided in this subparagraph. (A) All transition property shown on  the  books  and  records of the taxpayer on January first, two thousand shall  be treated as a single asset placed in service on  such  date.  The  New  York  basis for purposes of computing the depreciation deduction on such  single asset shall be the net book value  of  such  transition  property  determined  on  the  first day of the federal taxable year ending in two  thousand (or on the date any such property  is  placed  in  service,  if  later) adjusted as provided in clause (B) of this subparagraph.    (B)  If  transition property is sold or otherwise disposed of, the New  York basis of the single asset shall be reduced on the date of such sale  or disposition by the amount of the adjusted federal tax basis  of  such  property on such date.    (C)  The  New York depreciation deduction allowed for any taxable year  with  respect  to  such  single  asset  shall  be  computed  using   the  straight-line method, a twenty-year life, and a salvage value of zero.    (D) For purposes of this subparagraph, the term "net book value" means  cost  reduced by accumulated depreciation shown on the books and records  of the taxpayer and  determined,  in  the  case  of  a  qualified  power  producer,  in  accordance with generally accepted accounting principles;  and in the  case  of  a  qualified  pipeline,  in  accordance  with  the  taxpayer's  regulatory  reports filed with the federal energy regulatory  commission or state department of public service.    (d) The tax commission may, whenever necessary in  order  properly  to  reflect  the  entire  net  income of any taxpayer, determine the year or  period in which any item of  income  or  deduction  shall  be  included,  without regard to the method of accounting employed by the taxpayer;    (e)  The  entire net income of any bridge commission created by act of  congress to construct a bridge across an  international  boundary  means  its  gross  income  less  the  expense  of maintaining and operating its  properties, the annual interest upon its bonds  and  other  obligations,  and the annual charge for the retirement of such bonds or obligations at  maturity;    (f)  A  net  operating  loss deduction shall be allowed which shall be  presumably the same as the net operating loss  deduction  allowed  under  section  one  hundred seventy-two of the internal revenue code, or which  would have been allowed if the taxpayer had not made an  election  under  subchapter s of chapter one of the internal revenue code, except that in  every instance where such deduction is allowed under this article:    (1)  any  net  operating  loss  included in determining such deduction  shall be adjusted to reflect the inclusions and exclusions  from  entire  net income required by paragraphs (a), (b) and (g) hereof,    (2)  such deduction shall not include any net operating loss sustained  during any taxable year  beginning  prior  to  January  first,  nineteen  hundred  sixty-one, or during any taxable year in which the taxpayer was  not subject to the tax imposed by this article,    (3) such deduction shall not exceed the deduction for the taxable year  allowed under section one hundred seventy-two of  the  internal  revenue  code,  or  the  deduction  for  the  taxable  year which would have been  allowed if the taxpayer had not made an election under subchapter  s  of  chapter one of the internal revenue code,(4)  in the case of a New York S corporation, such deduction shall not  include any net operating loss sustained during a New  York  C  year  or  during a New York S year beginning prior to nineteen hundred ninety, and  in  the  case  of  a  New  York  C corporation, such deduction shall not  include  any  net  operating  loss  sustained  during a New York S year,  provided, however, a New York S year shall be treated as a taxable  year  for  purposes  of determining the number of taxable years to which a net  operating loss may be carried back or carried forward, and    (5) the net operating loss deduction allowed under section one hundred  seventy-two of the internal revenue code  shall  for  purposes  of  this  paragraph  be  determined  as  if  the  taxpayer  had elected under such  section to relinquish the entire carryback period with  respect  to  net  operating  losses, except with respect to the first ten thousand dollars  of each of such losses, sustained during taxable years ending after June  thirtieth, nineteen hundred eighty-nine.    (g) For taxable years commencing  prior  to  January  first,  nineteen  hundred eighty-seven, at the election of the taxpayer, a deduction shall  be allowed for expenditures paid or incurred during the taxable year for  the  construction,  reconstruction,  erection  or  improvement of either  industrial  waste  treatment  facilities  or   air   pollution   control  facilities,  or,  with  respect  to  taxable years beginning on or after  January first, nineteen hundred seventy-seven and before January  first,  nineteen  hundred  eighty-one,  industrial  waste  treatment  controlled  process facilities or air pollution controlled process facilities.    (1) (A) (1) The term "industrial  waste  treatment  facilities"  shall  mean  facilities  for  the treatment, neutralization or stabilization of  industrial waste and other wastes (as the terms "industrial  waste"  and  "other  wastes"  are  defined  in  section  17-0105 of the environmental  conservation law) from a point immediately preceding the point  of  such  treatment,  neutralization  or  stabilization  to the point of disposal,  including the necessary pumping and transmitting facilities.    (2) The term "industrial waste treatment controlled process  facility"  shall mean such portion of the cost of an industrial production facility  designed  for  the  purpose  of  obviating the need for industrial waste  treatment facilities as defined in item one  of  this  clause  as  shall  exceed the cost of an industrial production facility of equal production  capacity  which  if constructed would require industrial waste treatment  facilities to meet emission standards in compliance with the  provisions  of the environmental conservation law and the codes, rules, regulations,  permits  or orders issued pursuant thereto but only to the extent of the  cost of such industrial waste treatment facilities.    (B) (1)  The  term  "air  pollution  control  facilities"  shall  mean  facilities which remove, reduce, or render less noxious air contaminants  emitted from an air contamination source (as the terms "air contaminant"  and  "air  contamination  source"  are defined in section 19-0107 of the  environmental conservation law) from a point immediately  preceding  the  point  of such removal, reduction or rendering to the point of discharge  of air, meeting emission standards as established by the  department  of  environmental  conservation, but excluding such facilities installed for  the primary purpose of salvaging  materials  which  are  usable  in  the  manufacturing  process  or are marketable and excluding those facilities  which rely for their efficacy on dilution, dispersion or assimilation of  air contaminants in the ambient air  after  emission.  Such  term  shall  further  include flue gas desulfurization equipment and attendant sludge  disposal facilities, fluidized bed boilers, precombustion coal  cleaning  facilities  or  other  facilities that conform with this subdivision and  which comply with the provisions of the state  acid  deposition  controlact  set  forth  in  title nine of article nineteen of the environmental  conservation law.    (2)  The  term  "air pollution controlled process facility" shall mean  such portion of the cost of an industrial production  facility  designed  for  the  purpose  of  obviating  the  need  for  air  pollution control  facilities as defined in item one of this clause  as  shall  exceed  the  cost  of  an industrial production facility of equal productive capacity  which if constructed would require air pollution control  facilities  to  inert  emission  standards  as  established  pursuant  to title three of  article nineteen of the environmental conservation law but only  to  the  extent of the cost of such air pollution control facilities.    (2) However, such deduction shall be allowed only    (A)  with  respect to tangible property which is depreciable, pursuant  to section one hundred sixty-seven of the internal revenue code,  having  a  situs in this state and used in the taxpayer's trade or business, the  construction, reconstruction, erection or improvement of which,  in  the  case  of industrial waste treatment facilities, is initiated on or after  January first, nineteen hundred sixty-five or which, in the case of  air  pollution  control  facilities,  is initiated on or after January first,  nineteen hundred sixty-six, or which in the  case  of  industrial  waste  treatment  controlled  process  facilities  or  air pollution controlled  process facilities is initiated on and  after  January  first,  nineteen  hundred seventy-seven, and    (B) on condition that such facilities have been certified by the state  commissioner   of   environmental   conservation   or   his   designated  representative,  pursuant  to  section  19-0309  of  the   environmental  conservation  law,  as  complying  with  applicable  provisions  of  the  environmental  conservation  law,  the  public  health  law,  the  state  sanitary  code  and  codes, rules, regulations, permits or orders issued  pursuant thereto, and    (C) on condition that entire net income for the taxable year  and  all  succeeding  taxable  years  be  computed without any deductions for such  expenditures or for depreciation or amortization of  the  same  property  other  than  the deductions allowed by this paragraph (g), except to the  extent that the basis of the property may  be  attributable  to  factors  other  than  such  expenditures,  or  in  case  a deduction is allowable  pursuant to this paragraph for only a  part  of  such  expenditures,  on  condition that any deduction allowed for federal income tax purposes for  such  expenditures  or  for  depreciation  or  amortization  of the same  property be proportionately reduced in computing entire net  income  for  the taxable year and all succeeding taxable years, and    (D)  where  the  election provided for in paragraph (d) of subdivision  three of section two hundred ten of this chapter has not been  exercised  in respect to the same property.    (3)  (A)  If  expenditures in respect to an industrial waste treatment  facility,  an  air  pollution  control  facility,  an  industrial  waste  treatment  controlled  process  facility  or an air pollution controlled  process facility have been deducted as provided herein and if within ten  years from the end of the taxable  year  in  which  such  deduction  was  allowed  such  property  or  any  part  thereof  is used for the primary  purpose of salvaging materials which are  usable  in  the  manufacturing  process  or are marketable, the taxpayer shall report such change of use  in its report for the first taxable year during which it occurs, and the  tax commission may recompute the tax for the year  or  years  for  which  such  deduction was allowed and any carryback or carryover year, and may  assess any additional tax resulting from such recomputation  within  the  time  fixed  by  paragraph nine of subsection (c) of section ten hundred  eighty-three of this chapter.(B) If a deduction is allowed as herein provided for expenditures paid  or incurred during  any  taxable  year  on  the  basis  of  a  temporary  certificate   of   compliance   issued  pursuant  to  the  environmental  conservation law and  if  the  taxpayer  fails  to  obtain  a  permanent  certificate of compliance upon completion of the facilities with respect  to  which  such  temporary  certificate  was  issued, the taxpayer shall  report such failure in its report for the taxable year during which such  facilities are completed, and the tax commission may recompute  the  tax  for  the  year  or  years  for  which such deduction was allowed and any  carryback or carryover year, and may assess any additional tax resulting  from in such recomputation within the time fixed by  paragraph  nine  of  subsection (c) of section ten hundred eighty-three.    (C) If a deduction is allowed as herein provided for expenditures paid  or  incurred  during  any  taxable  year  in respect to an air pollution  control facility on the basis of  a  certificate  of  compliance  issued  pursuant  to  the  environmental conservation law and the certificate is  revoked  pursuant  to  subdivision  three  of  section  19-0309  of  the  environmental conservation law, the tax commission may recompute the tax  for  the  year  or  years  for  which  the facility is not or was not in  compliance  with  the  applicable  provisions   of   the   environmental  conservation  law, the state sanitary code or codes, rules, regulations,  permits  or  orders  promulgated  pursuant  thereto,  and  for  which  a  deduction was allowed, as well as for any carryback or carryover year to  which  such  deduction  was  carried,  and may assess any additional tax  resulting from such recomputation within the  time  fixed  by  paragraph  nine of subsection (c) of section ten hundred eighty-three.    (4)  In  any  taxable year when property is sold or otherwise disposed  of, with respect to which a deduction has been allowed pursuant to  this  paragraph,  such  deduction  shall  be  disregarded in computing gain or  loss, and the gain or loss on the sale  or  other  disposition  of  such  property  shall  be  the  gain  or loss entering into the computation of  entire taxable income which the taxpayer is required to  report  to  the  United States treasury department for such taxable year.    (h) If the period covered by a report under this article is other than  the  period  covered  by  the  report  to  the  United  States  treasury  department,    (1) except as provided in subparagraph two hereof, entire  net  income  shall  be  determined by multiplying the taxable income reported to such  department (as adjusted pursuant to the provisions of this  article)  by  the  number  of  calendar  months  or major parts thereof covered by the  report under this article and dividing by the number of calendar  months  or  major  parts thereof covered by the report to such department. If it  shall appear that such method of determining entire net income does  not  properly  reflect the taxpayer's income during the period covered by the  report under this article, the tax commission shall be authorized in its  discretion to determine such entire net income solely on  the  basis  of  the taxpayer's income during the period covered by its report under this  article;    (2)  in the case of a New York S termination year, an equal portion of  entire net income shall be assigned  to  each  day  of  such  year.  The  portion  of  such entire net income thereby assigned to the S short year  and the C short year shall be included in the respective reports for the  S short year and the C short year under  this  article.  However,  where  paragraph  three of subsection (s) of section six hundred twelve of this  chapter applies, the portion of such entire net income assigned to the S  short year and the C short year shall be  determined  under  normal  tax  accounting rules.(i)  With respect to a DISC which during any taxable year or reporting  year (1) received more than five percent of its  gross  sales  from  the  sale  of  inventory  or  other  property  which  it  purchased  from its  stockholders, (2) received more than five percent of its  gross  rentals  from  the  rental  of  property  which  it  purchased or rented from its  stockholders or (3)  received  more  than  five  percent  of  its  total  receipts  other  than  sales  and  rentals  from  its  stockholders, the  following provisions shall apply.    (A) For any taxable year in which sub-paragraph (B) of this  paragraph  is  in  effect  and  not rendered invalid, a DISC meeting the above test  shall be exempt from all taxes imposed by this article.    (B) Supplemental to the provisions of subdivision five of section  two  hundred  eleven  of this article, any taxpayer required to compute a tax  under this article, which during the taxable year being reported  was  a  stockholder  in  any DISC meeting the test prescribed in this paragraph,  shall for any taxable year ending after December thirty-first,  nineteen  hundred  seventy-one  adjust each item of its receipts, expenses, assets  and liabilities, as otherwise computed under  this  article,  by  adding  thereto  its  attributable share of each such DISC's receipts, expenses,  assets and liabilities as reportable by each such  DISC  to  the  United  States Treasury Department for its annual reporting period ending during  the  current  taxable year of such taxpayer; provided, however, (1) that  all transactions between the  taxpayer  and  each  such  DISC  shall  be  eliminated  from  the taxpayer's adjusted receipts, expenses, assets and  liabilities; (2) that the taxpayer's  entire  net  income  as  otherwise  computed  under this section, shall be reduced by subtracting the amount  of the deemed distribution of current income, if  any,  from  each  such  DISC  already  included  in  the  entire  net income of such taxpayer by  virtue of having been included in its entire  taxable  income  for  that  taxable  year  as reported to the United States Treasury Department; and  (3) that in the event this paragraph should  be  rendered  invalid,  all  DISC's  and  their stockholders taxable hereunder shall be taxed instead  under the remaining portions of this article.    (j) in the case  of  property  placed  in  service  in  taxable  years  beginning   before  nineteen  hundred  ninety-four,  for  taxable  years  beginning after  December  thirty-first,  nineteen  hundred  eighty-one,  except with respect to property subject to the provisions of section two  hundred  eighty-F  of  the internal revenue code and property subject to  the provisions of  section  one  hundred  sixty-eight  of  the  internal  revenue  code  which is placed in service in this state in taxable years  beginning after December thirty-first, nineteen hundred eighty-four, and  provided a deduction has  not  been  excluded  from  entire  net  income  pursuant  to  subparagraph eight of paragraph (b) of this subdivision, a  taxpayer shall be allowed with respect to property which is  subject  to  the  provisions  of  section  one  hundred  sixty-eight  of the internal  revenue code the depreciation  deduction  allowable  under  section  one  hundred  sixty-seven  of the internal revenue code as such section would  have applied to property placed in  service  on  December  thirty-first,  nineteen hundred eighty. This paragraph shall not apply to property of a  taxpayer  principally engaged in the conduct of aviation (other than air  freight forwarders acting as principal and like indirect  air  carriers)  which  is  placed  in service before taxable years beginning in nineteen  hundred eighty-nine.    (k) QSSS. (1) New York S corporation. In the case  of  a  New  York  S  corporation  which  is the parent of a qualified subchapter S subsidiary  (QSSS) with respect to a taxable year:    (A) where the QSSS is not an excluded corporation,(i) in determining the entire net income of such  parent  corporation,  all  assets,  liabilities,  income  and  deductions of the QSSS shall be  treated as assets, liabilities, income  and  deductions  of  the  parent  corporation, and    (ii)  the QSSS shall be exempt from all taxes imposed by this article,  and    (B) where the QSSS is an excluded corporation, the entire  net  income  of  the  parent  corporation  shall be determined as if the federal QSSS  election had not been made.    (2) New York C corporation. In the case of a New  York  C  corporation  which is the parent of a QSSS with respect to a taxable year:    (A) where the QSSS is a taxpayer,    (i)  in  determining the entire net income of such parent corporation,  all assets, liabilities, income and deductions  of  the  QSSS  shall  be  treated  as  assets,  liabilities,  income  and deductions of the parent  corporation, and    (ii) the QSSS shall be exempt from all taxes imposed by this  article,  and    (B) where the QSSS is not a taxpayer,    (i) if the QSSS is not an excluded corporation, the parent corporation  may  make  a QSSS inclusion election to include all assets, liabilities,  income and deductions of the QSSS as  assets,  liabilities,  income  and  deductions of the parent corporation, and    (ii) in the absence of such election, or where the QSSS is an excluded  corporation,  the  entire  net income of the parent corporation shall be  determined as if the federal QSSS election had not been made.    (3) Non-New York S corporation not excluded.  In  the  case  of  an  S  corporation which is not a taxpayer and not an excluded corporation, and  which  is  the parent of a QSSS which is a taxpayer, the shareholders of  the parent corporation shall be entitled to make the New York S election  under subsection (a) of section six hundred sixty of this chapter.    (A) For any taxable year for which such election  is  in  effect,  the  parent  corporation  shall be subject to tax under this article as a New  York S corporation, and the provisions of clause (A) of subparagraph one  of this paragraph shall apply.    (B) For any taxable year for which such election is not in effect, the  QSSS shall be a New York C corporation, and the entire net income of the  QSSS shall be determined as if the federal QSSS election  ha	
	











































		
		
	

	
	
	

			

			
		

		

State Codes and Statutes

State Codes and Statutes

Statutes > New-york > Tax > Article-9-a > 208

§ 208. Definitions. As used in this article: 1. The term "corporation"  includes  (a)  an  association  within the meaning of paragraph three of  subsection (a) of section seventy-seven  hundred  one  of  the  internal  revenue  code (including a limited liability company), (b) a joint-stock  company or association, (c) a publicly traded partnership treated  as  a  corporation  for  purposes  of  the  internal  revenue  code pursuant to  section  seventy-seven  hundred  four  thereof  and  (d)  any   business  conducted  by  a  trustee  or  trustees wherein interest or ownership is  evidenced by certificate or other written instrument. "DISC" and "former  DISC" mean any corporation which meets the  requirements  of  subsection  (a) of section nine hundred ninety-two of the internal revenue code;    1-A.  The  term  "New  York  S corporation" means, with respect to any  taxable year, a corporation subject to tax under this article for  which  an  election  is  in  effect  pursuant  to subsection (a) of section six  hundred sixty of this chapter for such year,  any  such  year  shall  be  denominated  a "New York S year", and such election shall be denominated  a "New York S election". The term "New York C corporation"  means,  with  respect  to  any  taxable  year, a corporation subject to tax under this  article which is not a New York S corporation, and any such  year  shall  be  denominated  a  "New York C year". The term "termination year" means  any taxable year of a corporation during which the New York  S  election  terminates  on  a day other than the first day of such year. The portion  of the  taxable  year  ending  before  the  first  day  for  which  such  termination  is  effective  shall be denominated the "S short year", and  the  portion  of  such  year  beginning  on  such  first  day  shall  be  denominated  the  "C short year". The term "New York S termination year"  means any termination year which is not also an S termination  year  for  federal purposes.    1-B.  The  term  "QSSS"  means  a  corporation  which  is  a qualified  subchapter S subsidiary as defined  in  subparagraph  (B)  of  paragraph  three  of  subsection  (b)  of section thirteen hundred sixty-one of the  internal revenue code. The term "exempt QSSS" means a QSSS  exempt  from  tax  under this article as provided in paragraph (k) of subdivision nine  of this section, or a QSSS described in subclause (i) of clause  (B)  of  subparagraph  two  of paragraph (k) of subdivision nine of this section,  wherein the parent corporation of the QSSS is subject to tax under  this  article,  and the assets, liabilities, income and deductions of the QSSS  are treated as the assets, liabilities, income  and  deductions  of  the  parent  corporation.  Where  a  QSSS  is  an  exempt  QSSS, then for all  purposes under this article:    (a) the assets, liabilities, income,  deductions,  property,  payroll,  receipts, capital, credits, and all other tax attributes and elements of  economic  activity of the QSSS shall be deemed to be those of the parent  corporation,    (b) the  stocks,  bonds  and  other  securities  issued  by,  and  any  indebtedness  from,  the  QSSS  shall  not  be subsidiary, investment or  business capital of the parent corporation,    (c)  transactions  between  the  parent  corporation  and  the   QSSS,  including the payment of interest and dividends, shall not be taken into  account, and    (d)  general  executive  officers  of  the  QSSS shall be deemed to be  general executive officers of the parent corporation.    2. The term "taxpayer" means any corporation subject to tax under this  article;    3. The term "subsidiary" means  a  corporation  of  which  over  fifty  percent  of  the number of shares of stock entitling the holders thereof  to vote for the election of  directors  or  trustees  is  owned  by  the  taxpayer;4.  The  term  "subsidiary  capital" means investments in the stock of  subsidiaries  and  any  indebtedness  from  subsidiaries,  exclusive  of  accounts receivable acquired in the ordinary course of trade or business  for  services  rendered or for sales of property held primarily for sale  to  customers,  whether or not evidenced by written instrument, on which  interest is not claimed and deducted by the subsidiary for  purposes  of  taxation  under  article  nine-A,  thirty-two  or  thirty-three  of this  chapter, provided, however, that, in the discretion of the commissioner,  there shall be deducted from subsidiary capital  any  liabilities  which  are directly or indirectly attributable to subsidiary capital.    5.  The  term  "investment capital" means investments in stocks, bonds  and other securities, corporate and governmental, not held for  sale  to  customers  in  the  regular  course of business, exclusive of subsidiary  capital and stock issued by the taxpayer, provided,  however,  that,  in  the  discretion  of  the  commissioner,  there  shall  be  deducted from  investment capital any liabilities  which  are  directly  or  indirectly  attributable   to   investment  capital;  and  provided,  further,  that  investment capital shall not include any  such  investments  the  income  from which is excluded from entire net income pursuant to the provisions  of  paragraph  (c-1)  of  subdivision  nine  of  this  section, and that  investment capital shall  be  computed  without  regard  to  liabilities  directly or indirectly attributable to such investments, but only if air  carriers  organized  in  the  United States and operating in the foreign  country or countries in  which  the  taxpayer  has  its  major  base  of  operations  and  in which it is organized, resident or headquartered (if  not in the same country as its major base of operations) are not subject  to any tax based on or measured  by  capital  imposed  by  such  foreign  country  or countries or any political subdivision thereof, or if taxed,  are provided an exemption, equivalent to that provided for herein,  from  any  tax based on or measured by capital imposed by such foreign country  or countries and from any such tax imposed by any political  subdivision  thereof;    6.  The term "investment income" means income, including capital gains  in excess of capital losses, from  investment  capital,  to  the  extent  included  in computing entire net income, less, (a) in the discretion of  the commissioner, any  deductions  allowable  in  computing  entire  net  income  which  are  directly  or  indirectly  attributable to investment  capital or investment income, and (b) such portion of any net  operating  loss  deduction  allowable  in  computing  entire  net  income,  as  the  investment income, before such deduction, bears to  entire  net  income,  before  such  deduction,  provided,  however,  that  in  no  case  shall  investment income exceed entire net income;    7. (a) The term  "business  capital"  means  all  assets,  other  than  subsidiary capital, investment capital and stock issued by the taxpayer,  less  liabilities  not  deducted  from  subsidiary or investment capital  except that cash on hand and on deposit shall be treated  as  investment  capital or as business capital as the taxpayer may elect.    (b)  Provided, however, "business capital" shall not include assets to  the extent employed for  the  purpose  of  generating  income  which  is  excluded  from entire net income pursuant to the provisions of paragraph  (c-1) of subdivision nine of this section and shall be computed  without  regard  to  liabilities  directly  or  indirectly  attributable  to such  assets, but only if air carriers organized  in  the  United  States  and  operating  in the foreign country or countries in which the taxpayer has  its major base of operations and in which it is organized,  resident  or  headquartered  (if  not  in  the  same  country  as  its  major  base of  operations) are not subject to any tax based on or measured  by  capital  imposed   by   such  foreign  country  or  countries  or  any  politicalsubdivision thereof, or if taxed, are provided an exemption,  equivalent  to  that  provided  for  herein,  from  any  tax based on or measured by  capital imposed by such foreign country or countries and from  any  such  tax imposed by any political subdivision thereof;    8. The term "business income" means entire net income minus investment  income;    8-A.  Provided, however, that with respect to a DISC or a former DISC,  the following provisions shall apply:    (a) investments in the stocks, bonds or other securities of a DISC  or  any  indebtedness  from a DISC shall not be treated as either subsidiary  capital or investment capital under subdivisions four or  five  of  this  section,    (b)  any amounts deemed distributed from a DISC or a former DISC which  are taxable as dividends pursuant to  subsection  (b)  of  section  nine  hundred  ninety-five  of  the  internal revenue code of nineteen hundred  fifty-four shall be treated as business income, except any such  amounts  from  a  former  DISC attributable to amounts includible in a taxpayer's  entire net income for a prior taxable year  under  subparagraph  (B)  of  paragraph (i) of subdivision nine of this section shall be excluded from  entire net income,    (c)  any  gain  recognized  for  federal  income  tax  purposes on the  disposition of  stock  in  a  DISC,  and  any  gain  recognized  on  the  disposition  of  stock in a former DISC, includible in gross income as a  dividend pursuant to subsection (c) of section nine hundred  ninety-five  of  the  internal  revenue code of nineteen hundred fifty-four, shall be  treated as business income, and    (d) except as provided in paragraph (i) of subdivision  nine  of  this  section,  any  actual distribution from a DISC or a former DISC shall be  treated as business income  except  an  actual  distribution  which  for  federal  income  tax  purposes is treated as made out of "other earnings  and profits" under section  nine  hundred  ninety-six  of  the  internal  revenue  code  of nineteen hundred fifty-four, in which case such actual  distribution shall be treated as either subsidiary income or  investment  income under this article.    8-B.  (a)  The term "minimum taxable income" shall mean the entire net  income of the taxpayer for the taxable year:    (1) increased by the amount of the federal items of tax preference set  forth in section fifty-seven of the  internal  revenue  code  (with  the  modifications  set  forth  in  paragraph (b) of this subdivision), which  items of tax preference shall have the same meaning and be  computed  in  the  same  manner  as  under section fifty-seven of the internal revenue  code,    (2) determined with the federal adjustments described in paragraph (c)  of this subdivision, which adjustments shall have the same  meaning  and  be  computed  in  the  same  manner  as  under  sections  fifty-six  and  fifty-eight of the internal revenue code,    (3) increased by the net operating loss  deduction  otherwise  allowed  under paragraph (f) of subdivision nine of this section, and    (4)  reduced,  for  taxable  years  beginning  after  nineteen hundred  ninety-three, by  the  alternative  net  operating  loss  deduction,  as  defined in paragraph (d) of this subdivision.    (b)  The federal items of tax preference referred to hereinabove shall  be  modified  by  deducting  "tax-exempt  interest"   and   "accelerated  depreciation  or  amortization  on  certain  property  placed in service  before January 1, 1987", as determined under paragraphs five  and  seven  of subsection (a) of section fifty-seven of the internal revenue code.    (c) The adjustments referred to hereinabove shall be:(1) "Depreciation" as determined under paragraph one of subsection (a)  of  section fifty-six of the internal revenue code. For purposes of this  subparagraph, the depreciation item  of  adjustment  provided  for  here  shall  not include any amount attributable to property for which the tax  benefits of the accelerated cost recovery system are not available under  this  article  by  reason  of  subparagraph  ten  of  paragraph  (b)  of  subdivision nine of this section;    (2) "Mining exploration and development  costs"  as  determined  under  paragraph  two  of  subsection  (a) of section fifty-six of the internal  revenue code;    (3) "Treatment of certain long-term  contracts"  as  determined  under  paragraph  three  of subsection (a) of section fifty-six of the internal  revenue code;    (4) "Installment  sales  of  certain  property"  as  determined  under  paragraph  six  of  subsection  (a) of section fifty-six of the internal  revenue code;    (5)  "Circulation  expenditures  of  personal  holding  companies"  as  determined  under subparagraph (C) of paragraph two of subsection (b) of  section fifty-six of the internal revenue code;    (6) "Merchant marine capital construction funds" as  determined  under  paragraph  two  of  subsection  (c) of section fifty-six of the internal  revenue code;    (7) "Disallowance  of  passive  activity  loss"  as  determined  under  subsection (b) of section fifty-eight of the internal revenue code; and    (8)  "Adjusted  basis", as it appears in paragraph seven of subsection  (a) of section fifty-six of  the  internal  revenue  code,  but  without  taking  into  account  the  references  therein  to  paragraph  five  of  subsection (a) of section fifty-six of the internal revenue code.    (d) The term "alternative net operating loss deduction" means the  net  operating  loss  deduction  allowed for the taxable year under paragraph  (f) of subdivision nine of this section, except as provided herein.    (1)(A) The net operating loss for any year  beginning  after  nineteen  hundred  eighty-nine  which  is  included  in determining such deduction  shall be determined with the adjustments provided in subparagraph two of  paragraph (a) of this subdivision, and shall be reduced by the items  of  tax  preference  determined  under  subparagraph one of paragraph (a) of  this subdivision, attributable to such year. An item of  tax  preference  shall  be  taken into account only to the extent such item increased the  amount of the net operating loss for the taxable  year  under  paragraph  (f) of subdivision nine of this section.    (B)  In  the  case  of  loss  years  beginning before nineteen hundred  ninety, the amount of the net operating loss which may be  carried  over  to  taxable  years beginning after nineteen hundred eighty-nine shall be  equal to an amount which may be carried from the loss year to the  first  taxable   year   of   the  taxpayer  beginning  after  nineteen  hundred  eighty-nine.    (2) In determining the amount of such  deduction,  loss  carryforwards  and  carrybacks shall, subject to the provisions of subparagraph five of  paragraph (f) of subdivision nine of this section, be  computed  in  the  manner  set  forth  in  paragraph  two  of subsection (b) of section one  hundred seventy-two of the internal revenue code, except that,  for  the  reference  therein  to  taxable  income,  there shall be substituted the  phrase "ninety percent of  minimum  taxable  income  determined  without  regard to the alternative net operating loss deduction".    (3)  The  amount  of such deduction shall not exceed ninety percent of  minimum taxable income determined  without  regard  to  such  deduction,  provided,   however,   the  term  "ninety  percent"  shall  be  read  as"forty-five percent" with respect to taxable years beginning in nineteen  hundred ninety-four.    (e)  The  tax  commission may, whenever necessary in order to properly  reflect the minimum taxable income of any taxpayer, determine  the  year  or  period  in  which any item of income or deduction shall be included,  without regard to the method of accounting employed by the taxpayer.    (f) If the period covered by a report under this article is other than  the  period  covered  by  the  report  to  the  United  States  treasury  department,  the  minimum taxable income shall be appropriately modified  pursuant to regulations promulgated by the tax commission.    9. The term "entire net  income"  means  total  net  income  from  all  sources, which shall be presumably the same as the entire taxable income  (but not alternative minimum taxable income),    (i)  which  the  taxpayer  is  required to report to the United States  treasury department, or    (ii) which the taxpayer would have been  required  to  report  to  the  United  States  treasury department if it had not made an election under  subchapter s of chapter one of the internal revenue code, or    (iii) which the taxpayer, in the case of a corporation which is exempt  from federal income tax (other than the tax on unrelated  business  tax-  able  income imposed under section 511 of the internal revenue code) but  which is subject to tax under this article, would have been required  to  report  to the United States treasury department but for such exemption,  except as hereinafter provided, and subject to any modification required  by paragraphs (d) and (e) of subdivision three of  section  two  hundred  ten of this article.    (a) Entire net income shall not include:    (1)  income,  gains  and  losses  from subsidiary capital which do not  include the amount of a recovery in respect of any war loss  except  for  such  amounts  from  a  former DISC which are treated as business income  under subdivision eight-A of this section,    (2) fifty percent of dividends (A) other than from  subsidiaries,  and  (B)  other  than  amounts  treated  as business income under subdivision  eight-A of this section,  on  shares  of  stock  which  conform  to  the  requirements  of  subsection (c) of section two hundred forty-six of the  internal revenue code.    (3) bona fide gifts,    (4) income and deductions with respect to amounts received from school  districts and from corporations and associations, organized and operated  exclusively for religious, charitable or educational purposes,  no  part  of  the  net  earnings  of  which  inures  to the benefit of any private  shareholder or individual, for the operation of school buses,    (5) (i) any refund or credit of a  tax  imposed  under  this  article,  article  twenty-three,  or article thirty-two of this chapter, for which  tax no exclusion or deduction was allowed in determining the  taxpayer's  entire  net  income under this article, article twenty-three, or article  thirty-two of this chapter for any prior year, (ii) a refund  or  credit  of  general  corporation  tax  allowed  by subdivision eleven of section  11-604 of the administrative code of the city of New York, or (iii)  any  refund   or   credit  of  a  tax  imposed  under  sections  one  hundred  eighty-three, one hundred eighty-three-a, one hundred eighty-four or one  hundred eighty-four-a of this chapter, and    (6) any amount treated as dividends pursuant to section  seventy-eight  of  the  internal  revenue  code  and  not  otherwise  deductible  under  subparagraphs one and two of this paragraph;    (7) that portion of wages  and  salaries  paid  or  incurred  for  the  taxable  year  for  which  a  deduction  is  not allowed pursuant to the  provisions of section two hundred eighty-C of the internal revenue code.(8) in the case of a taxpayer who is separately or as a partner  of  a  partnership  doing  an  insurance  business  as a member of the New York  insurance exchange described in section six thousand two hundred one  of  the  insurance  law, any item of income, gain, loss or deduction of such  business  which  is  the  taxpayer's  distributive or pro rata share for  federal income tax purposes or which the taxpayer is  required  to  take  into account separately for federal income tax purposes.    (9)  for taxable years beginning after December thirty-first, nineteen  hundred eighty-one, except with respect to property which is a qualified  mass commuting vehicle described in subparagraph (D) of paragraph  eight  of  subsection  (f)  of  section one hundred sixty-eight of the internal  revenue  code  (relating  to  qualified  mass  commuting  vehicles)  and  property  of  a  taxpayer principally engaged in the conduct of aviation  (other than air freight forwarders acting as principal and like indirect  air carriers) which is placed in service before taxable years  beginning  in  nineteen  hundred  eighty-nine,  any amount which is included in the  taxpayer's federal taxable income solely as a result of an election made  pursuant to the provisions of such paragraph eight as it was  in  effect  for  agreements  entered  into  prior to January first, nineteen hundred  eighty-four;    (10) for taxable years beginning after December thirty-first, nineteen  hundred eighty-one, except with respect to property which is a qualified  mass commuting vehicle described in subparagraph (D) of paragraph  eight  of  subsection  (f)  of  section one hundred sixty-eight of the internal  revenue  code  (relating  to  qualified  mass  commuting  vehicles)  and  property  of  a  taxpayer principally engaged in the conduct of aviation  (other than air freight forwarders acting as principal and like indirect  air carriers) which is placed in service before taxable years  beginning  in  nineteen  hundred  eighty-nine,  any amount which the taxpayer could  have excluded from federal taxable income had it not made  the  election  provided  for in such paragraph eight as it was in effect for agreements  entered into prior to January first, nineteen hundred eighty-four;    (11)  the  amount  deductible  pursuant  to  paragraph  (j)  of   this  subdivision; and    (12)  upon  the disposition of property to which paragraph (j) of this  subdivision applies, the amount, if any, by which the aggregate  of  the  amounts   described  in  subparagraph  ten  of  paragraph  (b)  of  this  subdivision attributable to such property exceeds the aggregate  of  the  amounts  described  in paragraph (j) of this subdivision attributable to  such property; and    (13) if the added tax provided for in either  (i)  former  subdivision  two  of section one hundred eighty-two of this chapter (relating to real  estate corporations) or (ii) former subdivision  one-a  of  section  two  hundred  nine of this chapter (relating to real estate corporations) has  been imposed upon the taxpayer,  any  income  which  has  been  used  in  computing such tax.    (14)   The  amount  deductible  pursuant  to  paragraph  (l)  of  this  subsection.    (15) In the case of an  attorney-in-fact,  with  respect  to  which  a  mutual  insurance  company,  which  is  an  interinsurer or a reciprocal  insurer and is subject to tax under subdivision (a) of  section  fifteen  hundred  ten  of  this chapter, has made the election provided for under  section eight hundred thirty-five  of  the  Internal  Revenue  Code,  an  amount  equal  to the excess, if any, of the amounts paid or incurred by  such interinsurer or reciprocal insurer  in  the  taxable  year  to  the  attorney-in-fact  over  the  deduction  allowed  to such interinsurer or  reciprocal insurer with respect to  amounts  paid  or  incurred  in  thetaxable  year  to  the  attorney-in-fact  under  subsection  (b) of such  section eight hundred thirty-five of the Internal Revenue Code.    (16) In the case of a taxpayer subject to the modification provided by  subparagraph  sixteen  of  paragraph (b) of this subdivision, the amount  required to be recaptured pursuant to subsection (d) of section  179  of  the  internal  revenue  code  with  respect  to property upon which such  modification was based.    (17) for taxable years  beginning  after  December  thirty-first,  two  thousand  two,  the  amount deductible pursuant to paragraph (o) of this  subdivision.    (b) Entire net income  shall  be  determined  without  the  exclusion,  deduction or credit of:    (1)  the amount of any specific exemption or credit allowed in any law  of the United States imposing any tax on or measured by  the  income  of  corporations,    (2)  any  part of any income from dividends or interest on any kind of  stock, securities or indebtedness, except as provided in clauses (1) and  (2) of paragraph (a) hereof,    (3) taxes on or measured by profits or income paid or accrued  to  the  United  States,  any  of  its  possessions  or  to  any foreign country,  including taxes  in  lieu  of  any  of  the  foregoing  taxes  otherwise  generally  imposed  by  any  foreign country or by any possession of the  United States,    (3-a) taxes on or measured by profits  or  income,  or  which  include  profits  or  income  as a measure, paid or accrued to any other state of  the United States, or any  political  subdivision  thereof,  or  to  the  District  of  Columbia,  including taxes expressly in lieu of any of the  foregoing taxes otherwise generally imposed by any other  state  of  the  United  States, or any political subdivision thereof, or the District of  Columbia;    (4) taxes imposed  under  this  article  and  article  thirty-two  and  sections  one  hundred  eighty-three,  one  hundred  eighty-three-a, one  hundred eighty-four and one hundred eighty-four-a of this chapter,    (4-a)(A) the entire amount allowable as an exclusion or deduction  for  stock  transfer  taxes  imposed  by  article  twelve  of this chapter in  determining the entire taxable income which the taxpayer is required  to  report  to  the United States treasury department but only to the extent  that such taxes are incurred and paid in market making transactions, (B)  in those instances where a credit for the  special  additional  mortgage  recording  tax  credit  is  allowed  under  paragraph (a) of subdivision  seventeen of section two hundred ten of this article, the amount allowed  as an  exclusion  or  deduction  for  the  special  additional  mortgage  recording  tax  imposed  by  subdivision  one-a  of  section two hundred  fifty-three of this chapter in determining  the  entire  taxable  income  which  the  taxpayer is required to report to the United States treasury  department, and (C) unless the credit allowed  pursuant  to  subdivision  seventeen of section two hundred ten of this article is reflected in the  computation  of  the gain or loss so as to result in an increase in such  gain or decrease of such loss, for federal income tax purposes, from the  sale or other disposition of the property  with  respect  to  which  the  special   additional   mortgage   recording   tax  imposed  pursuant  to  subdivision one-a of section two hundred fifty-three of this chapter was  paid, the amount  of  the  special  additional  mortgage  recording  tax  imposed  by subdivision one-a of section two hundred fifty-three of this  chapter which was paid and which is reflected in the computation of  the  basis  of  the  property  so  as to result in a decrease in such gain or  increase in such loss for federal income tax purposes from the  sale  orother  disposition  of  the  property with respect to which such tax was  paid.    (6)  in  the  discretion of the tax commission, any amount of interest  directly or indirectly and  any  other  amount  directly  or  indirectly  attributable  as a carrying charge or otherwise to subsidiary capital or  to income, gains or losses from subsidiary capital.    (7) in the case of a taxpayer who is separately or as a partner  of  a  partnership  doing  an  insurance  business  as a member of the New York  insurance exchange described in section six thousand two hundred one  of  the insurance law, such taxpayer's distributive or pro rata share of the  allocated  entire  net  income  of  such  business  as  determined under  sections fifteen hundred three and fifteen hundred four of this chapter,  provided however, in the event such allocated entire  net  income  is  a  loss,  such taxpayer's distributive or pro rata share of such loss shall  not be subtracted from federal taxable income in  computing  entire  net  income under this subdivision.    (8)  for taxable years beginning after December thirty-first, nineteen  hundred eighty-one, except with respect to property which is a qualified  mass commuting vehicle described in subparagraph (D) of paragraph  eight  of  subsection  (f)  of  section one hundred sixty-eight of the internal  revenue  code  (relating  to  qualified  mass  commuting  vehicles)  and  property  of  a  taxpayer principally engaged in the conduct of aviation  (other than air freight forwarders acting as principal and like indirect  air carriers) which is placed in service before taxable years  beginning  in  nineteen  hundred eighty-nine, any amount which the taxpayer claimed  as a deduction in computing its  federal  taxable  income  solely  as  a  result  of an election made pursuant to the provisions of such paragraph  eight as it was in effect for agreements entered into prior  to  January  first, nineteen hundred eighty-four;    (9)  for taxable years beginning after December thirty-first, nineteen  hundred eighty-one, except with respect to property which is a qualified  mass commuting vehicle described in subparagraph (D) of paragraph  eight  of  subsection  (f)  of  section one hundred sixty-eight of the internal  revenue  code  (relating  to  qualified  mass  commuting  vehicles)  and  property  of  a  taxpayer principally engaged in the conduct of aviation  (other than air freight forwarders acting as principal and like indirect  air carriers) which is placed in service before taxable years  beginning  in  nineteen  hundred  eighty-nine,  any amount which the taxpayer would  have been required to include in the computation of its federal  taxable  income had it not made the election permitted pursuant to such paragraph  eight  as  it was in effect for agreements entered into prior to January  first, nineteen hundred eighty-four;    (10) in the case of  property  placed  in  service  in  taxable  years  beginning   before  nineteen  hundred  ninety-four,  for  taxable  years  beginning after  December  thirty-first,  nineteen  hundred  eighty-one,  except with respect to property subject to the provisions of section two  hundred  eighty-F  of the internal revenue code, property subject to the  provisions of section one hundred sixty-eight of  the  internal  revenue  code which is placed in service in this state in taxable years beginning  after  December  thirty-first, nineteen hundred eighty-four and property  of a taxpayer principally engaged in the conduct of aviation (other than  air freight  forwarders  acting  as  principal  and  like  indirect  air  carriers)  which  is placed in service before taxable years beginning in  nineteen  hundred  eight-nine,  the  amount  allowable  as  a  deduction  determined under section one hundred sixty-eight of the internal revenue  code;    (11)  upon  the disposition of property to which paragraph (j) of this  subdivision applies, the amount, if any, by which the aggregate  of  theamounts  described  in  such paragraph (j) attributable to such property  exceeds the aggregate of the amounts described in  subparagraph  ten  of  this paragraph attributable to such property.    (15)  Real  property taxes paid on qualified agricultural property and  deducted in determining federal taxable income, to  the  extent  of  the  amount of the agricultural property tax credit allowed under subdivision  twenty-two of section two hundred ten of this article.    (16)  In  the  case  of  a taxpayer which is not an eligible farmer as  defined in paragraph  (b)  of  subdivision  twenty-two  of  section  two  hundred  ten  of  this  article,  the  amount  of  any deduction claimed  pursuant to section 179 of the internal revenue code with respect  to  a  sport  utility vehicle which is not a passenger automobile as defined in  paragraph 5 of subsection (d) of section 280F of  the  internal  revenue  code.    (17)  for  taxable  years  beginning  after December thirty-first, two  thousand two, in the case of qualified property described  in  paragraph  two  of  subsection k of section 168 of the internal revenue code, other  than qualified resurgence zone property described in  paragraph  (q)  of  this  subdivision,  and  other  than  qualified  New  York  Liberty Zone  property described in paragraph two of subsection b of section 1400L  of  the  internal revenue code (without regard to clause (i) of subparagraph  (C) of such paragraph), which was placed in service  on  or  after  June  first,  two  thousand  three,  the amount allowable as a deduction under  section 167 of the internal revenue code.    (18) Premiums paid for environmental remediation insurance, as defined  in section twenty-three of this chapter,  and  deducted  in  determining  federal taxable income, to the extent of the amount of the environmental  remediation insurance credit allowed under such section twenty-three and  subdivision thirty-five of section two hundred ten of this article.    (19)  The  amount  of  any  deduction  allowed pursuant to section one  hundred ninety-nine of the internal revenue code.    (20) The amount of any  federal  deduction  for  taxes  imposed  under  article twenty-three of this chapter.    (c)  Entire  net  income  shall  include income within and without the  United States;    (c-1)(1) Notwithstanding any other provision of this article,  in  the  case  of a taxpayer which is a foreign air carrier holding a foreign air  carrier permit issued by the United States department of  transportation  pursuant  to  section  four  hundred  two of the federal aviation act of  nineteen hundred fifty-eight, as amended, and which is  qualified  under  subparagraph two of this paragraph, entire net income shall not include,  and  shall  be  computed  without  the deduction of, amounts directly or  indirectly  attributable  to,  (i)   any   income   derived   from   the  international  operation  of aircraft as described in and subject to the  provisions of section eight hundred eighty-three of the internal revenue  code, (ii) income without the United States which is  derived  from  the  operation  of aircraft, and (iii) income without the United States which  is of a type described in  subdivision  (a)  of  section  eight  hundred  eighty-one  of  the internal revenue code except that it is derived from  sources without the United  States.  Entire  net  income  shall  include  income  described in clauses (i), (ii) and (iii) of this subparagraph in  the case of taxpayers not described in the previous sentence.    (2) A taxpayer is qualified under this subparagraph  if  air  carriers  organized  in  the United States and operating in the foreign country or  countries in which the taxpayer has its major base of operations and  in  which  it  is  organized,  resident or headquartered (if not in the same  country as its major base of operations) are not subject to  any  income  tax  or  other tax based on or measured by income or receipts imposed bysuch foreign country or countries or any political subdivision  thereof,  or  if  so  subject to such tax, are provided an exemption from such tax  equivalent to that provided for herein.    (c-2)  Adjustments by qualified public utilities. (1) In the case of a  taxpayer which is a qualified public utility, entire net income shall be  computed with the adjustments set forth in this paragraph.    (2) Definitions. (A) Qualified public  utility.  The  term  "qualified  public  utility"  means  a taxpayer which: (i) on December thirty-first,  nineteen hundred ninety-nine, was subject to the ratemaking  supervision  of  the state department of public service, and (ii) for the year ending  on December thirty-first, nineteen hundred ninety-nine, was  subject  to  tax under former section one hundred eighty-six of this chapter.    (B) Transition property. The term "transition property" means property  placed  in  service  by the taxpayer before January first, two thousand,  for which a depreciation deduction is allowed under section one  hundred  sixty-seven of the internal revenue code.    (3)  Federal  depreciation  disallowed.  With  respect  to  transition  property, the deduction for federal income tax purposes for depreciation  shall not be allowed.    (4) New York depreciation. With  respect  to  transition  property,  a  deduction  shall  be  allowed  for the depreciation expense shown on the  books and records of the taxpayer for the taxable year and determined in  accordance with generally accepted accounting principles.    (5) Regulatory assets.  A  deduction  shall  be  allowed  for  amounts  recognized  as  expense on the books and records of the taxpayer for the  taxable year, which amounts  were  recognized  as  expense  for  federal  income  tax  purposes  in  a  taxable  year ending on or before December  thirty-first, nineteen hundred  ninety-nine,  where:  (A)  such  amounts  represent  expenditures  which,  when  made,  were charged to a deferred  debit account or similar asset account on the books and records  of  the  taxpayer,  and  where  (B)  the  recognition of expense on the books and  records of the taxpayer is matched by revenue stemming from a  procedure  or  adjustment allowing the recovery of such expenditures, and where (C)  such revenue is recognized  for  federal  income  tax  purposes  in  the  taxable year.    (6)  Basis for gain or loss. (A) Recognition transactions. (i) General  rule - book basis. Except as provided in subclause (ii) of this  clause,  where  transition  property  is  sold  or  otherwise  disposed of in the  taxable year in a transaction of the type requiring recognition of  gain  or  loss  for federal income tax purposes, the basis for determining the  amount of such gain or loss under this article shall be the cost of  the  property less the accumulated depreciation on the property determined on  the  books  and  records  of  the  taxpayer in accordance with generally  accepted accounting principles.    (ii) Qualified gain - New York basis.  Where  a  sale  or  disposition  described in subclause (i) of this clause results in recognition of gain  for  federal  income tax purposes, and where either (I) such recognition  occurs in a taxable year ending after nineteen hundred  ninety-nine  and  before  two  thousand ten, or (II) such recognition is with respect to a  nuclear electric generating facility,  the  basis  for  determining  the  amount of such gain under this article shall be the cost of the property  less  the  aggregate  of  the  New  York  depreciation deductions on the  property determined under subparagraph four of this paragraph.    (iii) No conversion of gain to loss.  In  the  event  that  the  basis  determined  under subclause (ii) of this clause results in determination  of a loss on the sale or disposition of the property, no  gain  or  loss  shall  be  recognized  under  this  article with respect to such sale or  disposition.(B)  Nonrecognition  transactions.  (i)  Carryover  basis.  (I)  where  transition  property  is  disposed  of  ("original  disposition")  in  a  transaction of a type requiring deferral of recognition of gain or  loss  for  federal  income  tax purposes, and where (II) there is a subsequent  recognition  of  gain or loss for federal income tax purposes ("clause B  gain or loss"), the amount of which is determined by reference, in whole  or in part, to  the  basis  of  such  transition  property  ("underlying  transition  property"),  then  (III) the amount of such clause B gain or  loss under this article shall be adjusted as provided in subclause  (ii)  or (iii) of this clause.    (ii)  General  rule  -  book  basis  adjustment. Except as provided in  subclause (iii) of this clause, the amount of clause  B  gain  shall  be  reduced,  or  the  amount  of  clause B loss increased, by the amount by  which the book basis of the underlying transition property on  the  date  of  original  disposition  (determined using the provisions of subclause  (i) of clause (A) of this subparagraph) exceeds the federal  income  tax  basis of such property on such date.    (iii)  Qualified gain - New York basis adjustment. Where clause B gain  either (I) occurs in  a  taxable  year  ending  after  nineteen  hundred  ninety-nine  and  before  two thousand ten, or (II) is with respect to a  nuclear electric generating facility, the amount of such gain under this  article shall be reduced, but not below zero, by the amount by which the  New York basis of the underlying transition  property  on  the  date  of  original  disposition (determined using the provisions of subclause (ii)  of clause (A) of this subparagraph) exceeds the federal income tax basis  of such property on such date.    (iv) Application to replacement  property  and  transferee  taxpayers.  This  clause  shall apply whether the clause B gain or loss: (I) is with  respect to either transition property or depreciable property the  basis  of  which  is determined by reference to transition property, or (II) is  recognized by either a qualified public utility or by a  taxpayer  which  is  a  transferee of transition property (whether or not such transferee  is a qualified public utility, notwithstanding subparagraph one of  this  paragraph).    (c-3)  Depreciation  adjustments  by  qualified  power  producers  and  pipeline companies. (1) In the case of a qualified taxpayer, entire  net  income  shall be computed with the depreciation adjustments set forth in  this paragraph.    (2) Definitions. (A) Qualified taxpayer. The term "qualified taxpayer"  means a qualified power producer or a qualified pipeline.    (B) Qualified power producer.  The  term  "qualified  power  producer"  means  a  taxpayer which: (i) on December thirty-first, nineteen hundred  ninety-nine, was not subject to the ratemaking supervision of the  state  department  of  public service, and (ii) for the year ending on December  thirty-first, nineteen hundred ninety-nine, was  subject  to  tax  under  former  section one hundred eighty-six of this chapter on account of its  being principally engaged in the business of supplying electricity.    (C) Qualified pipeline. The term "qualified pipeline" means a taxpayer  which: (i) on December thirty-first, nineteen hundred  ninety-nine,  was  subject  to  the  ratemaking  supervision  of  either the federal energy  regulatory commission or the state department  of  public  service,  and  (ii)  for  the  year  ending  on December thirty-first, nineteen hundred  ninety-nine, was subject to tax under sections one hundred  eighty-three  and  one  hundred  eighty-four  of  this chapter on account of its being  principally engaged in the business of pipeline transmission.    (D) Transition property. The term "transition property" means property  placed in service by a qualified  taxpayer  before  January  first,  twothousand,  for  which  a depreciation deduction is allowed under section  one hundred sixty-seven of the internal revenue code.    (3)  Federal  depreciation  disallowed.  With  respect  to  transition  property, the deduction for federal income tax purposes for depreciation  shall not be allowed.    (4) New York depreciation. With  respect  to  transition  property,  a  deduction  shall  be  allowed  for  the depreciation expense computed as  provided in this subparagraph. (A) All transition property shown on  the  books  and  records of the taxpayer on January first, two thousand shall  be treated as a single asset placed in service on  such  date.  The  New  York  basis for purposes of computing the depreciation deduction on such  single asset shall be the net book value  of  such  transition  property  determined  on  the  first day of the federal taxable year ending in two  thousand (or on the date any such property  is  placed  in  service,  if  later) adjusted as provided in clause (B) of this subparagraph.    (B)  If  transition property is sold or otherwise disposed of, the New  York basis of the single asset shall be reduced on the date of such sale  or disposition by the amount of the adjusted federal tax basis  of  such  property on such date.    (C)  The  New York depreciation deduction allowed for any taxable year  with  respect  to  such  single  asset  shall  be  computed  using   the  straight-line method, a twenty-year life, and a salvage value of zero.    (D) For purposes of this subparagraph, the term "net book value" means  cost  reduced by accumulated depreciation shown on the books and records  of the taxpayer and  determined,  in  the  case  of  a  qualified  power  producer,  in  accordance with generally accepted accounting principles;  and in the  case  of  a  qualified  pipeline,  in  accordance  with  the  taxpayer's  regulatory  reports filed with the federal energy regulatory  commission or state department of public service.    (d) The tax commission may, whenever necessary in  order  properly  to  reflect  the  entire  net  income of any taxpayer, determine the year or  period in which any item of  income  or  deduction  shall  be  included,  without regard to the method of accounting employed by the taxpayer;    (e)  The  entire net income of any bridge commission created by act of  congress to construct a bridge across an  international  boundary  means  its  gross  income  less  the  expense  of maintaining and operating its  properties, the annual interest upon its bonds  and  other  obligations,  and the annual charge for the retirement of such bonds or obligations at  maturity;    (f)  A  net  operating  loss deduction shall be allowed which shall be  presumably the same as the net operating loss  deduction  allowed  under  section  one  hundred seventy-two of the internal revenue code, or which  would have been allowed if the taxpayer had not made an  election  under  subchapter s of chapter one of the internal revenue code, except that in  every instance where such deduction is allowed under this article:    (1)  any  net  operating  loss  included in determining such deduction  shall be adjusted to reflect the inclusions and exclusions  from  entire  net income required by paragraphs (a), (b) and (g) hereof,    (2)  such deduction shall not include any net operating loss sustained  during any taxable year  beginning  prior  to  January  first,  nineteen  hundred  sixty-one, or during any taxable year in which the taxpayer was  not subject to the tax imposed by this article,    (3) such deduction shall not exceed the deduction for the taxable year  allowed under section one hundred seventy-two of  the  internal  revenue  code,  or  the  deduction  for  the  taxable  year which would have been  allowed if the taxpayer had not made an election under subchapter  s  of  chapter one of the internal revenue code,(4)  in the case of a New York S corporation, such deduction shall not  include any net operating loss sustained during a New  York  C  year  or  during a New York S year beginning prior to nineteen hundred ninety, and  in  the  case  of  a  New  York  C corporation, such deduction shall not  include  any  net  operating  loss  sustained  during a New York S year,  provided, however, a New York S year shall be treated as a taxable  year  for  purposes  of determining the number of taxable years to which a net  operating loss may be carried back or carried forward, and    (5) the net operating loss deduction allowed under section one hundred  seventy-two of the internal revenue code  shall  for  purposes  of  this  paragraph  be  determined  as  if  the  taxpayer  had elected under such  section to relinquish the entire carryback period with  respect  to  net  operating  losses, except with respect to the first ten thousand dollars  of each of such losses, sustained during taxable years ending after June  thirtieth, nineteen hundred eighty-nine.    (g) For taxable years commencing  prior  to  January  first,  nineteen  hundred eighty-seven, at the election of the taxpayer, a deduction shall  be allowed for expenditures paid or incurred during the taxable year for  the  construction,  reconstruction,  erection  or  improvement of either  industrial  waste  treatment  facilities  or   air   pollution   control  facilities,  or,  with  respect  to  taxable years beginning on or after  January first, nineteen hundred seventy-seven and before January  first,  nineteen  hundred  eighty-one,  industrial  waste  treatment  controlled  process facilities or air pollution controlled process facilities.    (1) (A) (1) The term "industrial  waste  treatment  facilities"  shall  mean  facilities  for  the treatment, neutralization or stabilization of  industrial waste and other wastes (as the terms "industrial  waste"  and  "other  wastes"  are  defined  in  section  17-0105 of the environmental  conservation law) from a point immediately preceding the point  of  such  treatment,  neutralization  or  stabilization  to the point of disposal,  including the necessary pumping and transmitting facilities.    (2) The term "industrial waste treatment controlled process  facility"  shall mean such portion of the cost of an industrial production facility  designed  for  the  purpose  of  obviating the need for industrial waste  treatment facilities as defined in item one  of  this  clause  as  shall  exceed the cost of an industrial production facility of equal production  capacity  which  if constructed would require industrial waste treatment  facilities to meet emission standards in compliance with the  provisions  of the environmental conservation law and the codes, rules, regulations,  permits  or orders issued pursuant thereto but only to the extent of the  cost of such industrial waste treatment facilities.    (B) (1)  The  term  "air  pollution  control  facilities"  shall  mean  facilities which remove, reduce, or render less noxious air contaminants  emitted from an air contamination source (as the terms "air contaminant"  and  "air  contamination  source"  are defined in section 19-0107 of the  environmental conservation law) from a point immediately  preceding  the  point  of such removal, reduction or rendering to the point of discharge  of air, meeting emission standards as established by the  department  of  environmental  conservation, but excluding such facilities installed for  the primary purpose of salvaging  materials  which  are  usable  in  the  manufacturing  process  or are marketable and excluding those facilities  which rely for their efficacy on dilution, dispersion or assimilation of  air contaminants in the ambient air  after  emission.  Such  term  shall  further  include flue gas desulfurization equipment and attendant sludge  disposal facilities, fluidized bed boilers, precombustion coal  cleaning  facilities  or  other  facilities that conform with this subdivision and  which comply with the provisions of the state  acid  deposition  controlact  set  forth  in  title nine of article nineteen of the environmental  conservation law.    (2)  The  term  "air pollution controlled process facility" shall mean  such portion of the cost of an industrial production  facility  designed  for  the  purpose  of  obviating  the  need  for  air  pollution control  facilities as defined in item one of this clause  as  shall  exceed  the  cost  of  an industrial production facility of equal productive capacity  which if constructed would require air pollution control  facilities  to  inert  emission  standards  as  established  pursuant  to title three of  article nineteen of the environmental conservation law but only  to  the  extent of the cost of such air pollution control facilities.    (2) However, such deduction shall be allowed only    (A)  with  respect to tangible property which is depreciable, pursuant  to section one hundred sixty-seven of the internal revenue code,  having  a  situs in this state and used in the taxpayer's trade or business, the  construction, reconstruction, erection or improvement of which,  in  the  case  of industrial waste treatment facilities, is initiated on or after  January first, nineteen hundred sixty-five or which, in the case of  air  pollution  control  facilities,  is initiated on or after January first,  nineteen hundred sixty-six, or which in the  case  of  industrial  waste  treatment  controlled  process  facilities  or  air pollution controlled  process facilities is initiated on and  after  January  first,  nineteen  hundred seventy-seven, and    (B) on condition that such facilities have been certified by the state  commissioner   of   environmental   conservation   or   his   designated  representative,  pursuant  to  section  19-0309  of  the   environmental  conservation  law,  as  complying  with  applicable  provisions  of  the  environmental  conservation  law,  the  public  health  law,  the  state  sanitary  code  and  codes, rules, regulations, permits or orders issued  pursuant thereto, and    (C) on condition that entire net income for the taxable year  and  all  succeeding  taxable  years  be  computed without any deductions for such  expenditures or for depreciation or amortization of  the  same  property  other  than  the deductions allowed by this paragraph (g), except to the  extent that the basis of the property may  be  attributable  to  factors  other  than  such  expenditures,  or  in  case  a deduction is allowable  pursuant to this paragraph for only a  part  of  such  expenditures,  on  condition that any deduction allowed for federal income tax purposes for  such  expenditures  or  for  depreciation  or  amortization  of the same  property be proportionately reduced in computing entire net  income  for  the taxable year and all succeeding taxable years, and    (D)  where  the  election provided for in paragraph (d) of subdivision  three of section two hundred ten of this chapter has not been  exercised  in respect to the same property.    (3)  (A)  If  expenditures in respect to an industrial waste treatment  facility,  an  air  pollution  control  facility,  an  industrial  waste  treatment  controlled  process  facility  or an air pollution controlled  process facility have been deducted as provided herein and if within ten  years from the end of the taxable  year  in  which  such  deduction  was  allowed  such  property  or  any  part  thereof  is used for the primary  purpose of salvaging materials which are  usable  in  the  manufacturing  process  or are marketable, the taxpayer shall report such change of use  in its report for the first taxable year during which it occurs, and the  tax commission may recompute the tax for the year  or  years  for  which  such  deduction was allowed and any carryback or carryover year, and may  assess any additional tax resulting from such recomputation  within  the  time  fixed  by  paragraph nine of subsection (c) of section ten hundred  eighty-three of this chapter.(B) If a deduction is allowed as herein provided for expenditures paid  or incurred during  any  taxable  year  on  the  basis  of  a  temporary  certificate   of   compliance   issued  pursuant  to  the  environmental  conservation law and  if  the  taxpayer  fails  to  obtain  a  permanent  certificate of compliance upon completion of the facilities with respect  to  which  such  temporary  certificate  was  issued, the taxpayer shall  report such failure in its report for the taxable year during which such  facilities are completed, and the tax commission may recompute  the  tax  for  the  year  or  years  for  which such deduction was allowed and any  carryback or carryover year, and may assess any additional tax resulting  from in such recomputation within the time fixed by  paragraph  nine  of  subsection (c) of section ten hundred eighty-three.    (C) If a deduction is allowed as herein provided for expenditures paid  or  incurred  during  any  taxable  year  in respect to an air pollution  control facility on the basis of  a  certificate  of  compliance  issued  pursuant  to  the  environmental conservation law and the certificate is  revoked  pursuant  to  subdivision  three  of  section  19-0309  of  the  environmental conservation law, the tax commission may recompute the tax  for  the  year  or  years  for  which  the facility is not or was not in  compliance  with  the  applicable  provisions   of   the   environmental  conservation  law, the state sanitary code or codes, rules, regulations,  permits  or  orders  promulgated  pursuant  thereto,  and  for  which  a  deduction was allowed, as well as for any carryback or carryover year to  which  such  deduction  was  carried,  and may assess any additional tax  resulting from such recomputation within the  time  fixed  by  paragraph  nine of subsection (c) of section ten hundred eighty-three.    (4)  In  any  taxable year when property is sold or otherwise disposed  of, with respect to which a deduction has been allowed pursuant to  this  paragraph,  such  deduction  shall  be  disregarded in computing gain or  loss, and the gain or loss on the sale  or  other  disposition  of  such  property  shall  be  the  gain  or loss entering into the computation of  entire taxable income which the taxpayer is required to  report  to  the  United States treasury department for such taxable year.    (h) If the period covered by a report under this article is other than  the  period  covered  by  the  report  to  the  United  States  treasury  department,    (1) except as provided in subparagraph two hereof, entire  net  income  shall  be  determined by multiplying the taxable income reported to such  department (as adjusted pursuant to the provisions of this  article)  by  the  number  of  calendar  months  or major parts thereof covered by the  report under this article and dividing by the number of calendar  months  or  major  parts thereof covered by the report to such department. If it  shall appear that such method of determining entire net income does  not  properly  reflect the taxpayer's income during the period covered by the  report under this article, the tax commission shall be authorized in its  discretion to determine such entire net income solely on  the  basis  of  the taxpayer's income during the period covered by its report under this  article;    (2)  in the case of a New York S termination year, an equal portion of  entire net income shall be assigned  to  each  day  of  such  year.  The  portion  of  such entire net income thereby assigned to the S short year  and the C short year shall be included in the respective reports for the  S short year and the C short year under  this  article.  However,  where  paragraph  three of subsection (s) of section six hundred twelve of this  chapter applies, the portion of such entire net income assigned to the S  short year and the C short year shall be  determined  under  normal  tax  accounting rules.(i)  With respect to a DISC which during any taxable year or reporting  year (1) received more than five percent of its  gross  sales  from  the  sale  of  inventory  or  other  property  which  it  purchased  from its  stockholders, (2) received more than five percent of its  gross  rentals  from  the  rental  of  property  which  it  purchased or rented from its  stockholders or (3)  received  more  than  five  percent  of  its  total  receipts  other  than  sales  and  rentals  from  its  stockholders, the  following provisions shall apply.    (A) For any taxable year in which sub-paragraph (B) of this  paragraph  is  in  effect  and  not rendered invalid, a DISC meeting the above test  shall be exempt from all taxes imposed by this article.    (B) Supplemental to the provisions of subdivision five of section  two  hundred  eleven  of this article, any taxpayer required to compute a tax  under this article, which during the taxable year being reported  was  a  stockholder  in  any DISC meeting the test prescribed in this paragraph,  shall for any taxable year ending after December thirty-first,  nineteen  hundred  seventy-one  adjust each item of its receipts, expenses, assets  and liabilities, as otherwise computed under  this  article,  by  adding  thereto  its  attributable share of each such DISC's receipts, expenses,  assets and liabilities as reportable by each such  DISC  to  the  United  States Treasury Department for its annual reporting period ending during  the  current  taxable year of such taxpayer; provided, however, (1) that  all transactions between the  taxpayer  and  each  such  DISC  shall  be  eliminated  from  the taxpayer's adjusted receipts, expenses, assets and  liabilities; (2) that the taxpayer's  entire  net  income  as  otherwise  computed  under this section, shall be reduced by subtracting the amount  of the deemed distribution of current income, if  any,  from  each  such  DISC  already  included  in  the  entire  net income of such taxpayer by  virtue of having been included in its entire  taxable  income  for  that  taxable  year  as reported to the United States Treasury Department; and  (3) that in the event this paragraph should  be  rendered  invalid,  all  DISC's  and  their stockholders taxable hereunder shall be taxed instead  under the remaining portions of this article.    (j) in the case  of  property  placed  in  service  in  taxable  years  beginning   before  nineteen  hundred  ninety-four,  for  taxable  years  beginning after  December  thirty-first,  nineteen  hundred  eighty-one,  except with respect to property subject to the provisions of section two  hundred  eighty-F  of  the internal revenue code and property subject to  the provisions of  section  one  hundred  sixty-eight  of  the  internal  revenue  code  which is placed in service in this state in taxable years  beginning after December thirty-first, nineteen hundred eighty-four, and  provided a deduction has  not  been  excluded  from  entire  net  income  pursuant  to  subparagraph eight of paragraph (b) of this subdivision, a  taxpayer shall be allowed with respect to property which is  subject  to  the  provisions  of  section  one  hundred  sixty-eight  of the internal  revenue code the depreciation  deduction  allowable  under  section  one  hundred  sixty-seven  of the internal revenue code as such section would  have applied to property placed in  service  on  December  thirty-first,  nineteen hundred eighty. This paragraph shall not apply to property of a  taxpayer  principally engaged in the conduct of aviation (other than air  freight forwarders acting as principal and like indirect  air  carriers)  which  is  placed  in service before taxable years beginning in nineteen  hundred eighty-nine.    (k) QSSS. (1) New York S corporation. In the case  of  a  New  York  S  corporation  which  is the parent of a qualified subchapter S subsidiary  (QSSS) with respect to a taxable year:    (A) where the QSSS is not an excluded corporation,(i) in determining the entire net income of such  parent  corporation,  all  assets,  liabilities,  income  and  deductions of the QSSS shall be  treated as assets, liabilities, income  and  deductions  of  the  parent  corporation, and    (ii)  the QSSS shall be exempt from all taxes imposed by this article,  and    (B) where the QSSS is an excluded corporation, the entire  net  income  of  the  parent  corporation  shall be determined as if the federal QSSS  election had not been made.    (2) New York C corporation. In the case of a New  York  C  corporation  which is the parent of a QSSS with respect to a taxable year:    (A) where the QSSS is a taxpayer,    (i)  in  determining the entire net income of such parent corporation,  all assets, liabilities, income and deductions  of  the  QSSS  shall  be  treated  as  assets,  liabilities,  income  and deductions of the parent  corporation, and    (ii) the QSSS shall be exempt from all taxes imposed by this  article,  and    (B) where the QSSS is not a taxpayer,    (i) if the QSSS is not an excluded corporation, the parent corporation  may  make  a QSSS inclusion election to include all assets, liabilities,  income and deductions of the QSSS as  assets,  liabilities,  income  and  deductions of the parent corporation, and    (ii) in the absence of such election, or where the QSSS is an excluded  corporation,  the  entire  net income of the parent corporation shall be  determined as if the federal QSSS election had not been made.    (3) Non-New York S corporation not excluded.  In  the  case  of  an  S  corporation which is not a taxpayer and not an excluded corporation, and  which  is  the parent of a QSSS which is a taxpayer, the shareholders of  the parent corporation shall be entitled to make the New York S election  under subsection (a) of section six hundred sixty of this chapter.    (A) For any taxable year for which such election  is  in  effect,  the  parent  corporation  shall be subject to tax under this article as a New  York S corporation, and the provisions of clause (A) of subparagraph one  of this paragraph shall apply.    (B) For any taxable year for which such election is not in effect, the  QSSS shall be a New York C corporation, and the entire net income of the  QSSS shall be determined as if the federal QSSS election  ha