Beginning in October 2015, the New York State Department of Taxation and Finance has been releasing draft regulations that will implement New York’s extensive corporate franchise tax reform. The initial draft regulations addressed three topics: nexus, sourcing of other services and other business receipts, and sourcing of receipts from sales of digital products.
The draft nexus regulations incorporate the new tax law’s economic nexus provisions. (See N.Y. Tax Law Section 209.1(a).) The draft sourcing regulations implement the market-based sourcing hierarchies contained within the Tax Law for other service receipts and other business receipts and receipts from sales of digital products. (See N.Y. Tax Law Sections 210-A(4) and 201-A(10)).
Maria Eberle and Lindsay LaCava examine the most significant aspects of the draft nexus and sourcing regulations and compare New York’s new sourcing provisions for general services to California’s market based sourcing regime and the Multistate Tax Commission’s draft market-sourcing regulation in their article, New York’s ‘Reformed’ Regulations. This article originally appeared in the December 18, 2015 issue of Bloomberg BNA’s Tax Management Weekly State Tax Report, and is also available under publications at www.bakermckenzie.com.
This article was originally published in the February 2016 edition of Tax News and Developments (Volume XIV, Issue 1) and is available under insights at www.bakermckenize.com.