N.Y. Comp. Codes R. & Regs. Tit. 20 §§ 4-4.1

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

Section 4-4.1 - Definitions

(Tax Law, section 210-A(10))

For purposes of this Subpart, the following terms shall have the meanings indicated below.

(a) Consumer means an individual or entity whose location is where the business customer derives value from the service or other business activity provided by the corporation.

(b) Customer means the party who enters into a transaction with the corporation for the purchase of a service or other business activity from the corporation. A customer can be an individual customer, a business customer or a passive investment customer. In any instance in which the corporation, acting in good faith, cannot reasonably determine whether the customer is an individual customer, the corporation must treat the customer as a business customer.

(1) Individual customer means a customer who enters into a transaction with the corporation for the purchase of a service or other business activity from the corporation for personal use, and not for a business purpose.

(2) Business customer means a customer that is not an individual customer or passive investment customer, including, but not limited to, a sole proprietor, S corporation, limited liability company, limited partnership, limited liability partnership, general partnership, corporation, non-profit organization, trust, the U.S. Government, any foreign, state, or local government, or any agency or instrumentality of such government.

(3) Passive investment customer means a customer that is an entity, such as a company or corporation (other than a publicly traded corporation), limited partnership, general partnership, limited liability company, limited liability partnership, or trust, that pools capital from passive investors for the purpose of trading or making investments in stocks, bonds, securities, commodities, loans, or other financial assets, but that does not otherwise conduct a trade or business. Passive investment customer does not include an investment company as defined in section 210-A(5)(d).

(c) Intermediary transaction means a transaction where the business customer derives value from a service or other business activity at the location of the consumer rather than the location of the business customer itself. Such transaction is apportioned using the rules for intermediary transactions in section 4-4.8 of this Subpart. Intermediary transactions do not include services or activities apportioned under the special rules in section 4-4.3 of this Subpart.

(1) To be considered an intermediary transaction, the service or other business activity, pursuant to the explicit or implicit terms of a contract or other agreement between the corporation and business customer, must meet the requirements of subparagraphs (i) or (ii) of this paragraph.

(i) it must be provided by the corporation, at the direction of the business customer, directly to the consumer;

(ii) it must be sold by the corporation to the business customer, who then passes on the service or other business activity to the consumer, provided the corporation must be obligated under the agreement to perform a substantial portion of the service or other business activity after the property that the service or other business activity relates to is delivered by the business customer to the consumer.

(d) Location where a contract is managed by the customer means the primary location at which an employee or other representative of a customer serves as the person with responsibility for monitoring or managing the day-to-day execution of the contract of sale with the corporation.

N.Y. Comp. Codes R. & Regs. Tit. 20 §§ 4-4.1

Adopted New York State Register December 27, 2023/Volume XLV, Issue 52, eff. 12/27/2023