Instructions For Form Nyc-204 -Partnership Return

Instructions for Form NYC-204 - 2010

Page 12

Department of Finance requires an alternative

Those companies using weighted factors must make

any amount payable as additional rent or

method to be used in order to fairly and equi-

the adjustments on Schedule E described below:

in lieu of rent, such as interest, taxes, in-

tably reflect the partnership’s business income

surance, repairs or any other amount re-

Taxpayers utilizing the weighted factors

in the City.

quired to be paid by the terms of a lease

should not complete lines 3b and 4.

or other agreement; and

ALTERNATIVE ALLOCATION METHOD

After the business allocation percentage is

that proportion of the cost of any im-

If you believe that the methods of allocation

computed, multiply Schedule A, line 4 by the

provement to the real property made by

described above do not fairly and equitably re-

business allocation percentage to determine the

or on behalf of the business which re-

flect income from New York City, you may re-

amount allocated to New York City.

verts to the owner or lessor upon termi-

quest the Department’s consent to use an

nation of a lease or other agreement.

alternative method when filing this return. To

Double Weighting for Manufacturers.

If a building is erected on land leased by or on

make that request, you must check the appro-

For taxable years beginning after 6/30/96, a manu-

behalf of the business, the value of the building

priate box on page 1, complete Schedule E,

facturing business may elect to use a double-

is determined in the same manner as if it were

Part 3, and explain your proposed alternative

weighted gross income factor. An election must be

owned by the business. The value of the un-

allocation method in a rider. This explanation

made on a timely filed original return and is made

derlying land is determined by multiplying the

must provide full information regarding the

by entering on line 3b the amount from line 3a. If

gross annual ground rent by eight. Enter the

nature and scope of the business activities car-

you make this election, complete lines 4a and 4b.

value of rented real property located within

ried on within and without New York City and

See the instructions for these lines below. If you

New York City in column A and the value of

provide complete details of how the method

do not wish to make the election, do not enter an

all rented real property in column B.

you propose would allocate income on a more

amount on line 3b and use the weighted factor

equitable basis than the statutory method. In-

allocation method described above. For purposes

LINE 1c - TANGIBLE PERSONAL

clude a computation of tax due using the al-

of this election, a manufacturing business is an un-

PROPERTY OWNED

ternative method. In addition, at the time of

incorporated business primarily engaged in the

Enter in column A the average value of tangible

filing the return, you must pay the tax in ac-

manufacturing and sale of tangible personal prop-

personal property located within New York City.

cordance with the formula basis set out in

erty. Manufacturing includes assembly, working

Enter in column B the average value of all tan-

Schedule E, Part 3. If the Department consents

raw materials into wares, and giving new shapes,

gible personal property connected with the busi-

to your proposed alternative allocation method

qualities or combinations to matter that has already

ness, both inside and outside New York City.

and it results in a lower tax liability than the

gone through some artificial process, through the

formula basis set out in Schedule E, you may

use of machinery, tools, appliances or other similar

The average value of the property is deter-

be entitled to a refund of the excess amount

equipment. An entity is primarily engaged in man-

mined by adding:

you have paid.

ufacturing if more than 50% of its gross receipts for

its value at the beginning of the taxable

the year are attributable to manufacturing.

If the partnership directly carried on more than one

year, and

business for which an alternative allocation method

The three factors are described below in the in-

its value at the end of the taxable year,

is required, a similar statement must be prepared

structions for lines 1a, 1b, 1c, 1d, 2, 3a and 3b.

and dividing the sum by two.

for each business and attached to the return.

Complete lines 1a, 1b, 1c, and 1d of Schedule

E to determine the average value of real and

Securities and commodities brokers should

LINE 1d - TANGIBLE PERSONAL

tangible personal property of the business.

refer to 19 RCNY Section 28-07(h) for special

PROPERTY RENTED FROM OTHERS

rules for allocating commissions, manager

For tax years beginning on or after January 1,

LINE 1a - REAL PROPERTY OWNED

fees, primary spreads, and selling concessions.

2005, rented tangible personal property must

Enter in column A the average value of real

be included in the property factor. The value

property located within New York City. Enter in

SCHEDULE E, PARTS 1 AND 2

of the rented tangible personal property to be

column B the average value of real property

included in line 1d is eight times the gross rent

Enter the information requested in parts 1 and 2,

connected with the business, both inside and

payable for the tangible personal property dur-

all columns.

Indicate in the “rent” column

outside New York City. For this purpose, prop-

ing the tax year.

whether you own or rent the premises listed.

erty connected with the business does not in-

Enter the amount of rent paid, if any. (Attach

clude property from which the taxpayer solely

LINE 2 - WAGES, SALARIES AND OTHER

rider if necessary.)

receives rental income not considered income

PERSONAL SERVICE COMPENSATION

from an unincorporated business. See: “Who is

The amounts to be entered on line 2 include

WEIGHTED

FACTOR

ALLOCATION

Subject to the Tax”, paragraph 6.

wages, salaries, and other personal service

FOR TAXPAYERS OTHER THAN MANU-

compensation paid only to employees of the

FACTURING COMPANIES ELECTING

The average value of the property is determined

unincorporated business. Do not include pay-

TO USE THE OPTIONAL ADDITIONAL

by adding:

ments to independent contractors or to inde-

GROSS INCOME FACTOR

its value at the beginning of the taxable

pendent sales agents.

The portion that

The business allocation percentage is generally

year, and

represents the amount paid in connection with

computed by means of a three factor formula as

operations carried on in New York City should

its value at the end of the taxable year,

follows:

be entered on line 2 in column A. The total

and dividing by two.

• The property factor (line 1)

compensation paid to employees during the

• The payroll factor (line 2)

LINE 1b - REAL PROPERTY

taxable year in connection with unincorpo-

• The gross income factor (line 3)

RENTED FROM OTHERS

rated business operations carried on both in-

The value of real property rented to the business

side and outside New York City should be

Each factor is computed by dividing the amount

and to be included in line 1b is eight times the

entered in column B. If an employee works in

in Column A (New York City amount) by the

gross rent payable during the taxable year for

or travels out of an office or other place of

amount in Column B (total amount) and enter-

which the return is filed. Gross rent includes:

business within New York City, the compen-

ing the result in Column C . For taxable years

sation paid to that employee for services is

beginning in 2010, taxpayers, other than manu-

any amount payable for the use or pos-

part of operations carried on within New York

facturing companies electing to use the optional

session of real property or any part

City and must be included in New York City

additional gross income factor, must weight the

thereof, whether designated as a fixed

amounts.

three factors as follows: 27% for property; 27%

sum of money or as a percentage of sales,

for wages; and 46% for gross income.

profits or otherwise; and

Instructions For Form Nyc-204 -Partnership Return - 2010 Page 13

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