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Page 2 of 29 CT-3/4-I (2006)

General information

that made the one-time election to remain taxable under Article 9-A,

that is doing business, employing capital, owning or leasing property, or

pursuant to section 1452(d) (the grandfather election), retain the authority

maintaining an office in New York State. Please attach a statement to your

to revoke that election. These transitional provisions were extended so they

return indicating this election has been made.

now expire for tax years beginning on or after January 1, 2008.

Which form to file

Entering dates — Unless you are specifically directed to use a different

format, enter dates in the mm-dd-yy format (using dashes and not slashes).

Form CT-4 is a simplified general business franchise tax return that meets

the filing needs of many businesses. Review the requirements for filing

Who must file

Form CT-3 below. If you are not required to use Form CT-3, then you may

use Form CT-4.

Domestic corporations — A domestic corporation (incorporated in New

York State) is generally liable for franchise taxes for each fiscal or calendar

You must use Form CT-3 if any of the following conditions exist:

year, or part thereof, during which it is incorporated until it is formally

— You claim a deduction for optional depreciation.

dissolved with the Department of State ( ). However, a

— You claim any tax credits.

domestic corporation that is no longer doing business, employing capital, or

— You are a real estate investment trust, a taxable domestic international

owning or leasing property in New York State is exempt from the fixed dollar

sales corporation (DISC), or a stockholder in a DISC.

minimum tax for years following its final tax year and is no longer required

to file a franchise tax return provided it meets the requirements listed in

— You have business income or capital attributable to sources outside

TSB-M-06(5)C, Certain Domestic Business Corporations Exempt from the

New York State, and you want to allocate this income and capital.

Article 9-A Fixed Dollar Minimum Tax.

— You have investment income or capital.

— You have a subsidiary (another corporation of which you own more than

Foreign corporations — A foreign corporation (incorporated outside of

50% of its voting stock).

New York State) is liable for franchise taxes during the period in which

it is doing business, employing capital, owning or leasing property, or

— You have federal adjustment or tax preference items other than the

maintaining an office in New York State. In addition, a foreign corporation

depreciation adjustment or the alternative net operating loss deduction

authorized to do business in New York State is also liable for payments of its

(ANOLD).

annual maintenance fee, until such time as it surrenders to the Department

— You are required to make an addition on Form CT-3, line 8. Additions

of State its authority to do business, regardless of whether it is doing

required on line 8 include optional depreciation, worldwide income and

business, employing capital, owning or leasing property, or maintaining an

losses, safe harbor lease adjustments, certain royalty expenses, SUV

office in the state.

depreciation, deferral of gain on sale of qualified emerging technology

investment (QETI), environmental remediation insurance premiums, and

All general business corporations other than New York S corporations must

addback of certain credits.

file franchise tax returns using either Form CT-3 or CT-4. This includes

both domestic corporations and foreign corporations that do business,

— You have a subtraction on Form CT-3, line 15, other than the subtractions

employ capital, own or lease property, or maintain an office in New York

allowed on Form CT-4, line 10. Subtractions required on line 15 include

State. A general business corporation that has elected to be treated as an

optional depreciation, receipts from the operation of school buses,

S corporation by filing Form CT-6, Election by a Federal S Corporation to

wages disallowed in computation of federal jobs credit, certain royalty

be Treated As a New York S Corporation, must file Form CT-3-S, New York

payments received, SUV recapture, deferral of gain on sale of QETI, and

S Corporation Franchise Tax Return instead of Form CT-3 or CT-4.

safe harbor lease adjustments.

— You are a corporation that is principally engaged in aviation.

The definition of a corporation, as used in Tax Law Article 9-A and in these

— You are a qualified public utility, a transferee, a qualified power

instructions, includes associations, limited liability companies, limited

producer, or a qualified pipeline corporation.

liability partnerships, and publicly traded partnerships that are taxed as

corporations under the Internal Revenue Code (IRC). For more information,

see TSB-M-89(12)C, Definition of Corporation.

Foreign corporations authorized to do business but

disclaiming tax liability

A general business corporation includes all corporations except:

— banking corporations (Article 32);

Form CT-245, Maintenance Fee and Activities Return for

a Foreign Corporation Disclaiming Tax Liability.

— insurance corporations (Article 33);

A foreign

corporation authorized to do business in New York State but disclaiming tax

— transportation and transmission corporations (other than aviation

liability must file this form. The annual maintenance fee is $300, unless you

corporations, corporations principally engaged in transportation,

file a short period return, which may reduce your maintenance fee to less

transmission, or distribution of gas, electricity, or steam (TTD

than $300.

corporations), and non-electing railroad and trucking corporations)

(Article 9);

If you are disclaiming tax liability, you do not have to file Form CT-3 or CT-4.

— farmers and agricultural cooperatives (Article 9);

If it is determined that a franchise tax return is required, this fee may be

— nonstock, not-for-profit corporations, no part of the net earnings of which

claimed as a credit against any tax due under Article 9-A.

inures to the benefit of any officer, director, or member;

Combined returns

— continuing section 186 taxpayers (Article 9).

Certain groups of corporations may be permitted or required to file on a

Corporate partners

combined basis. For more information, see Form CT-3-A, General Business

•

If a partnership is doing business, employing capital, owning or leasing

Corporation Combined Franchise Tax Return.

property, or maintaining an office in New York State, then all of its

corporate general partners must file franchise tax returns.

Other forms you may need to file

•

A foreign corporation is doing business, employing capital, owning

or leasing property, or maintaining an office in New York State if it is

a limited partner of a partnership (other than a portfolio investment

Form CT-3-B, Tax Exempt Domestic International Sales

partnership) that is doing business, employing capital, owning or leasing

Corporation (DISC) Information Return.

A tax-exempt DISC must file

property, or maintaining an office in New York State, and if it is engaged,

this form on or before the 15th day of the ninth month after the end of the

directly or indirectly, in the participation or in the domination or control of

tax year.

all or any portion of the business activities or affairs of the partnership.

Form CT-3-C, Consolidated Franchise Tax Return.

Stockholders

For more information, see NYS Regulation section 1-3.2(a)(6)(i).

of tax-exempt DISCs must file an individual return on Form CT-3 and a

consolidated return with the DISC on Form CT-3-C.

Election by a foreign corporate limited partner

Tax-exempt DISCs — A corporation that qualifies as a DISC under IRC

A foreign corporation that is a limited partner in one or more limited

section 992(a) is exempt from tax under Tax Law Article 9-A if during the

partnerships, subject to Tax Law Article 9-A solely as a result of

year it received more than 5% of its:

NYS Regulation section 1-3.2(a)(6) and that does not file a combined return,

•

may elect to compute its tax by taking into account only its distributive share

gross sales from the sale of inventory or other property purchased from

of the income, capital, gain, loss, or deduction of each limited partnership

its stockholders;

Form Ct-3/4-I - Instructions For Forms Ct-4, Ct-3, And Ct-3-Att - General Business Corporation Franchise Tax Returns - 2006 Page 2

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