Magazine article The CPA Journal

Storage Fees Included in N.Y. Property Factor

Magazine article The CPA Journal

Storage Fees Included in N.Y. Property Factor

Article excerpt

STATE AND LOCAL TAXATION

AMOUNTS PAID FOR STORAGE ARE INCLUDED IN THE property factor only when they are for designated space and under the corporation's control.

The amount of a corporation's entire net income allocable to New York State is determined by multiplying the corporation's business income by its business allocation percentage. The business allocation percentage is computed by comparing a corporation's property, receipts, and payroll values within New York State to those of the corporation as a whole. Real property rented by a corporation is included in the property factor. However, amounts paid for storage are included in the property factor only when they are for designated space and under the corporation's control.

In a recent case (In the Matter of the Petitions of American Jet Engine Co., Inc. and Am/et Aerospace, Inc., DTA Nos. 816998 and 816999), the petitioners were able to prove that the storage fees paid for space in a New Jersey warehouse were properly included in the property factor. The taxpayers are brother-sister corporations, with offices in New York City and owned 100% by Paul Varkell. The companies buy and sell airplane parts, which are stored in a warehouse in New Jersey. …

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