§ 11-66 Payroll Factor.
RCNY § 11-66
(a)Computation of payroll factor.
(1)The percentage of the taxpayer's payroll allocable to New York City is determined by dividing the wages, salaries and other personal service compensation of the taxpayer's employees (except general executive officers) within New York City during the period covered by the report, by the total amount of compensation of all the taxpayer's employees (except general executive officers) during such period.
(2)Wages, salaries and other compensation include all amounts paid in good faith for services to the taxpayer, but do not include amounts paid by the taxpayer which do not have in them the element of compensation for personal services actually rendered or to be rendered.
(3)Wages, salaries and other compensation are computed on the cash or accrual basis, in accordance with the method of accounting used in the computation of the entire net income of the taxpayer.
(4)Employees within New York City include all employees regularly connected with or working out of an office or place of business of the taxpayer within New York City, irrespective of where the services of such employees were performed. However, if the taxpayer establishes to the satisfaction of the Commissioner of Finance that, because of the fact that a substantial part of its payroll was paid to employees attached to a New York City office who performed a substantial part of their services outside New York City, the computation of the payroll factor according to the general rule stated above would not produce an equitable result, the Commissioner of Finance may, in his discretion, permit the payroll factor to be computed on the basis of the amount of compensation paid for services actually rendered within and without the City. On the other hand, wherever it appears that, because a substantial part of the taxpayer's payroll was paid to employees attached to offices outside the City who performed a substantial part of their services within the City, the computation of the payroll factor according to the general rule would not properly reflect the amount of the taxpayer business done within New York City by its employees, the Commissioner of Finance may require the payroll factor to be computed on the basis of the amount of compensation paid for services performed within and without the City. In any case, where an employee performs services both within and without the City, the amount treated as compensation for services performed within the City will be deemed to be: (i) in the case of an employee whose compensation depended directly on the volume of business secured by him, such as a salesman on a commission basis, the amount received by him for the business attributable to his efforts within New York City; (ii) in the case of an employee whose compensation depended on other results achieved, the proportion of the total compensation which the value of his services within New York City bears to the value of all his services; and (iii) in the case of an employee compensated on a time basis, the proportion of the total amount received by him which the working time employed within New York City bears to the total working time.
(b)Definition of employees.
(c)General executive officers.
