Reference no: EM132056454

You represent ABC Corporation, a New Jersey S-corporation that has 3 shareholders, Abbey, Bobby and Charlie. Abbey and Bobby are domiciliaries of New York. Charlie is a domiciliary of New Jersey. Charlie owns an apartment in New York which he purchased as an investment. Charlie spends approximately 200 days in New York per year. ABC Corporation sells sporting goods and sporting good equipment throughout the United States. All purchase orders are processed in New Jersey and shipped from a distribution warehouse located in the State where delivery of goods will occur using independent truck drivers. Each warehouse is owned and managed by an unrelated entity. The corporation does not have any stores, offices or employees in any other State other than New Jersey. However, ABC Corporation does keep its books and records in NYS with its accounting firm. In addition, ABC corporation occasionally sends independent salesman into a particular State, including New York, to market and sell their goods to box-store distributors such as Modells, Footlocker and Footaction. The independent salesman not only attempt to make sales but will occasionally pass product inquires and complaints of the stores to ABC, as well as, assist in displaying the sporting good products in the store.

Question:

Find what we believe whether the new budget rules for state for this transaction apply to city purposes. [rule for partnership activity - 1% or 1 Million rule-satisfied if corporation has 1% or greater interest in partnership or has basis in partnership of greater than 1Mill - then it has nexus thru partnership. (regulation also describes 9 other instances when a foreign corporation could be deemed to be behaving in partnership affairs.] This is NYS rule, unclear if NYC adopted this rule.