Redacted Letter Rulings - Commercial Rent Tax

Written by Finance's Legal Affairs Division, letter rulings are written statements that set forth the applicability of the statutes and rules to a specific set of facts, and are provided in redacted form to protect taxpayer-specific information.

Subtenant deduction applies to membership fees paid by members for the use or occupancy of a workspace for trade, business, professional or commercial activity for more than fourteen days in a taxable year. #22-5018 9/20/22
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Payments made pursuant to an agreement for the early termination of a lease are not considered rent for purposes of the CRT. #20-5003  3/12/20
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Subtenant deduction does not apply to the rental by the hour of karaoke rooms to customers.  #18-4988  5/17/18
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Lease is determined to be a financing arrangement not subject to the CRT.  #10-4905  9/29/10
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An operator of a hotel may reduce its base rent by the amounts it receives as rent from the guests staying at the hotel, irrespective of the length of the guest's stay. #07-4865.  7/27/07
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Payments under a lease that was, in reality, a financing arrangement, not subject to the Commercial Rent Tax. #07-4864. 7/27/2007
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The NY representative office of foreign central bank is exempt from Commercial Rent Tax because it is used solely for governmental activities and not for or in furtherance of commercial activities. #05-4833. 7/27/2005
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A transfer of the financing leasehold interest from a trust to a third party bank will not affect the conclusions in a prior letter ruling regarding the NYC Commercial Rent Tax implications of the financing lease. #04-4821. 3/29/2004
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Availability of a subtenant deduction where subtenants are related to primary tenant and subtenants pay less than the taxable threshold. #03-4816. 1/13/2004
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Transfer of property to single member LLC, sublease to 3rd party for lump sum, and re-lease of property to owner of LLC for payments equal to debt service on lump sum payment is a financing transaction and not a true lease. Transaction is not subject to RPTT or CRT. #03-4814. 6/10/2004
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Exemption for theatrical production not available after 52 weeks where production changes theaters. #02-4797. 3/14/2003
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Commercial Rent Tax (CRT) does not apply to finance lease from trust issuing certificates of ownership and notes. #02-4796. 2/4/2003
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The creation of an off-balance-sheet finance lease is not subject to RPTT and payments under the finance lease are not subject to CRT. #01-4789. 2/5/2002
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Nonprofit entity occupying multiple locations in same building exempt from tax. Activities in all locations aggregated in determining whether premises are used substantially in connection with commercial activity. FLR 014774 superseded. #01-4784. 12/12/2001
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Lease payments, where lease is actually a financing arrangement, are not subject to tax. #01-4776. 12/15/2001
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Premises occupied by a nonprofit organization exempt from Federal tax under IRC 01(c)(4) and used only for the editorial and other noncommercial functions for a publication of the exempt entity are not subject to the CRT because the premises are not used for commercial purposes. #01-4774. 5/16/2001
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The distribution of a condominium unit by a limited liability company to one of its members will be exempt from New York City Real Property Transfer Tax as a transfer from a "mere agent, dummy, straw man or conduit to" its principal where that member will hold title to the unit and will lease the unit to another entity under a finance lease. Because the lease is a financing arrangement and not a true lease, rental payments will not be subject to Commercial Rent Tax. The creation, termination and exercise of a purchase option under the lease will not be subject to the New York City Real Property Transfer Tax where the deed is given solely to secure a debt or to return such security. #00-4773. 4/19/2001
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Tenant paying a submarket rent below the amount subject to the CRT to a related landlord is not subject to tax. #00-4759. 4/27/2000
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Redacted Letter Rulings