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Redacted Letter Rulings - Unincorporated Business Tax (UBT)
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.
An unincorporated business whose partners are located within New York City and are performing services on behalf of the unincorporated business must file a UBT tax return when its total gross income from all business is greater than $95,000. Particular methods of allocating income within and outside New York City would require a factual determination, which is properly an audit function and beyond the scope of a letter ruling. #22-5025 5/18/23
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The Taxpayer, operating at an eligible REAP premise may include those employees in the employment share calculation who were working at the location but because of government mandated closures due to the COVID-19 emergency subsequently worked remotely, provided that the Taxpayer treats those employees as working at the eligible premises for all purposes related to taxes imposed by New York City. #21-5012 6/9/21
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Because of a high degree of continuity of business operations, an acquiring entity is deemed to be entitled to the REAP benefits of an acquired entity that has been converted to a single member LLC. #19-5001 9/14/20
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Member of an LLC is not subject to the UBT based on ownership interest in an LLC that is solely engaged in activity that does not constitute an unincorporated business subject to the UBT. #20-5002 7/10/20
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Sourcing of receipts from multiple single member LLCs. #18-4986 8/22/18
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A limited partnership involved in the securities and commodities businesses is a registered securities broker or dealer and a registered commodities broker or dealer for purposes of determining the source of its receipts under the UBT.#13-4950. 3/28/2014
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Merger of an LLC into a wholly owned subsidiary of unrelated Purchaser with the LLC surviving and members of the LLC receiving cash and restricted stock in Purchaser is treated as a sale of LLC membership interests not taxable to the LLC for UBT purposes. Furthermore, founding member was not engaged in unincorporated business by virtue of owning an interest in the LLC and is not subject to the UBT. #13-4946. 4/15/2014
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An LLC providing “serviced accommodations” which include office services in addition to renting out office space is subject to the UBT. #13-4937. 8/19/2013
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Treatment of a limited partnership involved in the securities and commodities business as a registered securities and commodities broker or dealer for purposes of determining the source of its receipts. #12-4934. 8/19/2013
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The sale of its assets by an entity eligible to claim a REAP credit constitutes a sale of the business for REAP purposes, permitting the purchasing entity to continue the selling entity’s REAP eligibility, where the purchasing and selling entities were under the same management and control, carried on the same business operations, operated from the same space, used the same phone number and utilities account, and employed the same personnel. #09-4902. 12/14/10
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Settlement fund, established to receive and invest proceeds from lawsuit pending disbursement, is not subject to GCT or UBT. #06-4854. 8/1/2006
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Hypothetical ruling holds that the treatment of a taxpayer's real estate salespersons as independent contractors for federal purposes under IRC §3508 has no bearing on the status of these salespersons as employees for UBT purposes. #06-4848. 5/17/2006
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Based on the substance of a transaction, a newly formed single member limited liability company was held to be an eligible business for purposes of REAP based on 100% continuity of ownership and 100% continuity of the business of wholly related entities. #05-4844. 5/1/2006
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This ruling addresses how REAP shares are calculated for a business where the business and the associated employees being relocated are transferred within a group of closely affiliated entities in connection with the relocation. #04-4830. 5/6/2005
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For a partnership properly using the 3 factor formula allocation method, receipts for services performed by partners and employees in a non-NYC office are allocated outside of NYC. #02-4792. 6/18/2002
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Settlement fund, established to receive and invest proceeds from lawsuit pending disbursement, is not subject to GCT or UBT. #01-4777. 11/26/2001
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An LLC that does not sell to or engage in trades on behalf of customers, nor maintain any inventory of securities for sale to potential customers, is exempt from paying Unincorporated Business Taxes. #00-4767. 10/10/2000
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Gain on the sale of a business, and interest income received with respect to installment obligations relating to the sale of the business are included in New York City unincorporated business income in the same manner as they are included in federal income. #99-4754. 11/4/1999
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Partnership's cancellation of indebtedness income is excluded from taxable income to the extent required by the Bankruptcy Code. #98-4725. 12/15/1998
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