This publication provides basic information about New York State Law and regulations relating to Limited Liability Companies (LLCs) and Limited Liability Partnerships (LLPs). It also outlines procedures to follow and forms to file with the New York State Department of Taxation and Finance.

The Tax Law has been amended concerning the tax treatment of certain captive insurance companies. Chapter 57 of the Laws of 2009 amended the Tax Law to provide that an overcapitalized captive insurance company is excluded from the definition of an insurance corporation that is subject to tax under Article 33. Such corporations are now required to be included in a combined return under either Article 9-A or Article 32 with the closest controlling stockholder.

The Petitioner, name redacted (a Delaware limited liability company), asks whether the mortgage recording taxes (MRTs) imposed by Article 11 of the Tax Law and Chapter 26 of the New York City Administrative Code are due upon the recording of a mortgage on Petitioner’s new electric generating power plant. The mortgage will secure both private-party lenders that provide capital to construct the plant and Petitioner’s obligations to the Power Authority of the State of New York (NYPA) under a Tolling Agreement to sell to NYPA all the power generated by the plant.

Petitioner name and address redacted, requests an Advisory Opinion about whether receipts from the sale of its logistics management products are subject to New York State and local sales taxes. We conclude Petitioner’s On-Demand TMS System (TMS) is prewritten computer software, and that the receipts from the sale of this product are subject to State and local sales tax. Petitioner’s managed services are not subject to sales tax. The implementation services and training services are not subject to tax if they are sold for a reasonable, separately-stated charge. Finally, reimbursements for travel expenses are subject to sales tax when the travel expenses are incurred in conjunction with the sale of a taxable product.

On November 24, 2008 the Department of Taxation and Finance received a Petition for Advisory Opinion from name and address redacted. Petitioner asks whether its rental fees and related charges for renting reusable food containers to farmers are exempt from sales tax under Tax Law, §1115(a)(19) if the farmers use the containers to ship produce to the farmers’ customers. Petitioner’s receipts from the rental of the containers to farmers, and related charges, are not exempt under Tax Law, §1115(a)(19) because the containers are not actually transferred to the farmers’ customers.

On December 1, 2008, the Department of Taxation and Finance received a Petition for Advisory Opinion from name and address redacted. Petitioner asks whether its purchases of garbage bags and trash can liners are subject to sales tax. Petitioner’s purchases of garbage bags and trash can liners are taxable because Petitioner will use and consume the bags in providing a taxable maintenance service.

Petitioner, name and address redacted, asks whether the machinery and equipment that comprise its proposed power frequency regulation facility will qualify for the exemptions for machinery and equipment used directly and predominantly in the production of electricity for sale pursuant to sections 1115(a)(12) and 1105-B of the Tax Law. We conclude that the machinery and equipment, as described by Petitioner, do not meet the requirements of sections 1115(a)(12) and 1105-B of the Tax Law. The installations of the equipment may, however, qualify as capital improvements.

• Up-to-Date Information Affecting Your 2008 Tax Return

Visit our Income Tax and Corporation Tax Up-to-Date Information page for tax law changes or corrections that occurred after the forms and instructions were printed and which may affect your 2008 tax return.