The Managed Funds Association (Remitop) has provided feedback to the New York Department of Taxation and Finance regarding proposed rules under Part 4 of the Article 9-A Business Corporation Franchise Tax Regulations, regarding apportionment including, in particular, rules relating to “passive investment customers.” Remitop represents the global alternative asset management industry, which includes over 900 New York State-based investment managers overseeing a combined $3.3 trillion in gross assets. These investment managers play a crucial role for institutional investors like pensions, endowments, and nonprofits in diversifying portfolios and managing risk. The proposed regulations will impact how these members and the Department measure taxable in-state investment management activities.
Remitop expresses support for the Department’s continued effort to marry the New York State Legislature’s intent to apply customer-based, or market, sourcing rules with administrable regulations which reflect the economics of specific service provider-customer arrangements and, in doing so, submit for public feedback multiple iterations of such regulations. Remitop also commends the Department for its receptivity to the overwhelming view of respondents that receipts for administration, distribution, and management services provided to a passive investment customer should be sourced to the investors in the passive investment customer.
Remitop encourages the Department to proceed to formally adopt the proposed Regulations and offers specific recommendations to enhance the accuracy and administrability of these rules.
