New York—Personal Income Tax: Bulletin Explains Sourcing of Income for Sole Proprietorships and Partnerships

The New York Department of Taxation and Finance has issued a personal income tax bulletin discussing source income for sole proprietorships and partnerships.

The department reminds taxpayers that nonresident individuals, estates, or trusts are subject to tax on their New York-source income. New York-source income includes income derived from or connected with a business, trade, profession, or occupation carried on in New York. For partners in a partnership, New York-source income also must include those items of income, gain, loss, and deduction included in their distributive share of partnership income that is derived from or connected with business carried on by the partnership in New York.

New York-source income of a sole proprietor or partnership includes:

• income attributable to a business, trade, profession, or occupation carried on in New York;
• income attributable to the ownership of any interest in real property (including all or a portion of the gain or loss from the sale or exchange of an interest in certain entities that own real property in New York);
• income attributable to tangible personal property located in New York State, and intangible personal property to the extent that it is used in a business, trade, profession, or occupation carried on in New York; and
• any gain from the sale, transfer, or other disposition of shares of stock in a cooperative housing corporation when the real property comprising the units of the cooperative housing corporation is located in New York, whether or not connected with a business.