§ 28-02 Unincorporated Business Defined.
(a) General. (Administrative Code § 11-502(a)).
(1) Except as otherwise specifically provided in this chapter of these rules, an unincorporated business means any trade, business, profession or occupation conducted, engaged in or being liquidated by an individual or by an unincorporated entity, including a partnership or fiduciary, a corporation in liquidation, or an unincorporated entity that has elected under § 11-602(1)(b) of the Administrative Code to continue to be subject to the tax imposed by Chapter 5 of Title 11 of the Administrative Code for the period during which such election is in effect, but not including any entity subject to any city corporate business tax imposed pursuant to Chapter 6 of Title 11 of the Administrative Code.
(2) For all taxable years beginning on or after January 1, 1978, the term "unincorporated business" shall not include any entity conducting an insurance business as a member of the New York Insurance Exchange as described in Article 62 of the State Insurance Law.
(3) (i) An unincorporated business which is a utility business subject to the supervision of the State Department of Public Service and which is subject to the tax on utilities pursuant to Chapter 11 of Title 11 of the Administrative Code shall not be subject to tax under Chapter 5 of Title 11 of the Administrative Code.
(ii) An incorporated business which is subject to the tax on vendors of utility services under Chapter 11 of Title 11 of the Administrative Code shall be subject to the Unincorporated Business Tax under Chapter 5 of Title 11 of the Administrative Code on a portion of its entire net income allocable to the city under § 11-508 of the Administrative Code (see: 19 RCNY § 28-07). Entire net income is the unincorporated business gross income as defined by § 11-506 of the Administrative Code (see: 19 RCNY § 28-05) less the unincorporated business deductions allowed by § 11-507 of the Administrative Code (see: 19 RCNY § 28-06). The portion of the unincorporated business entire net income subject to the unincorporated business tax shall be calculated by multiplying the entire net income allocable to the City by a fraction the numerator of which shall be the total receipts of the unincorporated business less those receipts subject to the tax imposed by Chapter 11 of Title 11 and the denominator of which shall be the total receipts of the unincorporated business.
Example: An unincorporated business has total receipts of $1,000,000. $300,000 of these receipts is subject to the tax imposed by Chapter 11 of Title 11 of the Administrative Code. The entire net income of the business which is allocable to the City is $500,000. $350,000 will be subject to the Unincorporated Business Tax
($700,000 × $500,000 = $350,000)
$1,000,000
(4) (i) Where an individual or other unincorporated entity carries on in whole or in part in the City, two or more distinct unincorporated businesses, all such businesses carried on in whole or in part in the City shall be treated as one unincorporated business for the purposes of Chapter 5 of Title 11 of the Administrative Code. The gross business income and the unincorporated business deductions of all such businesses must be reported in one return. The deductions for the compensation for services of the proprietor or the active partners and the unincorporated business exemptions must be computed without regard to the fact that more than one business activity is carried on by the entity.
(ii) An individual or other unincorporated entity carrying on a number of separate and distinct unincorporated businesses, some located (in whole or in part) in the City and others located entirely outside the City, must treat all the New York City businesses as a single business in computing its tax. The businesses carried on entirely outside the City are not taxable and, therefore, items of income, gain, loss or deduction from such businesses are not included in computing the unincorporated business taxable income of the City business. In addition, these distinct businesses carried on entirely without the City may not serve as a regular place of business for allocation purposes of the business carried on within the City (see: 19 RCNY § 28-07).
(iii) Where a husband and wife each carry on a separate and independent business, each must file a separate and independent tax return even if they file jointly for purposes of the Federal, State or City personal income taxes. Losses incurred in one spouse's business may not be used to reduce the taxable income of the other spouse's business.
(5) In general, the trades, businesses, professions or occupations which constitute an unincorporated business when conducted, engaged in or being liquidated by an individual or an unincorporated entity include, without limitation, all phases of activities such as manufacturing and processing, merchandising, at wholesale or retail, banking and financing, the practice of law, medicine, accounting and other professions, trucking and other transportation services, brokerage services of all types and any other activity which involves the leasing of or trading or dealing in real or personal property or the performing of services of any kind. Where a doubt as to the status of an activity exists, all the relevant facts and circumstances must be considered in determining whether the activity or the transactions involved constitute a trade, business, profession or occupation for the purposes of this section. Generally, the continuity, frequency and regularity of activities, as distinguished from casual or isolated transactions, and the amount of time and resources devoted to the activity or transactions are the factors which are to be taken into consideration.
Example: The composition of a single song by an individual who is not a songwriter by profession does not constitute carrying on an unincorporated business so as to subject his royalty income to the tax.
(6) Ordinarily, an individual or other unincorporated entity, not otherwise subject to tax, engaging in activities relating to the investment and reinvestment of his or its own funds and the receipt or collection of income therefrom, or the sale, purchase or writing of stock options for his or its own account or the consummation of isolated or incidental transactions connected with such investment activities will not be considered to be the carrying on of a trade, business or occupation. See 19 RCNY § 28-02(g). However, a taxpayer who or which invests funds in the purchase of an operating unincorporated business, such as a manufacturing plant, mercantile organization, hotel or other unincorporated activity of the type where the carrying on of business is necessary to realizing on the investment, will be deemed to be engaged in the conduct of a taxable trade, business, profession or occupation, even though only a limited amount of time, thought and energy may be devoted to the activity by the individual taxpayer, or by the members of a partnership or other unincorporated entity.
(7) (i) An individual will not be treated as engaged in any trade, business, profession or occupation carried on within or without the City by an unincorporated entity in which such individual owns an interest.
(ii) For taxable years beginning on or after January 1, 1996, and for purposes of Chapter 5 of Title 11 of the Administrative Code, if an unincorporated entity owns an interest in another unincorporated entity that is carrying on any trade, business, profession or occupation in whole or in part in the City, the first unincorporated entity will be treated as carrying on that same trade, business, profession or occupation in whole or in part in the City, regardless of whether that trade, business, profession or occupation constitutes an unincorporated business for purposes of Chapter 5 of Title 11 of the Administrative Code. If an unincorporated entity owns an interest in another unincorporated entity that is not carrying on any trade, business, profession or occupation in whole or in part in the City, the first unincorporated entity will not be considered engaged in an unincorporated business based solely on such ownership. The provisions of this subparagraph (ii) may be illustrated by the following examples:
Example 1: Partnership A is engaged in the purchase and sale of stocks and securities for its own account in the City. In 1997, Partnership A is a limited partner in Partnership B that operates a hotel located outside the City and is not engaged in any other trade, business, profession or occupation in whole or in part in the City. Partnership A will not be considered to be carrying on a business in the City by reason of its ownership of an interest in B.
Example 2: The facts are the same as in Example 1 except that the hotel is located in the City. Because Partnership B is engaged in a business in the City, under the provisions of paragraph (7) above, Partnership A will be considered engaged in the business carried on in the City by Partnership B.
(b) Persons and entities subject to this tax.
(1) General. The persons and entities which are subject to the unincorporated business income tax when they engage in the carrying on of or the liquidation of a taxable trade, business, profession or occupation, as defined in 19 RCNY § 28-02(a), are any
(i) individual,
(ii) partnership (whether a general, limited or special partnership),
(iii) society,
(iv) association,
(v) estate,
(vi) statutory or common law trust,
(vii) individual carrying on a taxable trade, business, profession or occupation in a fiduciary capacity or relationship, including
(A) an executor,
(B) administrator,
(C) receiver,
(D) trustee,
(E) liquidator,
(F) referee and
(G) assignee,
(viii) a corporation in liquidation, or
(ix) any other entity which is not taxable as a corporation under Chapter 6 of Title 11 of the Administrative Code.
(2) Executor or administrator. Where an executor or administrator, in his or its fiduciary capacity, continues to carry on or liquidate an unincorporated business of a decedent, the estate of such decedent is an entity subject to the provisions of the unincorporated business tax law. The unincorporated business tax law also applies where a receiver, trustee, liquidator, assignee, referee, or other fiduciary carries on or liquidates an unincorporated business activity of an individual, partnership or other unincorporated entity. The tax likewise applies to the activities of a fiduciary in connection with the liquidation of the business of a corporation, unless such liquidating activities are subject to corporation taxes under Chapter 6 of Title 11 of the Administrative Code. Furthermore, a guardian, trustee, executor, administrator, receiver, conservator, referee, assignee, or any person acting in any fiduciary capacity for any person who carries on or liquidates a business of an individual, partnership or other unincorporated entity, or a corporation in liquidation not subject to Chapter 6 of Title 11 of the Administrative Code, who pays, in whole or in part, any debt due by the party for which he acts before he satisfies and pays the tax due under Chapter 5 of Title 11 of the Administrative Code from such party, shall become answerable in his own person and estate to the extent of such payments for so much thereof as may remain due and unpaid.
(c) Special rules for partnerships, syndicates, groups, pools, joint ventures.
(1) Partnership defined. The word "partnership" as used in these rules, includes, in addition to its ordinary meaning, a syndicate, group, pool, joint venture or other unincorporated organization, including a subchapter K limited liability company as defined in § 11-126 of the Administrative Code, through or by means of which any business, financial operation, or venture is carried on and which is not a trust, estate, corporation, or other entity subject to the tax imposed by Chapter 6 of Title 11 of the Administrative Code. See 19 RCNY § 28-02(a)(1) for the treatment of unincorporated entities that elected to be subject to the unincorporated business tax under Administrative Code § 11-602(1)(b).
(2) Additional criteria for partnerships to be deemed unincorporated businesses. For purposes of determining whether the activities of any partnership (including one which has made an election under Section 761 of the Internal Revenue Code; see: subdivision (d) of this section) constitute the carrying on of an unincorporated business, there shall, in addition to the other provisions of these regulations, be taken into account such factors as
(i) the form or type of ownership of any property involved in or connected with the activity,
(ii) whether the participants reserve the right separately to take in kind or to dispose of their shares of any property acquired, retained, produced, extracted or used by the partnership or other venture, and
(iii) whether the participants jointly or as a unit sell services or jointly sell any property produced or extracted by the partnership or other unincorporated organization. For example, if one or more individuals as "co-owners," either in fee or under a lease, undertake the development of "oil property" by agreeing to share in the costs and expenses of the development and in the production of the oil, the resulting partnership or joint venture will not be deemed to be engaged in the conduct of an unincorporated business as an entity if it is established that the participants reserved the right separately to take in kind and to dispose of their individual shares of the oil and if it is shown that the individuals or participants did not sell jointly or as a unit the oil produced by the property. In such a case, the individual member or participant in the operation of the property will be deemed to be engaged in an unincorporated business with respect to his participation in the group operation pertaining to the development of the property and the production of the oil and with respect to the individual or separate sales of the oil for his own account. If, in the example given above, the participants did not have the right to take their individual shares of the oil or if a joint sale of the oil has been made, the activities of the partnership or joint venture would constitute the carrying on of a taxable business by the partnership or venture as an entity.
(d) Effect of elections made for federal income tax purposes.
(1) General. Notwithstanding the provisions of subdivision (a) of this section of these regulations (regarding the meaning of the terms used in the laws of the United States relating to Federal income taxes), an election made for Federal income tax purposes by an individual proprietor, a partner, a partnership or other unincorporated entity or a corporation under Sections 761, 1361 (applicable to taxable years ending prior to January 1, 1969) or 1362 of the Internal Revenue Code will not be determinative of the status of the electing individual, partnership, corporation or other entity for unincorporated business tax purposes.
(2) Election under Section 761 of the Internal Revenue Code. Where an exclusion of a partnership or an unincorporated enterprise from application of the provisions of subchapter K of subtitle A of the Internal Revenue Code has resulted from an election made under section 761 of the Internal Revenue Code, there shall, upon request, be furnished to the Commissioner of Finance such information as the Commissioner of Finance may require regarding the names, addresses and proportionate interests in the partnership of the member partners, the nature and amount of income and deductions of the partnership and details of its business or financial operations or activities.
(3) Election under Section 1361 of the Internal Revenue Code. For taxable years ending prior to January 1, 1969, an election made by an unincorporated business enterprise owned by an individual or partnership (as defined herein) under Section 1361 of the 1954 Internal Revenue Code to be taxed as a domestic corporation for Federal income tax purposes will not in any way affect the liability of such unincorporated business enterprise provided for in Chapter 5 of Title 11 of the New York City Administrative Code unless, by reason of such election, the enterprise becomes subject to tax under Chapter 6 of Title 11 of the New York City Administrative Code, in which case its activities will not constitute the carrying on of an unincorporated business as defined in 19 RCNY § 28-02(a)(1).
(4) Election under Section 1362 of the Internal Revenue Code. An election by a small business corporation under Section 1362 of the Internal Revenue Code, to be an S corporation (or for taxable years beginning prior to January 1, 1983 the comparable election under former Section 1372 of the Internal Revenue Code), does not alter the corporate status for other than Federal income tax purposes and does not make the electing corporation or its shareholders subject to the provisions of Chapter 5 of Title 11 of the New York City Administrative Code.
(e) Services as employee, officer, director or fiduciary.
(1) General. Where an individual is
(i) an employee, or
(ii) an officer or director of a corporation, society, association or a political entity such as the United States, a State, a municipality or other political subdivision of a State, or
(iii) a fiduciary, such as an executor, administrator, trustee, liquidator, referee, or assignee, The performance of services as such employee, officer, director or fiduciary will not be deemed to be the carrying on of an unincorporated business by such individual unless the services so performed constitute part of a business regularly carried on by such individual. If the fiduciary is engaged in the carrying on of or the liquidation of a taxable trade, business, profession or occupation, see 19 RCNY § 28-02(b)(2).
(2) Employee defined.
(i) The term "employee" as used in this subdivision (e) means an individual performing services for an employer under an employer-employee relationship. Generally, the relationship of employer and employee exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished, but also as to the details and means by which that result is to be accomplished. That is, an employee is subject to the will and control of the employer not only as to what shall be done but as to how it shall be done. He will usually be required to work during stated days and hours and be subject to company-established production standards. Other factors characteristic of employment, but not necessarily required or present in every case, are the providing of equipment and the furnishing of a place to work to the individual who performs the services.
(ii) If an individual is subject to the control or direction of another merely as to the result to be accomplished by the services and not as to the means and methods for accomplishing the result, he usually is an independent contractor or an independent agent rather than an employee. An individual who performs services for only one person or entity may, nevertheless, be an independent contractor or independent agent. Where he, however, performs services for two or more persons or entities, without a clear division of time, such an individual would ordinarily not be an employee but rather an independent contractor or agent with respect to both such persons or entities, since neither person or entity could be said to actually direct or control such individual to the extent necessary in an employer-employee relationship. With respect to certain sales representatives, however, this rule has been modified so that the sole fact of performance of services for two or more persons or entities without a clear division of time, does not, in itself, mean that such individual must be considered a self-employed independent contractor or agent. (See: 19 RCNY § 28-02(i)). Nevertheless, a sales representative will not be considered an employee unless such principals otherwise direct and control such individual to the extent necessary in an employer-employee relationship. Generally, agents, auctioneers, brokers, contractors and other individuals engaged in performing services who are independent and who offer their services to the general public are not employees. Likewise, where an individual makes an investment of capital which is a material income producing factor or maintains an inventory, whether or not title to such inventory is in his own name, such an individual would ordinarily be considered engaged in his own business.
(3) Employer-employee relationship determined. Whether there is sufficient direction and control which results in the relationship of employer and employee will be determined upon an examination of all the pertinent facts and circumstances of each case. The designation and description of the relationship by the parties, whether by contract or otherwise, is not necessarily determinative of the status of the individual for unincorporated business tax purposes. Other factors to be considered in determining if there is a sufficient exercise of direction and control resulting in an employer-employee relationship are whether the individual performing the services maintains his own office, engages his own assistants or hires his own employees, or incurs expenses without reimbursement. For a more detailed discussion of such factors, see 19 RCNY § 28-02(i). Still other factors which may have some bearing are whether or not
(i) personal income taxes or Federal insurance contributions are deducted from compensation to be paid to the individual,
(ii) whether or not the person or entity for whom the services are performed pays unemployment insurance,
(iii) whether or not the individual is a member of an employee pension plan, profit sharing, or other employee fringe benefit plan maintained by the entity for which the services are performed, and
(iv) whether or not the individual is a member of an employee union or association. The fact that the individual has been determined to be an employee or independent contractor by a court or administrative tribunal under any state, local or Federal law, is not determinative of the individual's status for the purposes of this subdivision (e). The weight, if any, to be given to such fact will depend upon the law under which the status was determined and the nature and purpose of such law.
(4) Services which constitute business activity. Personal services rendered by an individual as an employee, officer, director or fiduciary will ordinarily be deemed part of a business regularly carried on by such individual if such services are performed in furtherance of or for the direct benefit of other business activities, professional activities, or occupational activities the conduct of which constitutes an unincorporated business under the provisions of 19 RCNY § 28-02(a)(1). For purposes of the preceding sentence, services as an employee, officer, director or fiduciary performed by an individual will not be deemed to be performed in furtherance of or for the direct benefit of other business, professional or occupational activities of the individual
(i) if the individual does not maintain an office or employ assistants in connection with such services and his services as an employee, officer, director or fiduciary are performed on a full-time basis for one employer or principal and constitute the primary or chief occupational activity of the individual, or
(ii) if the services as an employee, officer, director or fiduciary are contracted for or undertaken and performed entirely independent of any other business, professional or occupational activity engaged in by the individual. Where an individual maintains an office or employs assistants in connection with the performance of services as an employee, officer, director or fiduciary for one or more employers or other principals, the services so performed will be deemed part of a business regularly carried on if the individual regularly performs or offers to perform similar services to the general public on an independent basis. Where the individual rendering personal services as an employee, officer, director or fiduciary is also actively engaged in his own independent business, without a clear division of time, or where the compensation received bears no reasonable relationship to the services performed for such employer or principal, but includes compensation for services performed in the individual's independent business, such services will be deemed to constitute part of an unincorporated business regularly carried on by the individual.
(f) Professions.
(1) General. For all taxable years beginning on or after January 1, 1971, the practice of a profession is deemed to constitute an unincorporated business. For prior periods, the practice of law, medicine, dentistry or architecture, and the practice of any other profession in which capital was not a material income producing factor and in which more than eighty percent of the unincorporated business gross income for the taxable year was derived from personal services actually rendered by the individual or the members of the partnership or other entity, was not deemed an unincorporated business.
(2) Profession defined. For purposes of these regulations, the term "profession" includes any occupation or vocation in which a professed knowledge of some department of science or learning, gained by a prolonged course of specialized instruction and study, is used by its practical application to the affairs of others, either advising, guiding or teaching them, and in serving their interests or welfare in the practice of an art or science founded on it. The word profession implies attainments in professional knowledge, as distinguished from mere skill and the application of knowledge to uses for others as a vocation.
(g) Purchase and sale of property for own account. (Administrative Code § 11-502(c)).
(1) Full self-trading exemption.
(i) Taxable years beginning before July 1, 1994. Notwithstanding the provisions of 19 RCNY § 28-02(a), for taxable years beginning before July 1, 1994, an individual or unincorporated entity, other than a dealer holding property primarily for sale to customers in the ordinary course of his, her, or its trade or business, shall not be deemed engaged in an unincorporated business solely by reason of the purchase and sale of property (real or personal), and, for taxable years beginning after 1976, the purchase, writing or sale of stock option contracts, for his, her, or its own account. Where the purchase and sale of real or personal property is connected with an unincorporated business otherwise regularly carried by the individual or entity, the profits and income from such purchases and sales will ordinarily be includible in the unincorporated business gross income of the individual or entity.
Example: For taxable years beginning before July 1, 1994, a partnership holding a stock exchange seat, which buys and sells securities for its own account and executes orders on the floor of the exchange for other securities brokers for which it receives commissions, must include in its unincorporated business income both its trading profits and its commissions.
(ii) Taxable years beginning after June 30, 1994 and before 1996. Notwithstanding the provisions of 19 RCNY § 28-02(a), for taxable years beginning after June 30, 1994, and before 1996, an individual or unincorporated entity, other than a dealer holding property primarily for sale to customers in the ordinary course of a trade or business, shall not be deemed engaged in an unincorporated business if the individual's or entity's activities consist exclusively of the purchase and sale of property, or the purchase, writing or sale of stock option contracts, for his, her, or its own account or consist exclusively of such activities and the conduct of any other activity or activities not otherwise subject to the tax imposed by Chapter 5 of Title 11 of the Administrative Code. See subparagraph (iv) of this paragraph for the treatment of individuals and entities receiving $25,000 or less of gross receipts from an unincorporated business in addition to the purchase and sale of property.
(iii) "Dealer" defined for taxable years beginning before January 1, 1996. For purposes of subparagraphs (i), (ii) and (iv) of this paragraph for taxable years beginning before January 1, 1996, a dealer in real or personal property is an individual or an unincorporated entity with an established place of business, regularly engaged in the purchase of property and its resale to customers; that is, one who (as a merchant) buys property and sells it to customers with a view to the gains and profits that may be derived therefrom. A builder or real estate developer who regularly subdivides real property and sells it as improved or unimproved lots likewise is considered to be a dealer for such purposes.
(iv) $25,000 test. Notwithstanding anything to the contrary, for taxable years beginning after June 30, 1994, if an individual or unincorporated entity is engaged in the purchase and sale of real or personal property, or the purchase, writing and sale of stock option contracts, other than as a dealer, for his, her, or its own account, and that individual or unincorporated entity also is engaged in one or more unincorporated businesses carried on in whole or in part in the City, such individual or entity will continue to be treated as engaged solely in the purchase and sale of property for the individual's or entity's own account and, therefore, eligible for the full exemption, provided such individual or entity does not receive more than $25,000 of gross receipts during the taxable year (determined without regard to any deductions) from all such unincorporated businesses wholly or partly carried on within the City.
(v) Taxable years beginning after 1995. For taxable years beginning on or after January 1, 1996, an individual or unincorporated entity, other than a dealer as defined in paragraph (2) of this subdivision (g), shall not be considered engaged in an unincorporated business solely by reason of:
(A) the purchase, holding, and sale for his, her, or its own account of property as defined in paragraph (3) of this subdivision (g);
(B) the entry into, assumption, offset, assignment, or other termination of a position in any property as defined in paragraph (3) of this subdivision (g);
(C) the acquisition, holding or disposition, other than in the ordinary course of a trade or business, of interests in unincorporated entities engaged solely in the activities described in subparagraphs (v)(A) through (v)(D) of this paragraph (1); or
(D) any combination of the activities described in subparagraphs (v)(A) through (v)(C) of this paragraph and any other activity not constituting an unincorporated business subject to the tax imposed by Chapter 5 of Title 11 of the Administrative Code.
(vi) Self-trading activities of individuals. An individual, other than a dealer as defined in paragraph (2) of this subdivision (g), engaged in the purchase and sale of real or personal property for his or her own account, including, for taxable years beginning after December 31, 1976, the purchase, sale or writing of stock option contracts, and, for taxable years beginning after December 31, 1995, the activities described in subparagraphs (v)(A) and (v)(B) of this paragraph, will not be deemed to be engaged in an unincorporated business wholly or partly in the City for purposes of this paragraph (1) unless (A) such transactions and activities are connected with a business regularly carried on wholly or partly in the City by the individual himself or herself and (B) for taxable years beginning after June 30, 1994, the individual receives more than $25,000 in gross receipts during the taxable year from such business regularly carried on. See 19 RCNY § 28-02(a)(7)(i) and (g)(1)(iv) of these rules. For purposes of this paragraph (1), such transactions and activities will be considered to be connected with a business regularly carried on wholly or partly in the City if such transactions are effected in the name of the business, are effected using funds held in banks or other financial institutions in the name of the business or if the assets resulting from such transactions are held in the name, or for the account, of the business. Where the purchase and sale of real or personal property or, for taxable years beginning after December 31, 1995, the activities described in subparagraphs (v)(A) and (v)(B) of this paragraph, are connected with an unincorporated business otherwise regularly carried on by the individual, the profits and income from such transactions will be includible in the unincorporated business gross income of the individual.
(2) "Dealer" defined for taxable years beginning on or after January 1, 1996. For purposes of this subdivision (g) for taxable years beginning on or after January 1, 1996, a dealer in real or personal property is an individual or an unincorporated entity that (A) purchases, holds, or disposes of property that is stock in trade of the individual or entity, inventory or is otherwise held for sale to customers in the ordinary course of the individual's or the entity's trade or business, or (B) regularly offers to enter into, assume, offset, assign or otherwise terminate positions in property with customers in the ordinary course of the individual's or entity's trade or business. For taxable years beginning on or after January 1, 1996, an individual or unincorporated entity shall not be treated as a dealer for purposes of Chapter 5 of Title 11 of the Administrative Code based exclusively on the fact that such individual or unincorporated entity owns an interest in an entity that is a dealer, as defined above, and an unincorporated entity shall not be treated as a dealer based exclusively on the fact that an individual or other entity that is a dealer, as defined above, owns an interest in such unincorporated entity. This paragraph is illustrated below:
Example 1: In 1996, Partnership A is a securities dealer in the City. Partnership A also is a limited partner in Partnership B that is engaged directly in the purchase and sale of stocks and securities for its own account in the City. Partnership B is not treated as a dealer based solely on the ownership by Partnership A of an interest in Partnership B.
Example 2: The facts are the same as in Example 1 except that Partnership A is the sole general partner in Partnership B and causes Partnership B to regularly take positions in stocks and securities with respect to which Partnership A is a dealer and Partnership B regularly engages in stock lending transactions with Partnership A. Based on the facts and circumstances, a portion of Partnership B's activities is engaged in wholly or partly to further the dealer activities of Partnership A and, therefore, Partnership B is considered a dealer.
(3) "Property" defined for taxable years beginning on or after January 1, 1996. For taxable years beginning on or after January 1, 1996, and for purposes of paragraphs (2) and (4) of this subdivision g, "property" shall mean:
(i) real and personal property, including but not limited to, property qualifying as investment capital as defined in subdivision (h) of § 11-501 of the Administrative Code of these rules, other stocks, notes, bonds, debentures, or other evidences of indebtedness, interest rate, currency, or equity notional principal contracts and foreign currencies,
(ii) interests in, or derivative financial instruments (including options, forward or futures contracts, short positions, and similar financial instruments) in, any property described in subparagraph (i), and
(iii) any commodity traded on, or subject to the rules of, a board of trade or commodity exchange, provided, however, "property" shall not include:
(iv) debt instruments issued by the taxpayer,
(v) accounts receivable held by the taxpayer as a factor,
(vi) stock in trade, inventory or property otherwise held for sale to customers in the ordinary course of the taxpayer's trade or business,
(vii) debt instruments acquired in exchange for funds loaned, services rendered, or for the sale, rental or other transfer of property by the taxpayer in the ordinary course of the taxpayer's trade or business,
(viii) interests in unincorporated entities, or
(ix) positions in any item described in subparagraphs (i) through (viii) entered into, assumed, offset, assigned or terminated by the taxpayer as a dealer in such positions or item.
(4) Partial exemption for entities for taxable years beginning on or after January 1, 1996.
(i) General. For taxable years beginning on or after January 1, 1996, if an unincorporated entity is primarily engaged in either activities that would qualify the entity for the full self-trading exemption provided in paragraph (1) of this subdivision (g), or holding certain passive investments in other unincorporated entities as described below, or both, the self-trading activities of the taxpayer, and of any unincorporated entity separately eligible for this partial exemption in which the taxpayer holds an interest, will not be considered an unincorporated business carried on by the taxpayer and, therefore, the income, gains, losses and deductions from such self-trading activities will be excluded from the unincorporated business gross income of the taxpayer. Specifically, if an unincorporated entity is primarily engaged in:
(A) activities described in subparagraphs (v)(A) through (v)(D) of paragraph (1) of this subdivision (g);
(B) the acquisition, holding or disposition, other than in the ordinary course of a trade or business, of interests as an investor, as defined in subparagraph (iii) of this paragraph (4), in unincorporated entities carrying on one or more unincorporated businesses in whole or in part in the City; or
(C) any combination of the activities described in subparagraphs (i)(A) and (i)(B) of this paragraph (4); the activities described in subparagraph (i)(A) of this paragraph (4), (i.e., the self-trading activities), carried on either by the taxpayer, or by any unincorporated entity that separately qualifies for the full exemption provided in paragraph (1) of this subdivision (g) or for the partial exemption under this subparagraph in which the taxpayer owns an interest, shall not be considered an unincorporated business carried on by the taxpayer and, therefore, the income, gains, losses, and deductions from those activities will be excluded from the unincorporated business gross income of the taxpayer. The income, gains, losses, and deductions from activities described in subparagraph (i)(B) of this paragraph (4) will not be excluded from the unincorporated business gross income of the taxpayer.
(ii) "Primarily engaged" defined. For purposes of subparagraph (i), a taxpayer that is an unincorporated entity shall be treated as primarily engaged in activities described in subparagraphs (i)(A), (i)(B) and (i)(C) of this paragraph if at least 90 percent of the total value of the taxpayer's assets is represented by assets described in subparagraphs (ii)(A) through (ii)(C) below:
(A) "property" as defined in paragraph (3) of this subdivision (g);
(B) interests in unincorporated entities not engaged in the conduct of any unincorporated business in whole or in part in the City; and
(C) interests held by the taxpayer as an investor, as defined in subparagraph (iii) of this paragraph, in unincorporated entities engaged in the conduct of one or more unincorporated businesses in whole or in part in the City.
(iii) "Investor" defined. For purposes of this paragraph (4), a taxpayer that is an unincorporated entity shall be considered to acquire, hold or dispose of an interest in another unincorporated entity as an investor if:
(A) that other unincorporated entity meets the requirements of subparagraph (i) of this paragraph (i.e., that other unincorporated entity qualifies for the partial self-trading exemption under this paragraph) and the taxpayer does not receive a distributive share of that other unincorporated entity's income, gain, loss, deductions, credits or basis from a business carried on in whole or in part in the City that is materially greater than its distributive share of any other item of income, gain, loss deduction, credit or basis of such unincorporated entity; or
(B) with respect to any other unincorporated entity not meeting the requirements of subparagraph (i) of this paragraph, i.e., not qualifying for the partial self-trading exemption, the taxpayer is not a general partner, is not authorized under the governing instrument to manage or participate in the day-to-day business of such unincorporated entity, and is not managing or participating in the day-to-day business of such unincorporated entity. For purposes of this subparagraph (iii)(B), the fact that the taxpayer is represented on a general oversight body, or is authorized to review or reject periodic budgets or veto major management decisions such as a major refinancing or sale of the unincorporated entity's assets other than in the ordinary course of business and exercises such authority, will not cause the taxpayer to be considered to be participating in day-to-day management. In addition, if a taxpayer is authorized to participate in day-to-day management only upon the occurrence of a particular event, or after the occurrence of such an event only upon the election by the taxpayer to so participate, the taxpayer will be considered to participate in day-to-day management only upon the occurrence of the event and, where applicable, after the taxpayer elects to so participate. Management activities of employees, officers and partners of the taxpayer will be imputed to the taxpayer for purposes of this subparagraph (iii)(B) only if such activities are performed by such persons in their capacity as employees, officers or partners of the taxpayer. For purposes of the preceding sentence, a determination as to whether management activities of an individual employee, officer or partner of the taxpayer, or of an employee, officer, partner or shareholder of a partner of the taxpayer, will be imputed to the taxpayer will be based on the facts and circumstances of each case, including but not limited to, whether the individual receives reasonable compensation for management services from the unincorporated business.
(iv) For purposes of subparagraph (ii) of this paragraph, the value of the assets of the taxpayer will be the average monthly gross value of the taxpayer's assets, unless the Commissioner determines that the use of gross values results in an improper or inaccurate reflection of the primary activities of the taxpayer. In that event, the Commissioner may exercise his or her discretion, in such manner as he or she may determine, to reduce the gross value of the taxpayer's assets by liabilities attributable thereto or to exclude assets so as to properly and accurately reflect the primary activities of the taxpayer. See examples 4 and 5 of subparagraph (vi) of this paragraph. The value of the assets of the taxpayer consisting of real property or marketable securities is the fair market value thereof and the value of assets other than real property or marketable securities is the value shown on the books and records of the taxpayer in accordance with generally accepted accounting principles, provided, however, that such values will be adjusted, if necessary, so as to produce the gross value thereof. In addition, where the use of monthly values is impractical or inappropriate, for example in the case of real property, the Commissioner may permit the use of less frequent valuations, but not less than annual.
(v) For purposes of subparagraph (iii)(A) of this paragraph, a taxpayer will be considered to receive a distributive share of another unincorporated entity's income, gain, loss, deduction, credit or basis that is materially greater than its share of any other item if it appears that the taxpayer has received a special allocation of one or more items of income, gain, loss, deduction, credit, or basis under an arrangement designed to avoid the tax.
(vi) The provisions of this paragraph (4) are illustrated below:
Example 1: In 1996, Partnership A is engaged directly in the purchase and sale of stocks and securities for its own account in the City. Partnership A also is a limited partner in Partnership B, which is engaged in the purchase and sale of securities for its own account in the City. Partnership A also is a non-managing member of Limited Liability Company C (a subchapter K limited liability company as defined in Administrative Code § 11-126), which is a securities dealer in the City. C is subject to tax on all of its income. Partnership B is wholly exempt from tax. Partnership A is not eligible for the full self-trading exemption under paragraph (1); however, Partnership A qualifies as primarily engaged in activities described in subparagraphs (i)(A), (i)(B) or (i)(C) of this paragraph (4). Therefore, A is not taxable on its own self-trading activity or on its share of B's income from self-trading. A is taxable on its share of C's income, gains, losses and deductions, including any income, etc. from C's own self-trading activity. Partnership A is not treated as a dealer solely by reason of its membership in C.
Example 2: The facts are the same as in Example 1 except that C is also a limited partner in Partnership D which is engaged solely in the purchase and sale of securities for its own account in the City. C's interest in Partnership D represents less than 90 percent of C's gross assets. Partnership D is exempt from tax because it is solely trading for its own account. C is taxable on its share of D's self-trading income because C does not qualify as primarily engaged in the activities described in subparagraphs (i)(A), (i)(B) or (i)(C) of this paragraph 4. A is taxable on its share of C's income, gains, losses and deductions, including C's share of D's self-trading income, etc.
Example 3: The facts are the same as in Example 2 except that C's interest in Partnership D represents 95 percent of C's gross assets. C qualifies as primarily engaged in the activities described in subparagraphs (i)(A), (i)(B) or (i)(C) of this paragraph, i.e., C qualifies for the partial self-trading exemption. Therefore, C is not taxable on its share of D's self-trading income, gains, losses and deductions. A is taxable on its share of C's income, gains, losses and deductions, other than C's share of D's self-trading income, etc.
Example 4: In 1996, Partnership A is a general partner in Partnerships B, C and D, each of which engages in an unincorporated business in the City. Partnership A also purchases and sells stocks and securities for its own account. The gross value of A's partnership interests in Partnerships B, C and D is $1,000,000. Partnership A enters into a number of repurchase agreements and reverse repurchase agreements. The gross value of A's securities portfolio excluding the reverse repurchase agreements is $1,000,000. The repurchase agreements represent liabilities on Partnership A's balance sheet of $8,500,000 while the reverse repurchase agreements have a gross value of $8,500,000. Based on the gross value of Partnership A's assets, including the reverse repurchase agreements but excluding the repurchase agreements, it is primarily engaged in activities described in subparagraphs (i)(A), (i)(B) or (i)(C) of this paragraph; however, the Commissioner may exercise his or her discretion to either offset the value of the reverse repurchase agreements by the amount of the repurchase agreements or to exclude the value of the reverse repurchase agreements from the determination as to whether A meets the 90-percent-of-assets requirement of subparagraph (ii) because the use of gross values does not accurately represent the activity of Partnership A in the City.
Example 5: Partnership A manufactures machine parts in the City at a factory building that it owns. The building has a gross value of $30x and is subject to a mortgage of $10x. Partnership A also has inventory worth $2x and a portfolio of stocks and securities worth $1x. Because the building is property as defined in paragraph (3) of subdivision (g) of this section, 90% of A's assets are assets described in subparagraphs (ii)(A) through (ii)(C) of this paragraph (4) ($30x (building) + $1x (stocks and securities).) However, because the building is used principally in A's business, the Commissioner may determine that including the value of the building in the calculation does not accurately reflect A's primary activities and may exercise his or her discretion to exclude the value of the building.
Example 6: Partnership A is a 60% general partner in Partnership B, which is engaged in the operation of a business in the City. Partnership B also owns a portfolio of stocks that it trades for its own account. The value of B's portfolio is $30x. The gross value of B's other assets, none of which is described in subparagraphs (ii)(A) through (ii)(C) of this paragraph (4), is $20x. Therefore the value of B's portfolio assets is only 60% of the value of B's assets and B does not qualify for the partial exemption. Because A is a general partner in B, A does not qualify as an investor with respect to its interest in B and is subject to the UBT on its share of the self-trading income of B. Partnership A also owns a 90% limited partnership interest in Partnership C, which is engaged solely in trading stocks and securities for its own account in the City. The value of A's interest in C is $175x. Partnership A contributes its interest in C to Partnership B to enable Partnership B to qualify for the partial exemption. However, following the contribution, the partnership agreement for Partnership B is amended to allocate to A all of the income, gains, losses and deductions from the interest in Partnership C. After the contribution, the value of B's assets described in subparagraphs (ii)(A) through (ii)(C) of paragraph (4) will be $205 or 91% of B's total assets. As a result, B will qualify for the partial exemption and A would qualify as an investor with respect to Partnership B and would not be taxed on its share of B's self-trading income. However, A's distributive share of the income, etc. from Partnership C is materially greater than its distributive share of all other items of income, etc. of Partnership B. Because A contributed its interest in C to Partnership B solely to permit A to avoid tax on its share of B's self trading income, A is not considered to hold its interest in Partnership B as an investor and, consequently, A does not qualify for the partial self-trading exemption with respect to its distributive share of the self-trading income of B.
(vii) The provisions of this paragraph (4) do not apply to individuals. See 19 RCNY § 28-02(a)(7)(i), which provides that an individual is not considered to be engaged in activities carried on by unincorporated entities in which the individual holds an interest.
(5) The provisions of this subdivision (g) do not apply where an unincorporated entity is taxable as a corporation for Federal income tax purposes. Where such an entity is not taxable under Chapter 6 of Title 11 of the Administrative Code, its status as an unincorporated business under Chapter 5 of Title 11 of the Administrative Code will be determined under other subdivisions of this section without regard to the provisions of this subdivision (g).
(h) Holding, leasing or managing real property. (Administrative Code § 11-502(d)).
(1) General. Notwithstanding the provisions of 19 RCNY § 28-02(a), an owner of real property, a lessee or a fiduciary shall not be deemed engaged in an unincorporated business solely by reason of holding, leasing or managing (including operating) real property for his, her or its own account. This provision does not apply to any individual or other unincorporated entity who or which manages and operates real property as an agent of an owner or lessee of the property or to a dealer holding real property primarily for sale to customers in the ordinary course of a trade or business.
(2) Application of this subdivision.
(i) For taxable years beginning before July 1, 1994, where the holding, leasing or managing of real property relates to property used in or connected with an unincorporated business otherwise regularly carried on by an individual or unincorporated entity, any gains, profits, rents and other income from the property will be includible in the unincorporated business gross income of the individual or entity.
(ii) For taxable years beginning on or after July 1, 1994, if an owner of real property or lessee or fiduciary who is holding, leasing or managing real property, other than as a dealer, is also carrying on an unincorporated business in whole or in part in the City, the holding, leasing or managing of the real property will not be considered an unincorporated business if, and only to the extent that, the real property is held, leased or managed for the purpose of producing rental income or gain on the sale of such property other than in the ordinary course of a trade or business. For purposes of this subparagraph (ii), the operation at such real property of a trade, business, profession or occupation, including, but not limited to, a garage, restaurant, laundry or health club, shall be considered incidental to the holding, leasing or managing of such real property and shall not be considered an unincorporated business, provided such trade, business, profession or occupation is conducted solely for the benefit of, and as an incidental service to, tenants at such real property, and such trade, business, profession or occupation is not open or available to the general public.
(iii) For taxable years beginning on or after January 1, 1996, if an owner, lessee or fiduciary that is holding, owning or leasing or managing real property operates a garage, parking lot or other similar facility at such real property that is open or available to the general public, the provision of parking, garaging or motor vehicle storage services on a monthly or longer term basis at such garage or other facility shall not be considered an unincorporated business carried on by the taxpayer if, and only to the extent that, such services are provided to tenants at such real property as an incidental service to such tenants. See paragraphs (8) and (9) of 19 RCNY § 28-06(d) regarding the exclusion of income and the disallowance of expenses relating to the provision of parking services to tenants. Notwithstanding the foregoing provisions of this subparagraph (iii), if an owner, lessee or fiduciary holding leasing or managing real property who operates a garage or other similar facility at the property that is open to the public, does not satisfy the reporting requirements of 19 RCNY § 28-18(j), the provision of monthly or longer term parking services to tenants at the property will be considered the conduct of an unincorporated business subject to tax and will not be considered incidental to the holding, leasing or managing of the property.
(iv) For purposes of subparagraphs (ii) and (iii) above, a determination of whether a trade, business, profession or occupation carried on at real property is open to the general public shall be based on all of the facts and circumstances. Among the facts and circumstances indicating that a business is open to or available to the general public is the presence of a sign identifying, or signifying the presence of, such business of sufficient size and location as to be readily visible to the public, unless such sign clearly indicates that such business is private and not open to the public. However, if the business is in fact open to the public, the absence of a sign is not relevant.
Example (1): An individual, not otherwise engaged in an unincorporated business, who owns an apartment house leased unfurnished to 150 tenants and who, in consideration of the payment of rent received from tenants, supplies janitor service, elevator service and such other services as are generally incident to the operation of an apartment house in addition to the usual rights of occupancy, is not deemed to be engaged in an unincorporated business by reason of his activities relating to the ownership and management of the apartment house. On the other hand, the operation of a hotel open to the public for accommodations of short duration is not the holding, leasing or management of real property and would constitute an unincorporated business activity the income from which would be subject to the unincorporated business tax. In taxable years beginning before July 1, 1994, rents from store properties located in the hotel building are includible in the unincorporated business gross income of the individual where such individual is in the business of hotel keeping in such building. However, in taxable years beginning on or after July 1, 1994, while the operation of the hotel will constitute the conduct of an unincorporated business, rents from store properties located in the hotel would not be includible in the unincorporated business gross income from that unincorporated business.
Example (2): In a taxable year beginning before July 1, 1994, an individual is engaged in a manufacturing business carried on in a building owned by him. His business requires the use of one-half of the building, and the unused portion of the building is rented to tenants. The rental income is subject to the unincorporated business income tax since such income results from the use of an asset connected with the taxpayer's business. In taxable years beginning on or after July 1, 1994, the rental income would not be subject to tax; however, the income from the manufacturing business would be taxable and not excluded as part of the rental activity because it is not carried as an incidental service to the tenants in the property even though the manufacturing business is not generally open to or available to the general public. No deduction would be allowed for one-half of the expenses relating to the property and, on a sale of the building, one-half of the gain would be taxable. See 19 RCNY § 28-05(b)(12) and (c)(11) and 19 RCNY § 28-06(d)(8) of these rules.
Example (3): Partnership A owns a rental office building in the City. Partnership A operates a garage adjacent to the building that is intended solely for the use of tenants in the building and not open to the general public. There is a sign, clearly visible from the street reading "Private Garage" at the door to the garage, which is kept open during the day. Tenants are assigned a prearranged number of parking spots at no additional rent. The operation of the garage at the building is not considered an unincorporated business because it is operated as an incidental service to the tenants in the building and is not considered to be open to the public. The result would be the same if the tenants paid additional rent for the parking spaces or if the number of, and amount paid for, parking spaces were separately negotiated with the landlord.
Example (4): The facts are the same as in example 3 except that the sign at the garage door reads "Park," the door is open and inside the garage are posted parking rates for public and tenant parking. The garage is considered to be open to the general public. Certain tenants receive a fixed number of parking spaces for a term coextensive with their lease in the building at no additional rent. Other tenants are not given parking spaces pursuant to their leases but may separately contract for monthly or longer term parking spaces. Tenants who do not receive or contract for monthly or longer term parking spaces may enter the garage and park on an hourly, daily, weekly or monthly basis. Employees of tenants may also individually enter the garage and park on an hourly, daily, weekly or monthly basis. Income from parking services rendered on a monthly or longer term basis received from tenants is excluded from unincorporated business gross income provided the reporting requirements of Administrative Code § 11-502(d) and 19 RCNY § 28-18(j) are met. See 19 RCNY § 28-05(c)(11). Income from parking services rendered on a less than monthly basis rendered to tenants and income from all parking services rendered to tenants' employees and the public on any basis is included in unincorporated business gross income. If garage space is provided to tenants either as part of their lease or under separate long-term contracts, the fact that the tenant permits the spaces to be used by its employees does not render the parking income taxable; however, parking services provided under long-term contracts with persons who are not tenants will be taxable notwithstanding that those persons are employees of tenants.
(i) Sales representative. (Administrative Code § 11-502(e)).
(1) General. Notwithstanding the provisions of 19 RCNY § 28-02(a) through (e), an individual, other than one who maintains an office or employs one or more assistants or otherwise regularly carries on a business, shall not be deemed engaged in an unincorporated business solely by reason of selling goods, wares or merchandise for more than one enterprise. The employment of clerical and secretarial assistance shall not be deemed the employment of assistants. In addition, office space or similar business space utilized solely for the display of merchandise and/or for the maintenance and storage of records normally used in the course of business, shall not be deemed an office for purposes of this section.
(2) Maintenance of an office.
(i) An individual maintains an office within the meaning of this subdivision (i) when, in connection with his selling activities, he occupies, has, uses or operates an office or desk room the expenses of which are borne by the individual without substantial reimbursement by any of his principals. Ordinarily, the use of general space in an individual's home for such limited purposes as receiving mail, preparing reports or performing clerical work relating to the selling activities will not, of itself, constitute the maintaining of an office.
(ii) Although reimbursement for office expenses need not be exactly 100 percent to be substantial, the repayment must be sufficiently large to indicate that such items are being absorbed by the principal. Generally, reimbursement of 80 percent or more of such expenses, will be deemed to be substantial. The receipt by an individual of an expense allowance not bearing a clear relationship to the actual office expenses incurred by the individual or the receipt of a higher rate of commission or an extra commission allowance measured by the amount or volume of business done by the individual will not be deemed to be reimbursement for purposes of this subdivision (i).
(3) Employment of assistants. An individual, who engages assistants in connection with his selling activities, employs one or more assistants for the purpose of this subdivision (i) when
(i) he is the employer of the assistant or assistants in an employer and employee relationship within the meaning of 19 RCNY § 28-02(e), or
(ii) he engages the services of an assistant or assistants on a permanent or regular basis (as distinguished from a temporary or occasional basis) without regard to whether the relationship of employer and employee exists, or
(iii) under any arrangement with a principal, he directly or indirectly pays the compensation of an assistant or assistants employed by the principal. Where an individual is specifically reimbursed by a principal for compensation paid to assistants, he will not be deemed to be employing assistants if the principal has the right to hire or terminate the services of the assistant or to fix the terms of the employment. The receipt by the individual of a flat allowance not bearing a clear relationship to compensation paid to assistants, or the receipt of a higher rate of commission or an extra commission or allowance measured by the amount or volume of business done by the individual, will not be deemed to be reimbursement for the purpose of this section.
(4) Selling activities of broker, independent agent or contractor.
(i) A sales representative, selling goods, wares, merchandise or insurance, other than one who maintains an office or employs one or more assistants or otherwise regularly carries on a business, may not be deemed engaged in an unincorporated business solely by reason of selling for more than one enterprise, but the fact that he is selling for more than one enterprise will nevertheless be considered together with other indicia of self-employment to determine whether the sales representative is engaged in an unincorporated business. Furthermore, a sales representative whose principals do not exercise the direction and control over his activities to the extent necessary in an employer-employee relationship, will be considered an independent contractor and subject to the unincorporated business tax even though he does not maintain an office or employ assistants.
(ii) Where it is determined that an individual is engaged in an unincorporated business by reason of maintaining an office or employing assistants or selling goods, wares, merchandise or insurance as an independent contractor or agent, such determination will apply to other services as a salesman or sales representative performed by the individual as an employee or corporate officer unless such services as an employee or corporate officer do not constitute part of the taxable unincorporated business otherwise engaged in by the individual. The question of whether selling services performed as an employee or corporate officer are part of a business regularly carried on by the individual or are connected with an unincorporated business conducted by the individual shall be determined in accordance with the provisions of 19 RCNY § 28-02(e)(4).
(j) Exempt trusts and organizations. (Administrative Code § 11-502(f)). A trust or other unincorporated organization which by reason of its purposes or activities is exempt from Federal income tax shall not be deemed an unincorporated business. Whether a trust or other unincorporated entity is exempt from Federal income taxes for the purposes of this subdivision (j) shall be determined without regard to whether, pursuant to Section 511 of the Internal Revenue Code, it is subject to Federal income taxes on unrelated business income. This subdivision (j) applies only to those trusts and organizations which are exempt from Federal income taxes solely by reason of the provisions of subchapter F, subtitle A, of the 1954 Internal Revenue Code, pertaining to such organizations as qualified pension, profit-sharing, stock bonus and certain other employee benefit plans, organizations of the class or type commonly known as religious, charitable, scientific or educational organizations, certain business or civic leagues, labor or agricultural organizations, social clubs, fraternal associations and various other nonprofit organizations which operate for and serve a public rather than a private interest. If the provisions of this subdivision (j) do not apply to a trust or an organization, the unincorporated business tax status of such trust or organization shall be determined under the other provisions of these regulations.
