TSB-A-98(17)C
Corporation Tax
September 16, 1998
New York State Department of Taxation and Finance
Taxpayer Services Division
Technical Services Bureau
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION
PETITION NO. C980223A
On February 23, 1998, a Petition for Advisory Opinion was received from
DJ&J Software, DBA Egghead Computer, 22705 East Mission, Liberty Lake, Washington
99019.
The issue raised by Petitioner, DJ&J Software, DBA Egghead Computer, is
whether, under the circumstances presented, it is subject to franchise tax under
Article 9-A of the Tax Law and has reporting obligations after it closes its
retail stores in New York State.
Petitioner submits the following facts as the basis for this Advisory
Opinion.
Petitioner is a retailer of tangible personal property. In the past,
Petitioner has generated sales through a variety of different business
activities. Petitioner has operated retail stores and sales offices located
throughout the United States and Canada, including New York. Petitioner has also
employed direct salespeople who solicited sales from corporate, government and
educational organizations. These salespeople were based throughout the country
and made sales calls to companies in New York. In addition, Petitioner sells its
products via mail order and solicits mail order sales primarily through catalogs
and other promotional materials which are sent directly to consumers. Mail order
sales are also accepted through Petitioner's Internet Web page. All items sold
through the mail order division are delivered to customers by common carrier.
All orders are accepted at its corporate headquarters, located in another state,
and are delivered from inventory stored in a warehouse also in another state.
Petitioner is currently registered with New York State for corporate franchise
tax purposes.
Petitioner has recently announced plans to close numerous retail stores
located throughout the country. Petitioner indicated that it would close all the
retail stores that it operates