1. (a) The percentage of the taxpayer's real property and tangible personal property, whether owned or rented to it, within New York State is determined by dividing the average value of such property within New York State (without deduction of any encumbrances) by the average value of all such property within and without New York State (without deduction of any encumbrances). For purposes of this section, the value of the taxpayer's real property owned and tangible personal property owned means the adjusted bases of such properties for Federal income tax purposes. However, on or before the due date for filing its report (determined with regard to extensions of time for filing) for its first taxable year commencing on or after January 1, 1987, the taxpayer may make a one-time revocable election to use fair market value, in accordance with the provisions of section 3-3.5 of this Title, as the value of all its real property owned and tangible personal property owned. Such election shall continue to be in effect until revoked by the taxpayer on a report for a subsequent taxable year. Such revocation shall be applicable starting with such taxable year. In no event shall such election or revocation be for a part of a taxable year. The election or revocation is made on the taxpayer's report for such taxable year. The value of real property and tangible personal property rented to the taxpayer must be determined in accordance with the provisions of section 4-3.2 of this Subpart. The taxpayer's real property and tangible personal property should be included only for the period covered by the report.
2. (b) The average value of real property owned and tangible personal property owned by the taxpayer is determined in accordance with the provisions of section 3-3.6 of this Title and generally is computed on a quarterly basis where the taxpayer's usual accounting practice permits such computation. However, at the option of the taxpayer, a more frequent basis (such as monthly, weekly or daily) may be used. Where the taxpayer's usual accounting practice does not permit a quarterly or more frequent computation of average value, a semiannual or annual computation may be used where no distortion of average value will result. If it appears to the Department of Taxation and Finance that averaging on an annual, semiannual or quarterly basis does not properly reflect average value, the Department of Taxation and Finance may require averaging on a more frequent basis. This applies to owned property both within and without New York State. The same method of valuation must be used consistently with respect to property within and without New York State. Any method of determining average value which is adopted by the taxpayer and accepted by the Department of Taxation and Finance may not be changed on any subsequent report without prior written consent of the Department of Taxation and Finance.
3. (c) Tangible personal property of the taxpayer is considered to be within New York State if and so long as it is physically situated or located here, even though it may be stored in a bonded warehouse. Property of the taxpayer held in New York State by an agent, consignee or factor is considered to be situated or located within New York State. Property in transit between locations of the taxpayer is considered to be at its destination for purposes of the property factor. Property in transit between a buyer and a seller which is included by a taxpayer in the denominator of its properly factor in accordance with its regular accounting practices is included in the numerator of its property factor if its destination is New York State.
4. (d) Omnibuses and other rolling equipment such as construction equipment or trucks which are located within and without New York State may be allocated to New York State by the percentage that the mileage within New York State bears to the total mileage within and without New York State, or by the percentage that the time operated within New York State bears to the total time operated within and without New York State, or by any other method approved by the Department of Taxation and Finance. Mileage or time operated while an omnibus is engaged in school bus operations must be disregarded in computing the percentage.
5. (e) The term tangible personal property means corporeal personal property, such as machinery, tools, implements, goods, wares and merchandise. It does not mean money, deposits in banks, shares of stock, bonds, notes, credits or evidences of any interest in property and evidences of debt (Tax Law, § 208[11]).
6. (f) For rules relating to discretionary adjustment of the business allocation percentage, see Subpart 4-6 of this Part.

Tax Law, § 210(3)(a)(1)