1. (a) In the case of any taxpayer which allocates within and without New York State its business income, business capital and alternative business income and which owns no real property, within or without New York State, and whose ownership of tangible personal property, within and without New York State, is comprised solely of furniture, fixtures and other office equipment, the commissioner may, upon application of the taxpayer or upon the commissioner's own motion, eliminate the property factor in the calculation of the taxpayer's business allocation percentage or alternative business allocation percentage. In such a case, the commissioner may substitute, as a third factor, the percentage which the taxpayer's business expenses, other than salaries and wages, incurred or expended within New York State bear to the total of such expenses within and without New York State.

2. (b) The taxpayer applying for the discretionary adjustment described in subdivision (a) of this section must annually file its report and calculate its business allocation percentage and alternative business allocation percentage using the statutory formulas described in sections 4-2.2 of this Part and 210(3-a)(a) of the Tax Law, respectively. It must attach a statement to the report setting forth:

   1. (1) the items and value of all tangible personal property owned by it; and

   2. (2) the items of its business expenses, other than salaries and wages, incurred or expended within New York State together with the items of such expenses incurred or expended within and without New York State.

      The commissioner may require any corporation to provide under oath any additional information the commissioner deems necessary to make such adjustment.

3. (c) The term business expenses includes only expenses used in the calculation of the taxpayer's entire net income which are incurred or expended in service, maintenance and operation and which are of a nature as may be allocated within and without the State, such as:

   1. (1) rent;
   2. (2) office supplies;
   3. (3) travel or entertainment;
   4. (4) postage or communication;
   5. (5) trucking, shipping or delivery;
   6. (6) local property taxes;
   7. (7) income, excise or franchise taxes other than Federal taxes;
   8. (8) license fees;
   9. (9) itemized general expense; and
   10. (10) itemized miscellaneous expense.

4. (d) The term business expenses does not include:

   1. (1) wages, salaries or other compensation;
   2. (2) interest paid;
   3. (3) depreciation, depletion or amortization;
   4. (4) contributions or gifts;
   5. (5) pension, retirement, profit-sharing payments or bonuses;
   6. (6) bad debts;
   7. (7) losses;
   8. (8) advertising;
   9. (9) repairs;
   10. (10) legal expense;
   11. (11) insurance premiums;
   12. (12) accounting; and
   13. (13) dues or subscriptions.
5. (e) The items described in subdivisions (c) and (d) of this section are not necessarily exclusive, but are indicative of the character of business expenses that may be used in determining the substitute percentage.

Tax Law, § 210(8)