1. (a) Every corporation organized under the laws of New York State which is authorized to do a banking business, or a corporation organized under the laws of New York State which is doing a banking business, is a banking corporation. Banking corporations organized in New York State include commercial banks, trust companies, limited purpose trust companies, subsidiary trust companies, savings banks, savings and loan associations, agreement corporations having an agreement or undertaking with the Federal Reserve Board under section 25 of the Federal Reserve Act and the New York Business Development Corporation.
2. (b) Every corporation organized under the laws of any other state which is doing a banking business is a banking corporation. Banking corporations organized in any other state include commercial banks, trust companies, savings banks, savings and loan associations and agreement corporations having an agreement or undertaking with the Federal Reserve Board under section 25 of the Federal Reserve Act.
3. (c) Every corporation organized under the laws of any other country which is doing a banking business is a banking corporation. Banking corporations organized in any other country include commercial banks and trust companies.
4. (d) Every national banking association organized under the authority of the United States which is doing a banking business is a banking corporation.
5. (e) Every Federal savings bank which is doing a banking business is a banking corporation.
6. (f) Every Federal savings and loan association which is doing a banking business is a banking corporation.
7. (g) Every production credit association created under the Federal Farm Credit Act of 1933, all of whose stock held by the Federal Production Credit Corporation has been retired, which is doing a banking business is a banking corporation.
8. (h) The Mortgage Facilities Corporation created by chapter 564 of the Laws of 1956 of New York State is a banking corporation.
9. (i) Every other corporation organized under the authority of the United States, including an Edge Act corporation organized under section 25(a) of the Federal Reserve Act, which is doing a banking business is a banking corporation.

10. (j) Other.

    1. (1) Example: Example 1: ​ Example 2: ​

       1. (i) Any corporation whose voting stock is 65 percent or more owned or controlled, directly or indirectly, by a bank holding company or by a corporation described in any of the foregoing subdivisions of this section is a banking corporation if the requirements set forth in this subparagraph are met. The corporation whose voting stock is so owned or controlled must be principally engaged in a business which:

          1. (a) might be lawfully conducted by a corporation subject to article 3 of the New York State Banking Law or by a national banking association; or
          2. (b) is so closely related to banking or managing or controlling banks as to be a proper incident thereto, as set forth in paragraph (8) of subsection (c) of section 4 of the Federal Bank Holding Company Act of 1956, as amended (12 USC 1843[c][8]).

       2. (ii) For purposes of subparagraph (i) of this paragraph, the phrase business which might be lawfully conducted means the nature of business, regardless of where such business is conducted, that a corporation organized pursuant to article 3 of the New York State Banking Law or a national banking association having its principal office in New York State may conduct:

          1. (a) without the need for a specific grant of authorization by the appropriate regulatory authorities; or
          2. (b) with a specific grant of authorization if such corporation or association has in fact received such authorization from the appropriate regulatory authority.

       3. (iii) The test of ownership for purposes of this paragraph is actual beneficial ownership rather than mere record title as shown by the stock books of the issuing corporation. A corporation may be the actual beneficial owner of voting stock of another corporation even though it has conferred the right to vote such stock on others, by means of a proxy, voting trust or otherwise. The term control for purposes of this paragraph refers to all cases where one corporation directly or indirectly possesses the power to dictate or influence the management and policies of another corporation, whether through the ownership of the voting stock of such corporation or the ownership of the voting stock of another corporation which possesses that power. The decision as to whether or not a corporation is controlled by another corporation will be determined by the facts in each case.

          Example:

          Corporation X owns 60% of the voting stock of corporation Y. The remaining stock of corporation Y is owned by three employees of corporation X. These employees have agreed in writing to sell their stock to corporation X when they leave the corporation. As part of the agreement, the employees have given corporation X their voting proxy. Corporation X owns or controls 65% or more of the voting stock of corporation Y.

       4. (iv) The provisions of this paragraph are illustrated in the following examples:

          Example 1:

          A Federal bank holding company doing business in New York State owns 100% of the voting stock of bank A and 60% of bank B. The bank holding company also owns 100% of the voting stock of corporation C. Corporation C owns 70% of the voting stock of corporation D. Bank A owns 80% of the voting stock of corporation E. Bank B owns 100% of the voting stock of corporation F. Corporation E owns 70% of the voting stock of corporation G and corporation F owns 30% of the voting stock of corporation G. This can be diagramed as follows:

          ​

          Both banks A and B are commercial banks organized under the laws of New York State and subject to article 3 of the New York State Banking Law. Corporations D, E and F are principally engaged in New York State in a business which might be lawfully conducted by bank A or B. Corporation G is principally engaged in New Jersey in a business which might be lawfully conducted by bank A or B. Corporation C is not principally engaged in a business which might be lawfully conducted by bank A or B or by a national banking association or is so closely related to banking or managing or controlling banks as to be a proper incident thereto, as set forth in section 4(c)(8) of the Federal Bank Holding Company Act of 1956.

          The bank holding company owns or controls, directly or indirectly:

          100% of Bank A

          60% of Bank B

          100% of Corporation C

          70% of Corporation D (100% of C × 70% of D)

          80% of Corporation E (100% of A × 80% of E)

          60% of Corporation F (60% of B × 100% of F)

          74% of Corporation G (100% of A × 80% of E × 70% of G) +

          (60% of B × 100% of F × 30% of G)

          Banks A and B are banking corporations because they are commercial banks organized under the laws of New York State. Corporations D, E and G are banking corporations because 65% or more of their voting stock is owned or controlled, directly or indirectly, by the bank holding company and they are principally engaged in a business which might be lawfully conducted by a corporation subject to article 3 of the New York State Banking Law. Although the bank holding company owns 100% of the voting stock of corporation C, it is not a banking corporation because it is not principally engaged in a business which might be lawfully conducted by a corporation subject to article 3 of the New York State Banking Law or by a national banking association, or which is so closely related to banking or managing or controlling banks as to be a proper incident thereto, as set forth in section 4(c)(8) of the Federal Bank Holding Company Act of 1956. Corporation F is a banking corporation because bank B owns 100% of its voting stock and it is principally engaged in a business which might be lawfully conducted by a corporation subject to article 3 of the New York State Banking Law.

          Example 2:

          A savings and loan holding company registered under the Federal National housing Act owns 100% of the voting stock of corporation L, 80% of the voting stock of corporation M and 100% of the voting stock of savings and loan association N. This can be diagramed as follows:

          ​

          Corporation L is principally engaged in a business which might be lawfully conducted by a corporation subject to article 3 of the New York State Banking Law and is therefore a banking corporation. Corporation M is principally engaged in a business which might be lawfully conducted by a savings bank but is not a business which might be lawfully conducted by a corporation subject to article 3 of the New York State Banking Law or by a national banking association, or is so closely related to banking or managing or controlling banks as to be a proper incident thereto, as set forth in section 4(c)(8) of the Federal Bank Holding Company Act of 1956. Accordingly, corporation M is not a banking corporation.

    2. (2) Notwithstanding the provisions of paragraph (1) of this subdivision, a corporation principally engaged in a business described in section 183, 184 or 186 of the Tax Law shall not be subject to the tax imposed by article 32 of the Tax Law for any part of the taxable year if any of the business receipts derived from the conduct of such business are from other than a corporation:

       1. (i) which owns or controls, directly or indirectly, 65 percent or more of its voting stock; or
       2. (ii) whose voting stock is 65 percent or more owned or controlled, directly or indirectly, by the corporation engaged in such business; or
       3. (iii) whose voting stock is 65 percent or more owned or controlled, directly or indirectly, by the same interest as the corporation engaged in such business.
    3. (3) Any corporation described in paragraph (1) of this subdivision which was subject to the tax imposed by article 9-A of the Tax Law for its taxable year ending during 1984 may, on or before the due date for filing its return (determined with regard to extensions of time for filing) for its taxable year ending during 1985, make a one-time election to continue to be taxable under article 9-A. Such election shall continue to be in effect until revoked by the taxpayer. In no event shall such election or revocation be for a part of a taxable year. The election is made by the filing of a tax return pursuant to article 9-A of the Tax Law and the revocation is made by the filing of a tax return pursuant to article 32 of the Tax Law.
    4. (4) For purposes of this subdivision, the phrase principally engaged in a business means that a corporation derives more than 50 percent of its gross receipts from such business during its taxable year for Federal income tax purposes. Gross receipts from various aspects of a corporation's business may be aggregated to determine what business the corporation is principally engaged in. For example, corporation P derives 40 percent of its gross receipts from a business which might be lawfully conducted by a corporation subject to article 3 of the New York State Banking Law, 40 percent of its gross receipts from a business which is so closely related to banking or managing or controlling banks as to be a proper incident thereto, and 20 percent of its gross receipts from a business which may not be lawfully conducted by a corporation subject to article 3 of the New York State Banking Law and is not so closely related to banking or managing or controlling banks as to be a proper incident thereto. Since corporation P derives more than 50 percent of its total gross receipts from a business which might be lawfully conducted by a corporation subject to article 3 of the New York State Banking Law or is so closely related to banking or managing or controlling banks as to be a proper incident thereto, the “principally engaged in a business” requirement set forth in subparagraph (1)(i) of this subdivision is met.

Tax Law, § 1452(a), (d)