1. (a) Gross income from a loan or financing lease is allocated to New York State if such income is attributable to a loan or financing lease which is located in New York State. A loan or financing lease is located where the greater portion of income-producing activity relating to the loan or financing lease occurred; provided, however:

   1. (1) In the case of a taxpayer described in subdivision (a), (b), (c), (d), (e), (f) or (i) of section 16-2.5 of this Title, a loan or financing lease that is attributed by such taxpayer to a branch without New York State is presumed to be properly attributed, provided that such presumption may be rebutted if the Tax Commission demonstrates that the greater portion of income-producing activity relating to the loan or financing lease did not occur at such branch. Where such presumption has been rebutted by the Tax Commission, the loan or financing lease shall be presumed to be within New York State if the taxpayer had a branch within New York State at the time the loan or financing lease was made. However, the taxpayer may rebut such presumption by demonstrating that the greater portion of income-producing activity relating to the loan or financing lease did not occur within New York State. For purposes of this section, a loan or financing lease is made when such loan or financing lease is approved.
   2. (2) In the case of a taxpayer described in subdivision (a), (b), (c), (d), (e), (f) or (i) of section 16-2.5 of this Title which records a loan or financing lease on the books of a place without New York State which is not a branch, it shall be presumed that the greater portion of income-producing activity related to such loan or financing lease occurred within New York State if the taxpayer had a branch within New York State at the time the loan or financing lease was made. The taxpayer may rebut such presumption by demonstrating that the greater portion of income-producing activity related to the loan or financing lease did not occur within New York State. A loan or financing lease is made when such loan or financing lease is approved.

   3. (3) In the case of a taxpayer which is a bank holding company or a taxpayer described in subdivision (g) or (j) of section 16-2.5 of this Title, a loan or financing lease attributed by such taxpayer to a bona fide office without New York State is presumed to be properly attributed, provided that such presumption may be rebutted if the Tax Commission demonstrates that the greater portion of income-producing activity relating to the loan or financing lease did not occur without New York State.

      (b)

   4. (1) The term loan means any loan, whether the transaction is represented by a promissory note, security, acknowledgment of advance, due bill or any other form of credit transaction, if the related asset is properly recorded in the financial accounts of the taxpayer. Loans include the taxpayer's portion of a participation in a loan.
   5. (2) The term financing lease means a lease where the taxpayer is not treated as the owner of the property for purposes of computing alternative entire net income.
   6. (3) The phrase gross income from a loan or financing lease includes interest and fees, such as arrangement, commitment and management fees, but does not include the repayments of principal.
2. (c) To determine where the greater portion of income-producing activity relating to a loan or financing lease occurred, consideration is given to such activities as the solicitation, investigation, negotiation, final approval and administration of the loan or financing lease. Each loan or financing lease has its own characteristics. In some cases, one or more of the activities to be considered may not be present. The significance to be accorded to each activity depends upon the facts in each case.

3. (d) The terms solicitation, investigation, negotiation, final approval and administration are defined as follows:

   1. (1) Solicitation. Solicitation is either active or passive.

      1. (i) Active solicitation occurs when an employee of the taxpayer initiates the contact with the customer. Such activity is located at the office which the taxpayer's employee is regularly connected with, regardless of where the services of such employee were actually performed.
      2. (ii) Passive solicitation occurs when the customer initiates the contact with the taxpayer. If the customer's initial contact was not at an office of the taxpayer, the office, if any, where the passive solicitation occurred is determined by the facts in each case.
   2. (2) Investigation. Investigation is the procedure whereby employees of the taxpayer determine the credit-worthiness of the customer as well as the degree of risk involved in making a particular agreement. Such activity is located at the office which the taxpayer's employees are regularly connected with, regardless of where the services of such employees were actually performed.
   3. (3) Negotiation. Negotiation is the procedure whereby employees of the taxpayer and its customer determine the terms of the agreement (e.g.,) the amount, duration, interest rate, frequency of repayment, currency denomination and security required). Such activity is located at the office which the taxpayer's employees are regularly connected with, regardless of where the services of such employees were actually performed.
   4. (4) Final approval. Final approval is the act of employees or the board of directors of the taxpayer which legally binds the taxpayer to perform under an agreement. Such activity is located at the office which the taxpayer's employees are regularly connected with, regardless of where the services of such employees were actually performed. If the board of directors make such final approval, such activity occurred where the actual seat of management and control of the taxpayer is located.
   5. (5) Administration. Administration is the process of managing the account. This process includes bookkeeping, collecting the payments, corresponding with the customer, reporting to management regarding the status of the agreement and proceeding against the borrower if the borrower is in default. Such activity is located at the office which oversees this activity.

Tax Law, § 1454