A company’s receipts were allocated to New York City based on the location of its consultants and employees, including salespeople.Receipts Were From Client SubscriptionsThe company argued that only its consultants and research managers should be taken into account in calculating the receipts factor. On the other hand, the City argued that it was solely the salespeople whose efforts generated the company’s service receipts.However, the Tax Appeals Tribunal rejected both of those positions. The receipts were from clients who paid the company a fixed price for a subscription service. The service was produced through the efforts of both the independent consultants and the company’s employees.Reasonable Method of AllocationA rule authorized allocation based on relative values or time spent within and outside the City, or another reasonable method. Accordingly, the Tribunal calculated a receipts factor for each of the tax years at issue. For example, the Tribunal determined the compensation paid to consultants in the City as a percentage of their worldwide compensation. The case was remanded to the administrative law judge to recalculate the company’s liability using the Tribunal’s receipts factors.Gerson Lehrman Group, Inc., New York City Tax Appeals Tribunal, TAT(E)08-79(GC), TAT(E)12-38(GC), and TAT(E)12-39(GC), December 28, 2017, ¶600-845Login to read more tax news on CCH® AnswerConnect or CCH® Intelliconnect®.Not a subscriber? Sign up for a free trial or contact us for a representative.