State corporate income tax laws generally assume that taxpayers
are operating entities with a physical location and employees
somewhere. For example, the apportionment formula under the Uniform
Division of Income for Tax Purposes Act, with its property,
payroll, and receipts factors, contemplates an operating entity.
Decision-makers at the New York City Department of Finance have notified practitioners that the Department is actively considering the implementation of a new unincorporated business tax ("UBT") audit policy targeted at investment partnerships, such as hedge funds and private equity funds.