N.Y. Comp. Codes R. & Regs. Tit. 20 §§ 3-4.2
(Tax Law, section 208(5)(e))
In the case of a corporation incorporated and commercially domiciled outside New York State, the United States Constitution prohibits the state from apportioning income or gain from intangible assets when such income or gain lacks a sufficient connection to activities or presence in the state by the corporation. For example, the income or gain from an intangible asset (i.e., a debt obligation or other security) is apportionable where the underlying activities of the recipient of the intangible income and the source of the income constitute a unitary business; or where the intangible asset or the income from the intangible asset serves an operational function in the taxpayer's business. Whether an intangible asset serves an operational function depends on the nature of the asset's use and its relation to the corporation and the corporation's activities in the state. For example, an intangible asset would serve an operational function if the asset is held to meet currently identified needs of the business, including, but not limited to, the use of the asset's income stream to pay the business's operating expenses or finance the business's functions.
N.Y. Comp. Codes R. & Regs. Tit. 20 §§ 3-4.2