Generally, if a corporation is a holding company not licensed to do business in New York, but is a general partner in a partnership that is doing business in New York, then the holding company would be subject to tax in New York. (20 NCYRR 1-3.2(a)(5) under Article 9-A).
In a recent case, Shell Gas Gathering Corp. #2, New York Division of Tax Appeals, Tax Appeals Tribunal, DTA Nos.821569 and 821570, September 23, 2010, the holding company held a passive ownership interest in a limited liability company. The LLC was doing business in New York. The holding company was not. The holding company also lacked a unitary relationship with the LLC.
Regardless of those facts, the New York Tax Appeals Tribunal held the holding company had sufficient nexus due to the ownership interest in an LLC that does business in New York. According to the ruling, New York's power to tax is not required to be based on the taxpayers' own activities in New York. Rather, the power to tax is based on whether New York has given something for which it may impose a tax in return. Hence, New York satisfied this requirement because it accorded privileges and immunities that led to capital appreciation which inured to the benefit of the taxpayers.