The New York Division of Tax Appeals denied a refund claim to a taxpayer that sought to apply the income sourcing rules for registered broker-dealers to accept receipts from its separate investment advisory business. The taxpayer structured its broker-dealer operations and investment advisory operations into two different single-member Limited Liability Companies (LLCs). The taxpayer claimed that it was entitled to apply the customer-based sourcing rules for registered broker-dealers under former N.Y. Tax Law § 210(3)(a)(9) to income from its investment advisory business because the LLCs were disregarded and deemed divisions under the federal check-the-box regulations. However, an Administrative Law Judge (ALJ) ruled that the taxpayer could not carry over one LLC’s status as a broker-dealer to the non-broker-dealer receipts earned by the other LLC. According to the ALJ, “a disregarded entity that is not a registered broker-dealer is not disregarded under the check-the-box regulations in determining where its receipts are sourced for New York State franchise tax purposes.” Matter of BTG Pactual NY Corp.; DTA No. 827577 (N.Y. Div. Tax App. March 7, 2019)