Taxpayer holding stock of subsidiary; deductions from net worth; "subsidiary" defined

Any taxpayer which holds capital stock of a subsidiary during all or part of any year may, for the purposes of the tax imposed by this act, deduct from its net worth, the following amount: (a) In the case of a subsidiary which is taxable under this act, such proportion of the average value of such holdings, less net liabilities (if any) to such subsidiary, as corresponds to 50% of the ratio of the subsidiary's taxable net worth, for the same year under this act, to its entire net worth; or (b) In the case of a subsidiary subject to a franchise tax measured by gross receipts under any other law of this State, such proportion of the average value of such holdings, less net liabilities (if any) to such subsidiary, as corresponds to 50% of the ratio of the subsidiary's business within the State to its business everywhere during its next preceding taxable year under such law; or (c) In the case of a subsidiary which is a bank as defined in R.S. 54:9-1, 50% of the difference between the average value of such holdings for the same year and net liabilities (if any) to such subsidiary; or (d) In the case of a subsidiary which is a financial business as defined in section 2 of P.L.1946, c. 174 (C. 54:10B-2(b)), such proportion of the average value of such holdings, less net liabilities (if any) to such subsidiary, as corresponds to 50% of the subsidiary's allocation fraction for the same year determined under section 8 of P.L.1946, c. 174 (C. 54:10B-8); or (e) In the case of a subsidiary which is a stock, mutual or assessment insurance company organized or existing under the laws of this State or under the laws of another state or foreign country, such proportion of the average value of such holdings, less net liabilities (if any) to such subsidiary, as corresponds to 50% of the ratio which the amount of taxable premiums, as defined in sections 4 and 5 of P.L.1945, c. 132 and section 1 of P.L.1950, c. 186 (C. 54:18A-4, 54:18A-5, and 54:18A-5.1), collected by the subsidiary in the same year, bears to the total amount of all premiums collected by the subsidiary in the same year which would be taxable premiums if all such premiums were on account of business in this State; or (f) In the case of a subsidiary which is a railroad as defined in section 2 of P.L.1941, c. 291 (C. 54:29A-2), such proportion of the average value of such holdings, less net liabilities (if any) to such subsidiary, as corresponds to 50% of the ratio which the number of miles of all track over which the subsidiary operates in this State in the same year bears to the total number of miles of all track over which the subsidiary operates everywhere in the same year. For the purpose of this section, a subsidiary shall be deemed to be any corporation in which a taxpayer is the owner of at least 80% of the total combined voting power of all classes of stock entitled to vote and of at least 80% of the total number of shares of all other classes of stock except nonvoting stock which is limited and preferred as to dividends.