reglab/statecodes huggingface dataset:
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.365 - USE OF THE COMBINED REPORT

Current through August 31, 2023
Section
				63-3027, Idaho Code
01.
In General
. Use of the
			 combined report does not disregard the separate corporate identities of the
			 members of the unitary group. The combined report is simply the computation, by
			 the formula apportionment method, of the unitary apportionable income
			 reportable to Idaho by the separate corporate members of the unitary group. For
			 purposes of this rule, included corporation means a corporation required to
			 file an Idaho income tax return as a result of its own activities in Idaho and
			 using a combined report. (4-6-23)
02.
Separate Computations
. Each
			 included corporation will: (4-6-23)
a. Be
			 responsible for computing and paying its tax including any minimum tax due
			 pursuant to Sections
			 63-3025 and
			 63-3025A, Idaho Code, as
			 determined by the combined report; (4-6-23)
b. Separately compute Idaho tax credits and
			 limitations, except the investment tax credit, which is applied pursuant to
			 Section 63-3029B, Idaho Code, and Rules
			 710 through
			 717 of these rules; and
			 (4-6-23)
c. Separately determine
			 and pay the permanent building fund tax required by Section
			 63-3082, Idaho Code.
			 (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.370 - APPLICATION OF SECTION 63-3027 - ALLOCATION

Current through August 31, 2023
Section
				63-3027, Idaho Code. A taxpayer
				subject to the taxing jurisdiction of Idaho allocates all of its
				nonapportionable income or loss within or without Idaho pursuant to Section
				63-3027, Idaho Code.
				(4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.375 - CONSISTENCY AND UNIFORMITY IN REPORTING

Current through August 31, 2023
Section
				63-3027, Idaho Code
01.
Year to Year Consistency
. If
			 a taxpayer departs from or modifies the method used for classifying income as
			 apportionable income or nonapportionable income in prior year Idaho returns,
			 the taxpayer is to disclose the nature and extent of all modifications in its
			 current year return. (4-6-23)
02.
State to State Consistency
. If the returns or reports filed by a
			 taxpayer with all states to which the taxpayer reports pursuant to Section
			 63-3027, Idaho Code; Article IV of
			 the Multistate Tax Compact; or the Uniform Division of Income for Tax Purposes
			 Act are not uniform in classifying apportionable and nonapportionable income,
			 the taxpayer is to disclose the nature and extent of the variance in its
			 current year Idaho return. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.385 - TAXABLE IN ANOTHER STATE: IN GENERAL

Current through August 31, 2023
Section
				63-3027(4), Idaho
				Code
01.
In General
. A
			 taxpayer is subject to the allocation and apportionment provisions of Section
			 63-3027, Idaho Code, if it has
			 income from business activity that is taxable both within and without Idaho. A
			 taxpayer's income from business activity is taxable without Idaho if the
			 taxpayer is taxable in another state within the meaning of Section
			 63-3027(4), Idaho
			 Code, as a result of that business activity. A taxpayer is taxable in another
			 state if it meets either of the following tests: (4-6-23)
a. The taxpayer is subject to one (1) of the
			 taxes specified in Section
			 63-3027(4)(a),
			 Idaho Code, as a result of its business activity in another state; or
			 (4-6-23)
b. Another state has
			 jurisdiction to subject the taxpayer to a net income tax as a result of its
			 business activity, regardless of whether the state imposes the tax on the
			 taxpayer. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.395 - TAXABLE IN ANOTHER STATE: WHEN A STATE HAS JURISDICTION TO SUBJECT A TAXPAYER TO A NET INCOME TAX

Current through August 31, 2023
Section
				63-3027(4)(b),
				Idaho Code
01.
In
			 General
. The test in Section
			 63-3027(4)(b),
			 Idaho Code, applies if the taxpayer's business activity is sufficient to give
			 the state jurisdiction to impose a net income tax by reason of the business
			 activity pursuant to the Constitution and statutes of the United States.
			 Jurisdiction to tax is not present if the state is prohibited from imposing the
			 tax due to Public Law
			 86-272, Title 15, Sections
			 381 through
			 385, United States Code. (4-6-23)
a. When determining if a state has
			 jurisdiction to subject a taxpayer to a net income tax, the jurisdictional
			 standards applicable to a state of the United States is to also apply to the
			 District of Columbia, the Commonwealth of Puerto Rico, any territory or
			 possession of the United States, and any foreign country or political
			 subdivision thereof. (4-6-23)
b.
			 The provisions of a treaty between a state and the United States are not
			 considered when determining jurisdiction to tax. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.450 - APPORTIONMENT FORMULA

Current through August 31, 2023
Section
				63-3027(10),
				Idaho Code
01.
Apportionment
			 Factors
. All of a taxpayer's apportionable income is to be apportioned
			 to Idaho using the apportionment formula set forth in Section
			 63-3027(10),
			 Idaho Code. Generally, a taxpayer's apportionment formula consists of the sales
			 factor only. Pursuant to Section
			 63-3027(10)(b),
			 however, certain taxpayers may elect an apportionment formula that includes the
			 property factor, the payroll factor, and the sales factor. See Rules
			 460 through
			 559 of these rules for general
			 rules applicable to these factors. See Rules
			 560 through
			 599 of these rules for special
			 rules and exceptions to the apportionment formula. The denominator of each
			 factor may not exceed the sum of the numerators of that factor.
			 (4-6-23)
02.
Intercompany
			 Transactions
. Intercompany transactions are to be eliminated to the
			 extent necessary to properly compute the numerators and the denominators of the
			 apportionment factors of a combined group. The apportionment factor computation
			 may not include property, payroll, or receipts of any affiliated corporation
			 unless its income is included in the combined report. (4-6-23)
03.
Rounding
. The individual
			 factors and the average apportionment factor is to be calculated six (6) digits
			 to the right of the decimal point. If the seventh digit is five (5) or greater,
			 the sixth digit is rounded to the next higher number. If the seventh digit is
			 less than five (5), the sixth digit remains unchanged and any digits remaining
			 to its right are dropped. (4-6-23)
04.
Verification of Factors
. The
			 taxpayer is to make available the fifty-one (51) state apportionment factor
			 detail when requested by the Tax Commission. Failure to do so may justify the
			 imposition of the negligence penalty provided by Section
			 63-3046(a), Idaho
			 Code. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.460 - PROPERTY FACTOR: IN GENERAL

Current through August 31, 2023
Section
				63-3027(16)(a),
				Idaho Code
01.
In
			 General
. The property factor of the apportionment formula for each trade
			 or business of the taxpayer includes all real and tangible personal property
			 owned or rented by the taxpayer and used during the taxable year in the regular
			 course of its trade or business. The term real and tangible personal property
			 includes land, buildings, fixtures, inventory, equipment, and other property of
			 a tangible nature, but does not include coin or currency. (4-6-23)
02.
Nonapportionable Income
.
			 Property used in connection with the production of nonapportionable income is
			 to be excluded from the property factor. Property used both in the regular
			 course of the taxpayer's trade or business and in the production of
			 nonapportionable income is to be included in the factor only to the extent the
			 property is used in the regular course of the taxpayer's trade or business. The
			 method of determining that portion of the value to be included in the factor
			 depends on the facts of each case. (4-6-23)
03.
Average Value
. The property
			 factor is to reflect the average value of property includable in the factor.
			 See Rule 490 of these rules.
			 (4-6-23)
04.
Denominator
. The denominator of the factor may not exceed the sum
			 of all the numerators. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.465 - PROPERTY FACTOR: PROPERTY USED FOR THE PRODUCTION OF APPORTIONABLE INCOME

Current through August 31, 2023
Section
				63-3027(16)(a),
				Idaho Code
01.
In
			 General
. (4-6-23)
a. Property is to be
			 included in the property factor if it is used, is available for use, or capable
			 of being used during the taxable year in the regular course of the taxpayer's
			 trade or business. Property held as reserves or standby facilities or property
			 held as a reserve source of materials is to be included in the factor. For
			 example, a plant temporarily idle or raw material reserves not currently being
			 processed are includable in the factor. (4-6-23)
b. Property or equipment under construction
			 during the taxable year, except inventoriable goods in process, is to be
			 excluded from the factor until the property is used in the regular course of
			 the taxpayer's trade or business. (4-6-23)
c. If the property is partially used in the
			 regular course of the taxpayer's trade or business while under construction,
			 the value of the property is to be included in the property factor to the
			 extent used. (4-6-23)
d. Property
			 used in the regular course of the taxpayer's trade or business is to remain in
			 the property factor until it is permanently withdrawn by an identifiable event
			 such as its sale, abandonment, or any event or circumstance that renders the
			 property incapable of being used in the regular course of the taxpayer's trade
			 or business. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.470 - PROPERTY FACTOR: CONSISTENCY IN REPORTING

Current through August 31, 2023
Section
				63-3027(16)(a),
				Idaho Code
01.
Year to Year
			 Consistency
. If a taxpayer departs from or modifies the method used for
			 valuing property, or for excluding or including property in the property factor
			 in prior year Idaho returns, the taxpayer is to disclose the nature and extent
			 of all modifications in its current year return. (4-6-23)
02.
State to State Consistency
.
			 If the returns or reports filed by a taxpayer with all states to which the
			 taxpayer reports pursuant to Section
			 63-3027, Idaho Code; Article IV of
			 the Multistate Tax Compact; or the Uniform Division of Income for Tax Purposes
			 Act are not uniform in valuing property and in excluding or including property
			 in the property factor, the taxpayer is to disclose the nature and extent of
			 the variance in its current year Idaho return. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.475 - PROPERTY FACTOR: NUMERATOR

Current through August 31, 2023
Section
				63-3027(16)(a),
				Idaho Code
01.
In
			 General
. The numerator of the property factor is to include the average
			 value of the real and tangible personal property owned or rented by the
			 taxpayer and used in Idaho during the taxable year in the regular course of the
			 taxpayer's trade or business. (4-6-23)
02.
Property in Transit
.
			 Property of the taxpayer that is in transit between locations is to be
			 considered to be at the destination for purposes of the property factor. If
			 property in transit between a buyer and seller is included by a taxpayer in the
			 denominator of its property factor, it is to be included in the numerator
			 according to the state of destination. (4-6-23)
03.
Mobile or Movable Property
.
			 (4-6-23)
a. The value of mobile or movable
			 property such as construction equipment, trucks, or leased electronic equipment
			 located within and without Idaho during the taxable year will be determined on
			 the basis of total time and use in Idaho as a percentage of total time and use
			 everywhere. (4-6-23)
b. An
			 automobile assigned to a traveling employee is to be included in the numerator
			 of the state to which the employee's compensation is assigned for the payroll
			 factor or in the numerator of the state in which the automobile is licensed.
			 (4-6-23)
c. The value of aircraft
			 used within and without Idaho during the taxable year will be determined by
			 multiplying the value of the aircraft by the ratio of departures from locations
			 in Idaho to total departures. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.480 - PROPERTY FACTOR: VALUATION OF OWNED PROPERTY

Current through August 31, 2023
Section
				63-3027(16)(b),
				Idaho Code
01.
In
			 General
. Property owned by a taxpayer is to be valued at its original
			 cost. As a general rule, original cost is deemed to be the basis of the
			 property for federal income tax purposes, prior to any federal adjustments at
			 the time of acquisition and adjusted by subsequent capital additions or
			 improvements and partial disposition, by reason of sale, exchange, abandonment,
			 etc. However, capitalized intangible drilling and development costs of
			 producing property is to be included in the property factor whether or not they
			 have been expensed for either federal or state tax purposes. (4-6-23)
02.
Examples
. (4-6-23)
a. A taxpayer acquired a factory building in
			 Idaho at a cost of five hundred thousand dollars ($500,000). Eighteen (18)
			 months later the taxpayer remodeled the building for a cost of one hundred
			 thousand dollars ($100,000). The taxpayer files its return on the calendar year
			 basis. The taxpayer claimed a depreciation deduction of twenty-two thousand
			 dollars ($22,000) on its current year return. The value of the building
			 included in the numerator and denominator of the property factor is six hundred
			 thousand dollars ($600,000). The depreciation deduction is not taken into
			 account in determining the value of the building for purposes of the factor.
			 (4-6-23)
b. During the current
			 taxable year, X Corporation merged into Y Corporation in a tax-free
			 reorganization pursuant to the Internal Revenue Code. At the time of the
			 merger, X Corporation owned a factory that it built five (5) years earlier at a
			 cost of one million dollars ($1,000,000). X has been depreciating the factory
			 at the rate of two percent (2%) per year. Its basis in X's hands at the time of
			 the merger is nine hundred thousand dollars ($900,000). Since Y acquired the
			 property in a tax-free transaction, Y includes the property in its property
			 factor at X's original cost of one million dollars ($1,000,000).
			 (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.485 - PROPERTY FACTOR: VALUATION OF RENTED PROPERTY

Current through August 31, 2023
Section
				63-3027(16)(b),
				Idaho Code
01.
In
			 General
. Property rented by the taxpayer is valued at eight (8) times
			 its net annual rental rate. The net annual rental rate is the annual rental
			 rate paid by the taxpayer for the property, less the aggregate annual subrental
			 rates paid by subtenants. Subrents are not deducted if they constitute
			 apportionable income because the property that produces the subrents is used in
			 the regular course of the taxpayer's trade or business when it is producing the
			 income. Accordingly, there is no reduction in its value. See Rules
			 560 and
			 565 of these rules for special
			 rules when using the net annual rental rate produces a negative or clearly
			 inaccurate value or when the taxpayer uses property at no charge or rents it at
			 a nominal rental rate. (4-6-23)
02.
Examples of Subrents
. (4-6-23)
a.
			 A taxpayer receives subrents from a bakery concession in a food market operated
			 by the taxpayer. Since the subrents are apportionable income, they are not
			 deducted from rent paid by the taxpayer for the food market. (4-6-23)
b. A taxpayer rents a five (5) story office
			 building primarily for use in its multistate business. It uses three (3) floors
			 for its offices and subleases two (2) floors to various other businesses on a
			 short-term basis because it anticipates it will need those two (2) floors for
			 future expansion of its multistate business. The rental of all five (5) floors
			 is integral to the operation of the taxpayer's trade or business. Since the
			 subrents are apportionable income, they are not deducted from the rent paid by
			 the taxpayer. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.490 - PROPERTY FACTOR: AVERAGING PROPERTY VALUES

Current through August 31, 2023
Section
				63-3027(16)(c),
				Idaho Code
01.
In
			 General
. The average value of property owned by a taxpayer is to be
			 determined by averaging the values at the beginning and end of the taxable
			 year. (4-6-23)
02.
Monthly
			 Averaging
. The Tax Commission may require or allow averaging by monthly
			 values if that method of averaging is required to properly reflect the average
			 value of the taxpayer's property for the taxable year. Averaging by monthly
			 values generally applies if there are substantial fluctuations in the property
			 values during the taxable year or if property is acquired or disposed of during
			 the taxable year. (4-6-23)
03.
Rented Property
. Rented property is averaged automatically by
			 determining the net annual rental rate of the property as set forth in Rule
			 485 of these rules.
			 (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.500 - PAYROLL FACTOR: IN GENERAL

Current through August 31, 2023
Section
				63-3027(16)(d),
				Idaho Code
01.
In
			 General
. The payroll factor of the apportionment formula for each trade
			 or business of the taxpayer includes the total amount paid for compensation
			 during the taxable year by the taxpayer in the regular course of its trade or
			 business. (4-6-23)
02.
Compensation
. For purposes of the payroll factor, compensation
			 means wages, salaries, commissions and any other form of remuneration paid to
			 employees for personal services. (4-6-23)
a.
			 Compensation includes the value of board, rent, housing, lodging, and other
			 benefits or services the taxpayer furnished to employees in return for personal
			 services if the amounts constitute income to the recipient pursuant to the
			 Internal Revenue Code. (4-6-23)
b.
			 If employees are not subject to the Internal Revenue Code, for example, those
			 employed in foreign countries, the determination of whether the benefits or
			 services would constitute income to the employees is made as if the employees
			 were subject to the Internal Revenue Code. (4-6-23)
c. If wages paid to employees are capitalized
			 into the cost of an asset that is used in the regular course of the taxpayer's
			 trade or business, these wages are included in the payroll factor.
			 (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.505 - PAYROLL FACTOR: DENOMINATOR

Current through August 31, 2023
Section
				63-3027(16)(d),
				Idaho Code
01.
In
			 General
. The denominator of the payroll factor is the total compensation
			 paid everywhere during the taxable year. Accordingly, compensation paid to
			 employees whose services are performed entirely in a state where the taxpayer
			 is immune from taxation, for example, by
			 Public Law
			 86-272, is included in the denominator of the
			 payroll factor. The denominator may not exceed the sum of all numerators.
			 (4-6-23)
02.
Example
.
			 A taxpayer has employees in States A, B, and C. However, in State C the
			 taxpayer is immune from taxation by
			 Public Law
			 86-272. The compensation paid to employees for
			 services performed in State C is assigned to that state. This compensation is
			 included in the denominator even though the taxpayer is not taxable in State C.
			 (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.510 - PAYROLL FACTOR: NUMERATOR

Current through August 31, 2023
Section
				63-3027(16)(d),
				Idaho Code. The numerator of the payroll factor is the total amount the
				taxpayer paid for compensation in Idaho during the taxable year. The tests in
				Section 63-3027(16)(e),
				Idaho Code, apply in determining whether compensation is paid in Idaho. It will
				be presumed that the total wages reported by the taxpayer to Idaho for
				unemployment insurance purposes constitute compensation paid in Idaho except
				compensation excluded by Rules
				500 through
				524 of these rules. The presumption
				may be overcome by satisfactory evidence that an employee's compensation is not
				properly reportable to Idaho for unemployment insurance purposes.
				(4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.515 - PAYROLL FACTOR: COMPENSATION PAID IN IDAHO

Current through August 31, 2023
Section
				63-3027(16)(e),
				Idaho Code
01.
In
			 General
. Compensation is paid in Idaho if one of the tests in Section
			 63-3027(16)(e),
			 Idaho Code, is met. (4-6-23)
02.
Definitions
. The following definitions are to be used for purposes
			 of the payroll factor: (4-6-23)
a. Incidental
			 means a service that is temporary or transitory in nature, or that is rendered
			 in connection with an isolated transaction. (4-6-23)
b. Base of operations means the place of a
			 more or less permanent nature where the employee starts his work and where he
			 customarily returns to receive instructions from the taxpayer or communications
			 from his customers or other persons, or to replenish stock or other materials,
			 repair equipment, or perform any other functions necessary to his trade or
			 profession. (4-6-23)
c. Place from
			 which the service is directed or controlled means the place where the power to
			 direct or control is exercised by the taxpayer. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.525 - SALES FACTOR: IN GENERAL

Current through August 31, 2023
Section
				63-3027(10)(a),
				Idaho Code
01.
In
			 General
. Sales means all gross receipts of a taxpayer not allocated as
			 nonapportionable income. The sales factor for each trade or business of the
			 taxpayer includes all gross receipts derived by the taxpayer from transactions
			 and activity in the regular course of that trade or business or otherwise
			 required to be included as apportionable income. (4-6-23)
02.
Examples
. (4-6-23)
a. If a taxpayer manufactures and sells or
			 purchases and resells goods or products, sales includes all gross receipts from
			 sales of the goods or products held primarily for sale to customers in the
			 ordinary course of the taxpayer's trade or business. Sales also includes gross
			 receipts from the sale of other property that would be properly included in the
			 taxpayer's inventory if on hand at the close of the taxable year. Gross
			 receipts means gross sales, less returns and allowances and includes all
			 interest income, service charges, carrying charges, or time-price differential
			 charges incidental to the sales. Federal and state excise taxes, including
			 sales taxes, are included in gross receipts if these taxes are passed on to the
			 buyer or included in the product's selling price. (4-6-23)
b. In the case of cost plus fixed fee
			 contracts, such as the operation of a government-owned plant for a fee, sales
			 includes the entire reimbursed cost plus the fee. (4-6-23)
c. If a taxpayer provides services, such as
			 operating an advertising agency, or performing equipment service contracts or
			 research and development contracts, sales includes the gross receipts from
			 performing the service, including fees, commissions, and similar items.
			 (4-6-23)
d. If a taxpayer rents
			 real or tangible property, sales includes the gross receipts from the renting,
			 leasing, or licensing the use of the property. (4-6-23)
e. If a taxpayer sells, assigns, or licenses
			 intangible personal property, such as patents and copyrights, sales includes
			 the gross receipts from these transactions. (4-6-23)
f. If a taxpayer derives receipts from
			 selling equipment used in its business, the receipts constitute sales. For
			 example, a trucking company owns a fleet of trucks and sells its trucks
			 according to a regular replacement program. The gross receipts from the sale of
			 the trucks are included in the sales factor. (4-6-23)
g. If a taxpayer derives receipts from
			 foreign source dividends that are apportionable income, the receipts constitute
			 sales. No other apportionment factor relief is permitted to include this
			 dividend income. Section
			 78, Internal Revenue Code, foreign
			 dividend gross-up is excluded from sales. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.530 - SALES FACTOR: DENOMINATOR

Current through August 31, 2023
Section
				63-3027(10)(a),
				Idaho Code. The denominator of the sales factor includes the total gross
				receipts derived by the taxpayer from transactions and activity in the regular
				course of its trade or business or otherwise required to be included as
				apportionable income, except receipts excluded by Rules
				525 through
				559 and Rule
				570 of these rules. The denominator
				may not exceed the sum of all the numerators. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.535 - SALES FACTOR: NUMERATOR

Current through August 31, 2023
Section
				63-3027(10)(a),
				Idaho Code. The numerator of the sales factor includes gross receipts
				attributable to Idaho and derived by the taxpayer from transactions and
				activity in the regular course of its trade or business or otherwise required
				to be included as apportionable income. All interest income, service charges,
				carrying charges, or time-price differential charges incidental to gross
				receipts are included regardless of where the accounting records are maintained
				or the location of the contract or other evidence of indebtedness.
				(4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.540 - SALES FACTOR: SALES OF TANGIBLE PERSONAL PROPERTY IN IDAHO

Current through August 31, 2023
Section
				63-3027(12),
				Idaho Code
01.
Gross
			 Receipts
. Gross receipts from sales of tangible personal property,
			 except sales to the United States Government as discussed in Rule
			 545 of these rules, are in Idaho
			 if: (4-6-23)
a. The property is delivered or
			 shipped to a purchaser in Idaho regardless of the f.o.b. point or other
			 conditions of sale; or (4-6-23)
b.
			 The property is shipped from an office, store, warehouse, factory, or other
			 place of storage in Idaho and the taxpayer is not taxable in the state of the
			 purchaser. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.545 - SALES FACTOR: SALES OF TANGIBLE PERSONAL PROPERTY TO THE UNITED STATES GOVERNMENT IN IDAHO

Current through August 31, 2023
Section
				63-3027(12),
				Idaho Code
01.
In
			 General
. Gross receipts from sales of tangible personal property to the
			 United States Government are in Idaho if the property is shipped from an
			 office, store, warehouse, factory, or other place of storage in Idaho. For
			 purposes of this rule, only sales for which the United States Government makes
			 direct payment to the seller pursuant to the terms of a contract constitute
			 sales to the United States Government. Generally, sales by a subcontractor to
			 the prime contractor, the party to the contract with the United States
			 Government, are not sales to the United States Government. (4-6-23)
02.
Examples
. (4-6-23)
a. A taxpayer contracts with the General
			 Services Administration to deliver a truck that was paid for by the United
			 States Government. The sale is a sale to the United States Government.
			 (4-6-23)
b. A taxpayer as a
			 subcontractor to a prime contractor with the National Aeronautics and Space
			 Administration contracts to build a rocket component for one million dollars
			 ($1,000,000). The sale by the subcontractor to the prime contractor is not a
			 sale to the United States Government. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.547 - SALES FACTOR: RENTAL, LEASE, OR LICENSE OF TANGIBLE PERSONAL PROPERTY

Current through August 31, 2023
Section
				63-3027(13)(b),
				Idaho Code. In the case of a rental, lease or license of tangible personal
				property, the receipts from the sale are in this state if and to the extent
				that the property is in this state. If property is mobile property that is
				located both within and without this state during the period of the lease or
				other contract, the receipts assigned to this state are the receipts from the
				contract period multiplied by the fraction computed under Rule
				475.03 (as adjusted when
				necessary to reflect differences between usage during the contract period and
				usage during the taxable year). (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.549 - SALES FACTOR: LICENSE OR LEASE OR INTANGIBLE PROPERTY

Current through August 31, 2023
Section
				63-3027(13)(d)(i)
01.
General Rules
. (4-6-23)
a. The receipts from the license of
			 intangible property are in this state if and to the extent the intangible is
			 used in this state. In general, the term "use" is construed to refer to the
			 location of the taxpayer's market for the use of the intangible property that
			 is being licensed and is not to be construed to refer to the location of the
			 property or payroll of the taxpayer. The rules that apply to determine the
			 location of the use of intangible property in the context of several specific
			 types of licensing transactions are set forth at Subsections
			 549.02 through
			 05 of this rule. For purposes of the
			 rules set forth in this Rule
			 549, a lease of intangible property
			 is to be treated the same as a license of intangible property.
			 (4-6-23)
b. In general, a license
			 of intangible property that conveys all substantial rights in that property is
			 treated as a sale of intangible property for purposes of Section
			 63-3027, Idaho Code, and these
			 rules. See Rule 550. Note,
			 however, that for purposes of this Rule
			 549 and Rule
			 550, a sale or exchange of
			 intangible property is treated as a license of that property where the receipts
			 from the sale or exchange derive from payments that are contingent on the
			 productivity, use or disposition of the property. (4-6-23)
c. Intangible property licensed as part of
			 the sale or lease of tangible property is treated under Section
			 63-3027, Idaho Code, and these
			 rules as the sale or lease of tangible property. (4-6-23)
d. Nothing in this Rule
			 548 shall be construed to allow or
			 require inclusion of receipts in the sales factor that are not included in the
			 definition of "receipts" pursuant to Section
			 63-3027(1)(i),
			 Idaho Code, or related rules. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.550 - SALES FACTOR: SALE OF INTANGIBLE PROPERTY

Current through August 31, 2023
Section
				63-3027(13)(d)(ii)
01.
Assignment of Receipts
. The
			 assignment of receipts to a state or states in the instance of a sale or
			 exchange of intangible property depends upon the nature of the intangible
			 property sold. For purposes of this Rule (550), a sale or exchange of
			 intangible property includes a license of that property where the transaction
			 is treated for tax purposes as a sale of all substantial rights in the property
			 and the receipts from transaction are not contingent on the productivity, use
			 or disposition of the property. For the rules that apply where the
			 consideration for the transfer of rights is contingent on the productivity, use
			 or disposition of the property, see Subsection
			 549.01. (4-6-23)
a. Contract Right or Government License that
			 Authorizes Business Activity in Specific Geographic Area. In the case of a sale
			 or exchange of intangible property where the property sold or exchanged is a
			 contract right, government license or similar intangible property that
			 authorizes the holder to conduct a business activity in a specific geographic
			 area, the receipts from the sale are assigned to a state if and to the extent
			 that the intangible property is used or is authorized to be used within the
			 state. If the intangible property is used or may be used only in Idaho the
			 taxpayer shall assign the receipts from the sale to this state. If the
			 intangible property is used or is authorized to be used in this state and one
			 or more other states, the taxpayer shall assign the receipts from the sale to
			 this state to the extent that the intangible property is used in or authorized
			 for use in this state, through the means of a reasonable approximation.
			 (4-6-23)
b. Sale that Resembles a
			 License (Receipts are Contingent on Productivity, Use or Disposition of the
			 Intangible Property). In the case of a sale or exchange of intangible property
			 where the receipts from the sale or exchange are contingent on the
			 productivity, use or disposition of the property, the receipts from the sale
			 are assigned by applying the rules set forth in Rule
			 549 (pertaining to the license or
			 lease of intangible property). (4-6-23)
c. Sale that Resembles a Sale of Goods and
			 Services. In the case of a sale or exchange of intangible property where the
			 substance of the transaction resembles a sale of goods or services and where
			 the receipts from the sale or exchange do not derive from payments contingent
			 on the productivity, use or disposition of the property, the receipts from the
			 sale are assigned by applying the rules set forth in Subsection
			 549.05 (relating to licenses of
			 intangible property that resemble sales of goods and services). Examples of
			 these transactions include those that are analogous to the license transactions
			 cited as examples in Subsection
			 549.05.
			 (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.551 - SALES FACTOR: SPECIAL RULES

Current through August 31, 2023
Section
				63-3027(13),
				Idaho Code
01.
Software
			 Transactions
. (4-6-23)
a. A license or
			 sale of pre-written software for purposes other than commercial reproduction
			 (or other exploitation of the intellectual property rights) transferred on a
			 tangible medium is treated as the sale of tangible personal property, rather
			 than as either the license or sale of intangible property or the performance of
			 a service. In these cases, the receipts are in this state as determined under
			 the rules for the sale of tangible personal property set forth under Section
			 63-3027(12),
			 Idaho Code, and related rules. In all other cases, the receipts from a license
			 or sale of software are to be assigned to this state as determined otherwise
			 under Rules 546 through
			 551 (e.g., depending on the facts,
			 as the development and sale of custom software, see Rule
			 548.03, as a license of a
			 marketing intangible, see Rule
			 549.02, as a license of a
			 production intangible, see Rule
			 549.03, as a license of
			 intangible property where the substance of the transaction resembles a sale of
			 goods or services, see Rule
			 549.05, or as a sale of
			 intangible property, see Rule
			 550. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.558 - SALES FACTOR: COSTS OF PERFORMANCE ELECTION FOR COMMUNICATIONS COMPANIES

Current through August 31, 2023
Section
				63-3027(15),
				Idaho Code
01.
Election
.
			 A communications company as defined in Section
			 63-3027(1)(e),
			 Idaho Code, shall source gross receipts from transactions other than sales of
			 tangible personal property pursuant to Section
			 63-3027(13),
			 Idaho Code, and Rules
			 546,
			 548,
			 549, as applicable, unless it
			 elects to source such gross receipts pursuant to Section
			 63-3027(15),
			 Idaho Code, and Rule 559. The
			 election is made by attaching a written statement of the election to the
			 return. The statement must affirmatively state whether (1) all the
			 income-producing activity is performed in this state, or (2) the
			 income-producing activity is performed both in and outside this state and a
			 greater proportion of the income producing activity is performed in this state
			 than in any other state, based on costs of performance. This election may not
			 be changed for a taxable year after the return for that year has been filed. An
			 election under Section
			 63-3027(15),
			 Idaho Code, and Rule 559 is
			 independent from any election made pursuant to Section
			 63-3027(10)(b),
			 Idaho Code, and Subsection
			 310.03. (4-6-23)
02.
Election Binding for Future
			 Years
. The election is binding for all years thereafter; a change off
			 election in future years may only occur with the written permission of the tax
			 commission. A petition to change the election must include an explanation of
			 the legal or factual basis for requesting the change and a computation of the
			 taxpayer's Idaho taxable income and tax liability computed using both the prior
			 reporting method and the method the taxpayer is petitioning to use for the year
			 of change. The written petition requesting the change of reporting method must
			 be filed with the Tax Commission at least thirty (30) days prior to the due
			 date for filing the tax return. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.559 - SALES FACTOR: SALES OTHER THAN SALES OF TANGIBLE PERSONAL PROPERTY IN IDAHO FOR COMMUNICATIONS COMPANIES ELECTING TO USE COSTS OF PERFORMANCE

Current through August 31, 2023
Section
				63-3027(15),
				Idaho Code
01.
In
			 General
. Communications companies as defined in Section
			 63-3027(1)(e),
			 Idaho Code, may elect to source gross receipts from transactions other than
			 sales of tangible personal property, including transactions with the United
			 States Government, under the provisions of Section
			 63-3027(15),
			 Idaho Code, and this Rule
			 559. Gross receipts are attributed
			 to Idaho if the income producing activity that generates the receipts is
			 performed wholly within Idaho. Also, gross receipts are attributed to Idaho if,
			 with respect to a particular item of income, the income producing activity is
			 performed within and without Idaho but the greater part of the income producing
			 activity is performed in Idaho, based on costs of performance.
			 (4-6-23)
02.
Income Producing
			 Activity
. The term income producing activity applies to each separate
			 item of income and means the transactions and activity engaged in by the
			 taxpayer in the regular course of its trade or business for the ultimate
			 purpose of producing that item of income. The activity includes transactions
			 and activities performed on behalf of a taxpayer, such as those conducted on
			 its behalf by an independent contractor. (4-6-23)
a. Income producing activity includes the
			 following: (4-6-23)
i. The rendering of
			 personal services by employees or by an agent or independent contractor acting
			 on behalf of the taxpayer or the use of tangible and intangible property by the
			 taxpayer or by an agent or independent contractor acting on behalf of the
			 taxpayer in performing a service; (4-6-23)
ii. The sale, rental, leasing, licensing or
			 other use of real property; (4-6-23)
iii. The rental, leasing, licensing or other
			 use of tangible personal property; and (4-6-23)
iv. The sale, licensing or other use of
			 intangible personal property. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.560 - SPECIAL RULES

Current through August 31, 2023
Section
				63-3027(17),
				Idaho Code
01.
In
			 General
. A departure from the allocation and apportionment provisions of
			 Section 63-3027, Idaho Code, is permitted
			 only in limited and specific cases where the apportionment and allocation
			 provisions contained in Section
			 63-3027, Idaho Code, produce
			 incongruous results. (4-6-23)
02.
Alternate Methods
. If the allocation and apportionment provisions
			 of Section
			 63-3027, Idaho Code, do not fairly
			 represent the extent of all or any part of a taxpayer's business activity in
			 Idaho, the taxpayer may petition for or the Tax Commission may require:
			 (4-6-23)
a. Separate accounting;
			 (4-6-23)
b. The exclusion of one
			 (1) or more of the factors; (4-6-23)
c. The inclusion of one (1) or more
			 additional factors that fairly represent the taxpayer's business activity in
			 Idaho; or (4-6-23)
d. The use of
			 any other method to achieve an equitable allocation and apportionment of the
			 taxpayer's income. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.565 - SPECIAL RULES: PROPERTY FACTOR

Current through August 31, 2023
Section
				63-3027(18),
				Idaho Code
01.
Subrents
.
			 (4-6-23)
a. In General. If the subrents taken
			 into account in determining the net annual rental rate pursuant to Rule
			 485 of these rules produce a
			 negative or clearly inaccurate value for any item of property, another method
			 that properly reflects the value of rented property may be required by the Tax
			 Commission or requested by the taxpayer. The value may not be less than an
			 amount that bears the same ratio to the annual rental rate paid by the taxpayer
			 for the property as the fair market value of that portion of the property used
			 by the taxpayer bears to the total fair market value of the rented property.
			 (4-6-23)
b. Example. A taxpayer
			 rents a ten (10) story building at an annual rental rate of one million dollars
			 ($1,000,000). The taxpayer occupies two (2) stories and sublets eight (8)
			 stories for one million dollars ($1,000,000) a year. The taxpayer's net annual
			 rental rate may not be less than two-tenths (0.2) of the taxpayer's annual
			 rental rate for the entire year, or two hundred thousand dollars ($200,000).
			 (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.580 - SPECIAL RULES: SPECIAL INDUSTRIES

Current through August 31, 2023
Section
				63-3027(18),
				Idaho Code
01.
Adoption of MTC
			 Special Industry Regulations
. This rule incorporates by reference the
			 MTC special industry regulations as adopted in Subsection
			 003.01 of these rules. Copies of
			 the MTC special industry regulations may also be obtained from the main office
			 of the Idaho State Tax Commission. The following special industries are to
			 apportion income in accordance with the applicable MTC regulation: (4-6-23)
a. Construction Contractors. The
			 apportionment of income derived by a long-term construction contractor is to be
			 computed in accordance with MTC Regulation IV.18.(d). as adopted July 10, 1980;
			 (4-6-23)
b. Airlines. The
			 apportionment of income derived by an airline is to be computed in accordance
			 with MTC Regulation IV.18.(e). as adopted July 14, 1983; (4-6-23)
c. Railroads. The apportionment of income
			 derived by a railroad is to be computed in accordance with MTC Regulation
			 IV.18.(f). as adopted July 16, 1981; (4-6-23)
d. Trucking Companies. The apportionment of
			 income derived by motor common carriers, motor contract carriers, or express
			 carriers that primarily transport tangible personal property of others is to be
			 computed in accordance with MTC Regulation IV.18.(g). as amended July 27, 1989,
			 for taxable years beginning on or after January 1, 1997. (4-6-23)
e. Television and Radio Broadcasting. The
			 apportionment of income derived from television and radio broadcasting is to be
			 computed in accordance with MTC Regulation IV.18.(h). as amended April 25,
			 1996, for taxable years beginning on or after January 1, 1995.
			 (4-6-23)
f. Publishing. The
			 apportionment of income derived from the publishing, sale, licensing or other
			 distribution of books, newspapers, magazines, periodicals, trade journals or
			 other printed material is to be computed in accordance with MTC Regulation
			 IV.18.(j). as adopted July 30, 1993, for taxable years beginning on or after
			 January 1, 1995. (4-6-23)
g.
			 Financial Institutions. See Rule
			 582 of these rules for the
			 apportionment of income by a financial institution for taxable years beginning
			 on or after January 1, 1998. (4-6-23)