Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-27-1 - MULTISTATE TAX COMPACT › Section 810-27-1-.02 - Application Of Apportionment And Allocation

Current through Register Vol. 42, No. 9, June 28, 2024
(1)
Definitions
:
(a)
Taxpayer
. Any
			 corporation, Subchapter K entity, firm, association, governmental unit or
			 agency or other person acting as a business entity in more than one state, but
			 does not include any individual.
(b)
Apportionment
refers to the division of net income between states by the use of a formula
			 containing apportionment factors.
(c)
Allocation
refers to the assignment of nonbusiness income to a particular state.
(d)
Business
			 activity
refers to the transactions or activity occurring in the
			 regular course of a trade or business of a taxpayer or to the acquisition,
			 management, and disposition of property that constitute integral parts of the
			 taxpayer's trade or business operations or to the sale, exchange, or
			 disposition of real property or tangible or intangible personal property or the
			 sale, exchange or disposition of stock of another corporation. Income from
			 business activity includes business and nonbusiness income.
(e)
Employee
means
(A) any officer of a corporation, or
(B) any individual who, under the
			 usual common-law rules applicable in determining the employer-employee
			 relationship, has the status of an employee. Generally, a person will be
			 considered to be an employee if included by an employer as an employee for
			 purposes of the payroll taxes imposed by the Federal Insurance Contributions
			 Act. However, for purposes of determining a taxpayer's payroll factor, a leased
			 employee is an employee of the client (lessee) organization. A leased employee
			 is also treated as an employee of the employee leasing company.
(f)
Gross
			 Receipts
are the gross amounts realized (the sum of money and the
			 fair market value of other property or services received) on the sale or
			 exchange or property, the performance of services, or the use of property or
			 capital (including rents, royalties, interest and dividends) in a transaction
			 which produced business income, in which the income or loss is recognized (or
			 would be recognized if the taxpayer were required to file a separate entity
			 return) under the Internal Revenue Code. Amounts realized on the sale or
			 exchange of property are not reduced for the cost of goods sold or the basis of
			 property sold. Gross Receipts, even if business income, do not include such
			 items as, for example:
1. Repayment,
			 maturity, or redemption of the principal of a loan, bond, or mutual fund or
			 certificate of deposit or similar marketable instrument.
2. The principal amount received under a
			 repurchase agreement or other transaction properly characterized as a
			 loan.
3. Proceeds from issuance of
			 the taxpayer's own stock or from sale of treasury stock.
4. Damages and other amounts received as the
			 result of litigation.
5. Property
			 acquired by an agent on behalf of another.
6. Tax refunds and other tax benefit
			 recoveries.
7. Pension reversions.
8. Contributions to capital (except
			 for sales of securities by securities dealers).
9. Income from forgiveness of
			 indebtedness.
10. Amounts realized
			 from exchanges of inventory that are not recognized by the Internal Revenue
			 Code.