reglab/statecodes huggingface dataset:
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.265 - SOLE PROPRIETORSHIPS OPERATING WITHIN AND WITHOUT IDAHO

Current through August 31, 2023
Section
				63-3026A(3),
				Idaho Code
01.
In
			 General
. A sole proprietorship that operates within and without Idaho
			 will apply the principles of allocation and apportionment of income set forth
			 in Section
			 63-3027, Idaho Code, and related
			 rules to determine the extent of proprietorship income that is derived from or
			 related to Idaho sources. The use of a combined report, however, is available
			 only to C corporations. (4-6-23)
02.
Application of Rule
. This
			 rule also applies to farming activities operated as a sole proprietorship.
			 (4-6-23)
03.
Alternative
			 Method
. If the method described in Subsection
			 265.01 does not fairly represent
			 the extent of the business activity in Idaho, the taxpayer may propose or the
			 Tax Commission may require an alternative method. (4-6-23)
a. The taxpayer will fully explain the
			 alternative method in a statement attached to his Idaho individual income tax
			 return. (4-6-23)
b. The method
			 proposed by the taxpayer may be used in lieu of the method in Subsection
			 265.01 unless the Tax Commission
			 expressly denies its use. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.266 - IDAHO SOURCE INCOME OF NONRESIDENT AND PART-YEAR RESIDENT INDIVIDUALS -INCOME FROM INTANGIBLE PROPERTY

Current through August 31, 2023
Section
				63-3026A(3),
				Idaho Code
01.
In
			 General
. Gross income from intangible property generally is sourced to
			 the state of the owner's domicile. The following are exceptions to this rule.
			 (4-6-23)
a. If the intangible property is
			 employed in the owner's trade, business or profession carried on within Idaho,
			 any income derived from or related to the property, including gains from the
			 sale thereof, constitutes income from Idaho sources. For example, if a
			 nonresident pledges stocks, bonds or other intangible personal property as
			 security for the payment of indebtedness incurred in connection with the
			 nonresident's Idaho business operations, the intangible property has an Idaho
			 situs and the income derived therefrom constitutes Idaho source income.
			 (4-6-23)
b. Interest income from
			 the sale of real or tangible personal property on the installment method is
			 treated as income from the sale of the underlying property and is therefore
			 sourced to Idaho if the underlying property was located in Idaho when sold.
			 (4-6-23)
c. Interest income paid by
			 an S corporation to a shareholder or by a partnership to a partner is sourced
			 to Idaho in proportion to the Idaho apportionment factor of the partnership or
			 S corporation. (4-6-23)
d. Gains or
			 losses from the sale or other disposition of a partnership interest or stock in
			 an S corporation are sourced to Idaho by using the Idaho apportionment factor
			 for the entity for the taxable year immediately preceding the year of the sale
			 of the interest or stock. However, a gain or loss from the sale of an interest
			 in a publicly traded partnership transacting business in Idaho is Idaho source
			 income to the extent of the gain or loss determined under Section
			 751, Internal Revenue Code,
			 multiplied by the Idaho apportionment factor of the partnership for the year in
			 which the sale occurred. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.267 - IDAHO SOURCE INCOME OF NONRESIDENT AND PART-YEAR RESIDENT INDIVIDUALS -PASSIVE ACTIVITY LOSSES

Current through August 31, 2023
Section
				63-3026A(6),
				Idaho Code
01.
In
			 General
. Losses from a passive activity incurred while an individual is
			 a nonresident are included in Idaho taxable income only to the extent the
			 losses were from Idaho activity. (4-6-23)
02.
Idaho Activity
. An activity
			 is an Idaho activity only to the extent the income from that activity would be
			 included in the Idaho taxable income of a nonresident pursuant to Section
			 63-3026A, Idaho Code. If a passive
			 activity is engaged in both within and without Idaho, the principles of
			 allocation and apportionment of income set forth in Section
			 63-3027, Idaho Code, and related
			 rules must be applied to determine the extent of Idaho activity.
			 (4-6-23)
03.
Prior Year
			 Losses
. Suspended passive activity losses from prior years included in
			 federal taxable income for the current year are included in Idaho taxable
			 income only to the extent the losses were from Idaho activity.
			 (4-6-23)
04.
Current Year
			 Losses
. Non-Idaho passive activity losses incurred in the current
			 taxable year are included in Idaho taxable income only to the extent the losses
			 were incurred while the individual was an Idaho resident. The portion of the
			 losses incurred while an Idaho resident is determined by prorating the losses
			 based on the proportion of the year the individual resided in Idaho.
			 (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.268 - IDAHO SOURCE INCOME OF NONRESIDENT AND PART-YEAR RESIDENT INDIVIDUALS -SUSPENDED LOSSES FROM PASS-THROUGH ENTITIES

Current through August 31, 2023
Section
				63-3026A, Idaho Code
01.
In General
. A nonresident
			 individual's suspended losses from a pass-through entity are included in Idaho
			 taxable income in the year included in federal taxable income only to the
			 extent the losses were from an Idaho source in the year incurred. (4-6-23)
a. Suspended Loss. For purposes of this rule,
			 a suspended loss is a loss required to be carried over to a succeeding taxable
			 year due to Section 465(a), Section
			 704(d), or Section
			 1366(d)  of the
			 Internal Revenue Code. (4-6-23)
b.
			 Idaho Source. A suspended loss is from an Idaho source in the year incurred to
			 the extent provided by Section
			 63-3026A, Idaho Code, and related
			 rules. For purposes of this rule, the Idaho source portion of a suspended
			 business loss subject to apportionment is determined by multiplying the loss by
			 the Idaho apportionment factor of the pass-through entity in the year the loss
			 was incurred. The Idaho apportionment factor is determined pursuant to Section
			 63-3027, Idaho Code, and related
			 rules. (4-6-23)
c. Nonbusiness
			 Losses. A suspended nonbusiness loss is from an Idaho source in the year
			 incurred to the extent the loss is allocable to Idaho pursuant to Section
			 63-3027, Idaho Code and Rule
			 263.02 of these rules.
			 (4-6-23)
d. Year Loss Incurred. For
			 purposes of this rule, "year incurred" means the tax year the loss was first
			 suspended. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.270 - IDAHO SOURCE INCOME OF NONRESIDENT AND PART-YEAR RESIDENT INDIVIDUALS -IDAHO COMPENSATION - IN GENERAL

Current through August 31, 2023
Section
				63-3026A(3),
				Idaho Code
01.
In
			 General
. If a nonresident individual performs personal services, either
			 as an employee, agent, independent contractor, partner, or otherwise, both
			 within and without Idaho, the portion of his total compensation that
			 constitutes Idaho source income is determined by multiplying that total
			 compensation by the Idaho compensation percentage. (4-6-23)
02.
Definitions
. (4-6-23)
a. The Idaho compensation percentage is the
			 percentage computed by dividing Idaho workdays by total workdays.
			 (4-6-23)
b. The term Idaho workdays
			 means the total number of days the taxpayer provided personal services in Idaho
			 for a particular employer or principal during the calendar year. If personal
			 services were provided both within and without Idaho on the same day, that day
			 is an Idaho workday unless the taxpayer establishes that less than fifty
			 percent (50%) of the services were performed within Idaho that day. If an
			 employee works in Idaho part of the day on a regular full-time basis, working
			 hours must be used to determine the amount of Idaho compensation.
			 (4-6-23)
c. Total workdays means
			 the total number of days the taxpayer provided personal services for that
			 employer or principal both within and without Idaho during the calendar year.
			 For example, a taxpayer working a five (5) day work week may assume total
			 workdays of two hundred sixty (260) less any vacation, holidays, sick leave
			 days and other days off. (4-6-23)
d. Total compensation means all salary,
			 wages, commissions, contract payments, and other compensation for services,
			 including sick leave pay, holiday pay and vacation pay, that is taxable
			 pursuant to the Internal Revenue Code. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.271 - IDAHO COMPENSATION: STOCK OPTIONS

Current through August 31, 2023
Section
				63-3026A(3),
				Idaho Code
01.
In
			 General
. The granting of stock options is considered to be compensation
			 for services. Although considered as compensation, in some circumstances the
			 taxpayer may report the compensation on his federal income tax return as
			 capital gain income. The character of the income from the granting of stock
			 options and the timing of reporting it for federal income tax purposes apply in
			 computing Idaho taxable income. (4-6-23)
02.
Definitions
. For purposes of
			 this rule: (4-6-23)
a. Workdays, Idaho
			 workdays, and total workdays are defined in Rule
			 270 of these rules.
			 (4-6-23)
b. Compensable period
			 means the period that begins at the date the stock option is granted and ends
			 at the earlier of the date the stock option becomes vested or the date the
			 employee's services terminate. (4-6-23)
c. Statutory stock options are options
			 governed by specific Internal Revenue Code sections that impose restrictions on
			 both the employer and the employee. Statutory stock options include incentive
			 stock options as provided in Section
			 422, Internal Revenue Code, and
			 options issued pursuant to employee stock purchase plans as provided in Section
			 423, Internal Revenue Code.
			 (4-6-23)
d. Nonstatutory stock
			 options are options that do not meet the Internal Revenue Code requirements to
			 qualify as statutory stock options or are granted pursuant to a plan or
			 offering that does not qualify. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.272 - IDAHO COMPENSATION: SEVERANCE PAY

Current through August 31, 2023
Section
				63-3026A(3),
				Idaho Code
01.
In
			 General
. In accordance with federal Treasury Regulation Section
			 1.61 -2, termination or severance
			 pay is treated as compensation for services. The amount of termination or
			 severance pay received by a nonresident that is subject to Idaho income tax is
			 determined pursuant to this rule. (4-6-23)
02.
Definitions
. For purposes of
			 this rule workdays, Idaho workdays and total workdays are defined in Rule
			 270 of these rules.
			 (4-6-23)
03.
Calculation of
			 Idaho Source Severance Pay
. The amount of severance pay that is Idaho
			 source income is to be equal to the severance pay received during the taxable
			 year multiplied by the ratio of Idaho workdays to total workdays during either
			 of the following: (4-6-23)
a. The employee's
			 entire period of employment with such employer; or (4-6-23)
b. The employee's last twelve (12) months of
			 employment with such employer. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.273 - IDAHO COMPENSATION: UNEMPLOYMENT COMPENSATION

Current through August 31, 2023
Section
				63-3026A(3),
				Idaho Code. Unemployment compensation benefits are Idaho source income if the
				benefits are received by the taxpayer from the state of Idaho, even though the
				benefits may relate to wages earned in Idaho and another state. Unemployment
				compensation benefits received from another state does not constitute Idaho
				source income even though the calculation of the benefits may be based in part
				on wages earned in Idaho. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.275 - IDAHO SOURCE INCOME OF NONRESIDENT AND PART-YEAR RESIDENT INDIVIDUALS -INVESTMENT INCOME FROM QUALIFIED INVESTMENT PARTNERSHIPS

Current through August 31, 2023
Section
				63-3026A(3)(c),
				Idaho Code
01.
In
			 General
. (4-6-23)
a. For taxable years
			 beginning on or after January 1, 2007, the Idaho taxable income of a
			 nonresident individual does not include the distributive share of investment
			 income of a qualified investment partnership. The distributive share of
			 noninvestment income of a qualified investment partnership derived from or
			 related to sources within Idaho is included in Idaho taxable income. See Rule
			 250 of these rules for information
			 on when pass-through income from a partnership is deemed to have been received.
			 (4-6-23)
b. The exemption from tax
			 on investment income from a qualified investment partnership does not apply to
			 gains or losses derived from the sale of a nonresident individual's interest in
			 a qualified investment partnership. The source of these gains and losses is
			 governed by Section
			 63-3026A(3)(a)(vii),
			 Idaho Code, and Rule 266 of these
			 rules. The source of investment income that is not from a qualified investment
			 partnership is determined as provided in Rule
			 263 of these rules.
			 (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.280 - PARTNERSHIPS OPERATING WITHIN AND WITHOUT IDAHO

Current through August 31, 2023
Sections
				63-3026A(3),
				63-3027 and
				63-3030(a)(9),
				Idaho Code
01.
In
			 General
. A partnership that operates within and without Idaho must apply
			 the principles of allocation and apportionment of income set forth in Section
			 63-3027, Idaho Code, and related
			 rules to determine the extent of partnership income that is derived from or
			 related to Idaho sources. The use of a combined report, however, is available
			 only to C corporations. (4-6-23)
02.
Exceptions to Apportionment
			 Formula
. If the method described in Subsection
			 280.01 does not fairly represent
			 the extent of the business activity in Idaho, the partnership may file a
			 request to use, or the Tax Commission may require, an alternative method,
			 including the following: (4-6-23)
a. Separate
			 accounting as provided in Rule
			 585 of these rules;
			 (4-6-23)
b. The exclusion of a
			 factor pursuant to Rule
			 590 of these rules;
			 (4-6-23)
c. An additional factor or
			 substitute factor pursuant to Rule
			 595 of these rules; or
			 (4-6-23)
d. The employment of any
			 other method that would fairly represent the extent of business activity in
			 Idaho. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.285 - S CORPORATIONS

Current through August 31, 2023
Sections
				63-3025 and
				63-3025A, Idaho Code
01.
Minimum Tax
. The minimum tax
			 is required of every S corporation that is required to file a return. A
			 name-holder or inactive S corporation that is authorized to do business in
			 Idaho pays the minimum tax of twenty dollars ($20) even though the S
			 corporation did not conduct Idaho business activity during the taxable year.
			 (4-6-23)
02.
Nonproductive
			 Mining Corporations
. A nonproductive mining corporation is a corporation
			 that does not own any producing mines and does not engage in any business other
			 than mining. An S corporation that qualifies as a nonproductive mining
			 corporation is required to file and pay tax if it receives any other income.
			 (4-6-23)
03.
Application of
			 Credits
. If an S corporation was previously a C corporation with an
			 Idaho income tax credit carryover at the time of the S corporation election,
			 the S corporation may use any available credit carryover against the tax on the
			 excess net passive income or net recognized built-in gains if the carryover
			 period related to the Idaho income tax credit has not expired before the
			 taxable year in which the tax must be reported. (4-6-23)
04.
Tax Resulting From the Requirements
			 of Section
			 63-3022L, Idaho Code
. An S
			 corporation is subject to tax at the corporate rate on the income required to
			 be reported for qualifying shareholders under Section
			 63-3022L, Idaho Code. This tax is
			 in addition to any tax the S corporation owes under Section
			 63-3025 or
			 63-3025A, Idaho Code.
			 (4-6-23)
05.
Qualified
			 Subchapter S Subsidiary
. A corporation that is a qualified subchapter S
			 subsidiary (QSSS) will be treated for Idaho income tax purposes the same as
			 treated for federal income tax purposes. The QSSS will not be treated as a
			 separate corporation, but all the assets, liabilities, and items of income,
			 deduction, and credit of a QSSS will be treated as assets, liabilities and such
			 items of the S corporation. Since the QSSS is not treated as a separate
			 taxpayer, it is not subject to the minimum tax. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.286 - S CORPORATIONS OPERATING WITHIN AND WITHOUT IDAHO

Current through August 31, 2023
Sections
				63-3027 and
				63-3030(a)(4),
				Idaho Code
01.
In
			 General
. An S corporation that operates within and without Idaho must
			 apply the principles of allocation and apportionment of income set forth in
			 Section 63-3027, Idaho Code, and related
			 rules to determine the extent of S corporation income that is derived from or
			 related to Idaho sources. The use of a combined report, however, is available
			 only to C corporations. (4-6-23)
02.
Information Provided to
			 Shareholders
. An S corporation must provide to each shareholder
			 information necessary for the shareholder to compute his Idaho income tax. Such
			 information must include: (4-6-23)
a. The
			 shareholder's share of each pass-through item of income and deduction;
			 (4-6-23)
b. The shareholder's share
			 of each Idaho addition and subtraction; (4-6-23)
c. The shareholder's share of Idaho
			 qualifying contributions, Idaho tax credits, and tax credit recapture;
			 (4-6-23)
d. The shareholder's share
			 of income allocated to Idaho; (4-6-23)
e. The S corporation's apportionment factor;
			 and (4-6-23)
f. The shareholder's
			 distributive share of S corporation gross income. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.291 - TAX PAID BY PASS-THROUGH ENTITIES FOR OWNERS OR BENEFICIARIES -COMPUTATION OF IDAHO TAXABLE INCOME FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY 1, 2014

Current through August 31, 2023
Sections
				63-3022L and
				63-3026A, Idaho Code
01.
Income Reportable to Idaho
.
			 The following items must be included in the computation of Idaho taxable income
			 for an individual: (4-6-23)
a. Pass-through
			 items that are income from Idaho sources of an owner as determined pursuant to
			 Rule 263 of these rules.
			 (4-6-23)
b. Distributable net
			 income from an estate or trust that is income from Idaho sources.
			 (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.300 - TAX ON CORPORATIONS

Current through August 31, 2023
Sections
				63-3025 and
				63-3025A, Idaho Code
01.
Excise Tax
. A corporation
			 excluded from the tax on corporate income imposed by Section
			 633025, Idaho Code, is subject
			 to the excise tax imposed by Section
			 63-3025A, Idaho Code. If a
			 corporation is subject to the excise tax imposed by Section
			 63-3025A, Idaho Code, it is not
			 subject to the tax on corporate income imposed by Section
			 63-3025, Idaho Code.
			 (4-6-23)
02.
Minimum
			 Tax
. A name-holder or inactive corporation that is authorized to do
			 business in Idaho pays the minimum tax of twenty dollars ($20) even though the
			 corporation did not conduct Idaho business activity during the taxable year. A
			 nonproductive mining corporation generally is not required to pay the minimum
			 tax. (4-6-23)
03.
Nonproductive Mining Corporations
. A nonproductive mining
			 corporation is a corporation that does not own any producing mines and does not
			 engage in any business other than mining. A corporation that qualifies as a
			 nonproductive mining corporation is required to file and pay tax if it receives
			 any other income. (4-6-23)
04.
Protection Under Public Law 86-272
. A
			 corporation whose Idaho business activities fall under the protection of
			 Public Law
			 86-272 is exempt from the taxes imposed by
			 Sections 63-3025 and
			 63-3025A, Idaho Code, including
			 the minimum tax. (4-6-23)
05.
Corporate Income Tax Rates
. Corporate tax rates are listed at
https://tax.idaho.gov/busit
.
			 (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.310 - APPORTIONMENT ELECTIONS FOR MULTISTATE CORPORATIONS

Current through August 31, 2023
Section
				63-3027, Idaho Code
01.
Available Options
. A
			 multistate corporation transacting business in Idaho may elect to be taxed
			 pursuant to the provisions of the Idaho Income Tax Act or pursuant to the
			 Multistate Tax Compact, Section
			 63-3701, Idaho Code. This provides
			 three (3) options: (4-6-23)
a. Apportionment
			 and allocation pursuant to Section
			 63-3027, Idaho Code.
			 (4-6-23)
b. Apportionment and
			 allocation pursuant to Article III, Section
			 1 of the Multistate Tax Compact.
			 However, if this option is elected, in any case in which the provisions of
			 Article III, Section 1 of the
			 Multistate Tax Compact are inconsistent with the provisions of Section
			 63-3027, Idaho Code, the
			 provisions of Section
			 63-3027, Idaho Code, shall
			 control. Because of Subsection
			 63-3027(3), Idaho
			 Code, this option is indistinguishable from the standard apportionment option
			 identified above in Subsection
			 01.a. of this rule.
			 (4-6-23)
c. Tax based on one
			 percent (1%) of sales pursuant to Article III, Section
			 2 of the Multistate Tax Compact and
			 Section 63-3702, Idaho Code. This option
			 is available to corporations whose only activity in Idaho consists of sales
			 that are not in excess of one hundred thousand dollars ($100,000) 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 35.01.01.320 - APPLICATION OF MULTISTATE RULES

Current through August 31, 2023
Section
				63-3027, Idaho Code
01.
Prologue
. Rules
			 320 through
			 699 of these rules are intended to
			 set forth the application of the apportionment and allocation provisions of
			 Section 63-3027, Idaho Code. The only
			 exceptions to these allocation and apportionment rules are those set forth in
			 these rules pursuant to the authority of Sections
			 63-3027(18)  and
			 63-3027(23),
			 Idaho Code. (4-6-23)
02.
Taxpayers Conducting Business Within and Without Idaho
. Section
			 63-3027, Idaho Code, and related
			 rules apply to corporations conducting business within and without Idaho, and
			 to other taxpayers if required by other provisions of the Idaho Code or of
			 these rules. However, only C corporations may use the combined report to
			 determine Idaho taxable income. See Rule
			 360 of these rules.
			 (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.330 - APPORTIONABLE AND NONAPPORTIONABLE INCOME DEFINED: APPORTIONMENT AND ALLOCATION

Current through August 31, 2023
Section
				63-3027(1), Idaho
				Code. Sections
				63-3027(1)(a) 
				and 63-3027(1)(h),
				Idaho Code, require that every item of income be classified either as
				apportionable income or nonapportionable income. Income for purposes of
				classification as apportionable or nonapportionable includes gains and losses.
				Apportionable income is apportioned among jurisdictions by use of a formula.
				Nonapportionable income is specifically assigned or allocated to one (1) or
				more specific jurisdictions pursuant to express rules. An item of income is
				classified as apportionable income if it falls within the definition of
				apportionable income. An item of income is nonapportionable income only if it
				does not meet the definitional requirements for being classified as
				apportionable income. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.331 - APPORTIONABLE AND NONAPPORTIONABLE INCOME DEFINED: APPORTIONABLE INCOME

Current through August 31, 2023
Section
				63-3027(a)(1),
				Idaho Code
01.
In
			 General
. Apportionable income means income of any type or class and from
			 any activity that meets the "transactional test" described in Rule
			 332 of these rules, or the
			 "functional test" described in Rule
			 333 of these rules. The
			 classification of income by the labels occasionally used, such as manufacturing
			 income, compensation for services, sales income, interest, dividends, rents,
			 royalties, gains, operating income, and nonoperating income, is of no aid in
			 determining whether income is apportionable or nonapportionable income.
			 (4-6-23)
02.
Terms Used in
			 Definition of Apportionable Income and in Application of Definition
. As
			 used in the definition of apportionable income and in the application of the
			 definition. (4-6-23)
a. "Trade or business"
			 means the unitary business of the taxpayer, part of which is conducted within
			 Idaho. (4-6-23)
b. "To contribute
			 materially" includes, without limitation, "to be used operationally in the
			 taxpayer's trade or business." Whether property materially contributes is not
			 determined by reference to the property's value or percentage of use. If an
			 item of property materially contributes to the taxpayer's trade or business,
			 the attributes, rights or components of that property are also operationally
			 used in that business. However, property that is held for mere financial
			 betterment is not operationally used in 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 35.01.01.332 - APPORTIONABLE AND NONAPPORTIONABLE INCOME DEFINED: TRANSACTIONAL TEST

Current through August 31, 2023
Section
				63-3027(1)(a),
				Idaho Code
01.
In
			 General
. Apportionable income includes income arising from transactions
			 and activity in the regular course of the taxpayer's trade or business.
			 (4-6-23)
02.
Apportionable
			 Income for Idaho
. If the transaction or activity is in the regular
			 course of the taxpayer's trade or business, part of which trade or business is
			 conducted within Idaho, the resulting income of the transaction or activity is
			 apportionable income for Idaho. Income may be apportionable income even though
			 the actual transaction or activity that gives rise to the income does not occur
			 in Idaho. (4-6-23)
03.
Regular Course of the Taxpayer's Trade or Business
. For a
			 transaction or activity to be in the regular course of the taxpayer's trade or
			 business, the transaction or activity need not be one that frequently occurs in
			 the trade or business. Most, but not all, frequently occurring transactions or
			 activities will be in the regular course of that trade or business and will,
			 therefore, satisfy the transactional test. It is sufficient to classify a
			 transaction or activity as being in the regular course of a trade or business,
			 if it is reasonable to conclude transactions of that type are customary in the
			 kind of trade or business being conducted or are within the scope of what that
			 kind of trade or business does. However, even if a taxpayer frequently or
			 customarily engages in investment activities, if those activities are for the
			 taxpayer's mere financial betterment rather than for the operations of the
			 trade or business, such activities do not satisfy the transactional test. The
			 transactional test includes, but is not limited to, income from sales of
			 inventory, property held for sale to customers, and services that are commonly
			 sold by the trade or business. The transactional test also includes, but is not
			 limited to, income from the sale of property used in the production of
			 apportionable income of a kind that is sold or replaced with some regularity,
			 even if replaced less frequently than once a year. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.333 - APPORTIONABLE AND NONAPPORTIONABLE INCOME DEFINED: FUNCTIONAL TEST

Current through August 31, 2023
Section
				63-3027(1)(a),
				Idaho Code
01.
In
			 General
. Apportionable income also includes income from tangible and
			 intangible property, if the acquisition, management or disposition of the
			 property constitutes an integral or necessary part of the taxpayer's regular
			 trade or business operations. (4-6-23)
02.
Terms
. (4-6-23)
a. "Property" includes any interest in,
			 control over, or use in property (whether the interest is held directly,
			 beneficially, by contract, or otherwise) that materially contributes to the
			 production of apportionable income. (4-6-23)
b. "Acquisition" refers to the act of
			 obtaining an interest in property. (4-6-23)
c. "Management" refers to the oversight,
			 direction, or control (directly or by delegation) of the property for the use
			 or benefit of the trade or business. (4-6-23)
d. "Disposition" refers to the act, or the
			 power, to relinquish or transfer an interest in or control over property to
			 another, in whole or in part. (4-6-23)
e. "Integral part" refers to property that
			 constituted a part of the composite whole of the trade or business, each part
			 of which gave value to every other part, in a manner that materially
			 contributed to the production of apportionable income.
			 (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.334 - APPORTIONABLE AND NONAPPORTIONABLE INCOME DEFINED: RELATIONSHIP OF TRANSACTIONAL AND FUNCTIONAL TESTS TO U.S. CONSTITUTION

Current through August 31, 2023
Section
				63-3027(1)(a),
				Idaho Code
The Due Process Clause and the Commerce Clause of the U.S.
				Constitution restrict states from apportioning income as apportionable income
				that has no rational relationship with the taxing state. The protection against
				extraterritorial state taxation afforded by these Clauses is often described as
				the "unitary business principle." The unitary business principle requires
				apportionable income to be derived from the same unitary business that is being
				conducted at least in part in Idaho. The unitary business that is conducted in
				Idaho includes both a unitary business that the taxpayer alone may be
				conducting and a unitary business the taxpayer may conduct with any other
				person or persons. Satisfaction of either the transactional test or the
				functional test complies with the unitary business principle, because each test
				requires that the transaction or activity (in the case of the transactional
				test) or the property (in the case of the functional test) to be tied to the
				same trade or business that is being conducted within Idaho. Determination of
				the scope of the unitary business being conducted in Idaho is without regard to
				the extent to which Idaho requires or permits combined reporting.
				(4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.335 - NONAPPORTIONABLE INCOME

Current through August 31, 2023
Section
				63-3027(1)(h),
				Idaho Code
01.
Nonapportionable
			 Income
. Nonapportionable income is all income other than apportionable
			 income. All deductions relating to the production of nonapportionable income is
			 to be allocated with the income produced. Any allowable deduction that applies
			 to both apportionable and nonapportionable income of the taxpayer is to be
			 prorated to those classes of income to determine income subject to tax. When
			 used in these rules, the term nonapportionable income includes nonapportionable
			 losses unless the context clearly indicates otherwise. (4-6-23)
02.
Offset of Interest Expense Against
			 Nonapportionable Income
. Interest on indebtedness incurred or continued
			 to purchase or to carry investment that generates nonapportionable income is
			 offset against the income produced. If the facts do not support such a matching
			 of the interest expense to the nonapportionable income, the portion of the
			 taxpayer's interest expense that is offset against income from nonapportionable
			 investments is to be an amount that bears the same ratio to the aggregate
			 amount allowable to the taxpayer as a deduction for interest for the taxable
			 year as the taxpayer's nonapportionable income mentioned in the preceding
			 sentence bears to the taxpayer's total income for the taxable year. Aggregate
			 amount allowable means the taxpayer's total interest expense deducted in
			 determining taxable income as defined in Section
			 63-3011B, Idaho Code, plus
			 interest expense disallowed under Sections
			 265 and
			 291 of the Internal Revenue Code,
			 plus interest expense from a pass-through entity, plus the interest expense of
			 a corporation that, pursuant to Sections
			 63-3027 and
			 63-3027B through
			 63-3027E, Idaho Code, is included
			 in a combined report with the taxpayer for the taxable year. See Rule
			 115 of these rules for the
			 calculation of total income. (4-6-23)
03.
Allocated to Idaho
.
			 Nonapportionable income, net of interest and other related expense offsets,
			 that is attributable to Idaho is allocated to Idaho. (4-6-23)
04.
Allocated to Other States
.
			 Nonapportionable income, together with interest and other related expense
			 offsets, is allocated to other states if it is not attributable to Idaho.
			 (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.336 - APPORTIONABLE AND NONAPPORTIONABLE INCOME: APPLICATION OF DEFINITIONS

Current through August 31, 2023
Section
				63-3027(1)(a),
				63-3027(1)(h),
				Idaho Code
01.
In
			 General
. The following applies the foregoing principles for purposes of
			 determining whether particular income is apportionable or nonapportionable
			 income. (4-6-23)
02.
Rent
			 From Real and Tangible Personal Property
. Rental income from real and
			 tangible property is apportionable income if the property for which the rental
			 income was received is or was used in the taxpayer's trade or business and,
			 therefore, is includable in the property factor under Rule
			 465 of these rules.
			 (4-6-23)
03.
Gains or Losses
			 from Sales of Assets
. Gain or loss from the sale, exchange or other
			 disposition of real property or of tangible or intangible personal property is
			 apportionable income if the property while owned by the taxpayer was used in,
			 or was otherwise included in the property factor of the taxpayer's trade or
			 business. However, if the property was used to produce nonapportionable income,
			 the gain or loss is nonapportionable income. (4-6-23)
04.
Interest Income
. Interest
			 income from an intangible is apportionable income if the intangible arises out
			 of or was created in the regular course of the taxpayer's trade or business
			 operations or if the purpose for acquiring and holding the intangible is an
			 integral, functional, or operative component of the taxpayer's trade or
			 business operations, or otherwise materially contributes to the production of
			 apportionable income of the trade or business operations. (4-6-23)
05.
Dividends
. Dividends from
			 stock are apportionable income if the stock arises out of or was acquired in
			 the regular course of the taxpayer's trade or business operations or where the
			 purpose of acquiring and holding the stock is an integral, functional, or
			 operative component of the taxpayer's trade or business operations, or
			 otherwise materially contributes to the production of apportionable income of
			 the trade or business operations. (4-6-23)
06.
Patent and Copyright
			 Royalties
. Royalties from patents and copyrights are apportionable
			 income if the patent or copyright arises out of or was created in the regular
			 course of the taxpayer's trade or business operations or if the purpose for
			 acquiring and holding the patent or copyright is an integral, functional,
			 operative component of the taxpayer's trade or business operations, or
			 otherwise materially contributes to the production of apportionable income of
			 the trade or business operations. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.340 - PRINCIPLES FOR DETERMINING THE EXISTENCE OF A UNITARY BUSINESS: UNITARY BUSINESS PRINCIPLE

Current through August 31, 2023
Section
				63-3027, Idaho Code
01.
The Concept of a Unitary
			 Business
. (4-6-23)
a. A unitary
			 business is a single economic enterprise that is made up either of separate
			 parts of a single business entity or of a commonly controlled group of business
			 entities that are sufficiently interdependent, integrated and interrelated
			 through their activities so as to provide a synergy and mutual benefit that
			 produces a sharing or exchange of value among them and a significant flow of
			 value to the separate parts. This flow of value to a business entity located in
			 Idaho that comes from being part of a unitary business conducted both within
			 and without Idaho is what provides the constitutional due process "definite
			 link and minimum connection" necessary for Idaho to apportion apportionable
			 income of the unitary business, even if that income arises in part from
			 activities conducted outside Idaho. The apportionable income of the unitary
			 business is then apportioned to Idaho using an apportionment percentage
			 provided by Section
			 63-3027, Idaho Code.
			 (4-6-23)
b. This sharing or
			 exchange of value may also be described as requiring that the operation of one
			 (1) part of the business be dependent upon, or contribute to, the operation of
			 another part of the business. Phrased in the disjunctive, the foregoing means
			 that if the activities of one (1) business either contribute to the activities
			 of another business or are dependent upon the activities of another business,
			 those businesses are part of a unitary business. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.341 - PRINCIPLES FOR DETERMINING THE EXISTENCE OF A UNITARY BUSINESS: DETERMINATION OF A UNITARY BUSINESS

Current through August 31, 2023
Section
				63-3027, Idaho Code
01.
In General
. Unity can be
			 established under any one (1) of the judicially acceptable tests (Butler
			 Brothers, Edison California Stores, Container, etc.), and cannot be denied
			 merely because another of those tests does not simultaneously apply.
			 (4-6-23)
02.
Significant
			 Flows of Value
. A unitary business is characterized by significant flows
			 of value evidenced by factors such as those described in Mobil Oil Corp. v.
			 Vermont, 445 U.S.
			 425 (1980): functional integration,
			 centralization of management, and economies of scale. These factors provide
			 evidence of whether the business activities operate as an integrated whole or
			 exhibit substantial mutual interdependence. Facts suggesting the presence of
			 the factors mentioned above should be analyzed in combination for their
			 cumulative effect and not in isolation. A particular business operation may be
			 suggestive of one (1) or more of the factors mentioned above.
			 (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.343 - PRINCIPLES FOR DETERMINING THE EXISTENCE OF A UNITARY BUSINESS: INDICATORS OF A UNITARY BUSINESS

Current through August 31, 2023
Section
				63-3027, Idaho Code
01.
Same Type of Business
.
			 Business activities that are in the same general line of business generally
			 constitute a single unitary business, for example, a multistate grocery chain.
			 (4-6-23)
02.
Steps in a
			 Vertical Process
. Business activities that are part of different steps
			 in a vertically structured business almost always constitute a single unitary
			 business. For example, a business engaged in the exploration, development,
			 extraction, and processing of a natural resource and the subsequent sale of a
			 product based upon the extracted natural resource, is engaged in a single
			 unitary business, regardless of the fact that the various steps in the process
			 are operated substantially independently of each other with only general
			 supervision from the business's executive offices. (4-6-23)
03.
Strong Centralized
			 Management
. Business activities that might otherwise be considered as
			 part of more than one (1) unitary business may constitute one (1) unitary
			 business when there is a strong centralized management, coupled with the
			 existence of centralized departments for such functions as financing,
			 advertising, research, or purchasing. Strong centralized management exists when
			 a central manager or group of managers makes substantially all of the
			 operational decisions of the business. For example, some businesses conducting
			 diverse lines of business may properly be considered as engaged in only one (1)
			 unitary business when the central executive officers are actively involved in
			 the operations of the various business activities and there are centralized
			 offices that perform for the business activities the normal matters that a
			 truly independent business would perform for itself, such as personnel,
			 purchasing, advertising, or financing. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.344 - PRINCIPLES FOR DETERMINING THE EXISTENCE OF A UNITARY BUSINESS: COMMONLY CONTROLLED GROUP OF BUSINESS ENTITIES

Current through August 31, 2023
Section
				63-3027, Idaho Code
01.
In General
. Separate
			 corporations can be a part of a unitary business only if they are members of a
			 commonly controlled group. (4-6-23)
02.
Commonly Controlled Group
. A
			 "commonly controlled group" means any of the following: (4-6-23)
a. A parent corporation and any one (1) or
			 more corporations or chains of corporations, connected through stock ownership
			 (or constructive ownership) with the parent, but only if: (4-6-23)
i. The parent owns stock possessing more than
			 fifty percent (50%) of the voting power of a least one (1) corporation, and, if
			 applicable, (4-6-23)
ii. Stock
			 cumulatively possessing more than fifty percent (50%) of the voting power of
			 each of the corporations, except the parent, is owned by the parent, one (1) or
			 more corporations described in Subparagraph 344.02.a.i., of this rule, or one
			 (1) or more other corporations that satisfy the conditions of this
			 subparagraph. (4-6-23)
Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES › Section 35.01.01.350 - PRORATION OF DEDUCTIONS

Current through August 31, 2023
Section
				63-3027, Idaho Code
01.
In General
. In most cases a
			 taxpayer's allowable deduction applies only to the apportionable income arising
			 from a particular trade or business or to a particular item of nonapportionable
			 income. In some cases an allowable deduction applies to the apportionable
			 income of more than one trade or business, to several items of nonapportionable
			 income, or to both. In these cases the deduction is to be prorated among the
			 trades or businesses and the items of nonapportionable income in a manner that
			 fairly distributes the deduction among the classes of income to which it
			 applies. (4-6-23)
02.
Year to
			 Year Consistency
. If a taxpayer departs from or modifies the method used
			 for prorating any deduction 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)
03.
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 applying or prorating any deduction, 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 35.01.01.355 - APPLICATION OF SECTION 63-3027 - APPORTIONMENT

Current through August 31, 2023
Section
				63-3027, Idaho Code. If a
				corporation has business activity both within and without Idaho, and is taxable
				in another state as a result of this business activity, the portion of the net
				income or net loss derived from sources in Idaho will be determined by
				apportionment 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 35.01.01.360 - APPLICATION OF SECTION 63-3027 - COMBINED REPORT

Current through August 31, 2023
Section
				63-3027, Idaho Code. If a
				particular trade or business is carried on by a corporation and one (1) or more
				affiliates, nothing in these rules is to preclude using a combined report in
				which the entire apportionable income of the trade or business is apportioned
				pursuant to Section
				63-3027, Idaho Code. The use of
				the combined report is restricted to C corporations. (4-6-23)