Compilation of Rules and Regulations of the State of Georgia › Department 560 - RULES OF DEPARTMENT OF REVENUE › Chapter 560-7 - INCOME TAX DIVISION › Subject 560-7-7 - TAXES › Rule 560-7-7-.03 - Corporations: Allocation and Apportionment of Income

Current through Rules and Regulations filed through June 27, 2024
(1)
What constitutes doing
				business.
A corporation will be considered to be doing business within
				this state if it performs acts or consummates transactions within this state
				which result in financial profit or gain, or if it engages within this state in
				any activities or transactions for the purpose of financial profit or gain. A
				corporation will be considered to be engaged in an activity in this state whose
				agent, salesman, or other representative in whatever capacity, engages in
				solicitation, demonstration, taking of orders, collection activities, or any
				other activity for the purpose of financial profit or gain. A corporation will
				be considered to be owning property in this state, doing business in this
				state, or deriving income from sources within this state whenever the
				corporation is a partner, whether limited or general, in a partnership which
				owns property in this state, does business in this state, or derives income
				from sources within this state. A corporation will be considered to be owning
				property in this state, doing business in this state, or deriving income from
				sources within this state whenever the corporation is a member of a limited
				liability company or similar nontaxable entity, not treated as a corporation
				for federal income tax purposes, which owns property in this state, does
				business in this state, or derives income from sources within this
				state.
(2)
Allocation and
				apportionment of income.
When a corporation's entire net income is
				derived from owning property within this state, doing business within this
				state, or deriving income from sources within this state, the entire net income
				shall be taxable by this state. When a corporation's business income is derived
				in part from property owned or business done within this state and in part from
				property owned or business done outside this state, the tax shall be imposed
				only on that portion of the business income which is reasonably attributable to
				the property owned and business done within this state. To arrive at net income
				subject to apportionment, there shall be excluded income subject to allocation
				as provided in paragraph (3) of this regulation.
(3)
Allocation of income.
O.C.G.A. §
									48-7-31(c) 
				 applies only to income from property held solely for investment. All expenses
				connected with earning such investment income, including interest on money
				borrowed to pay for such property, ad valorem and other taxes on such property,
				and all other expenses connected with holding and owning such property shall be
				deducted from the gross investment income. The net investment income is not
				subject to apportionment.
(a)
Real
				property investment income.
If the investment property is real estate
				located within the state, the entire net investment income from such real
				property shall be allocated to Georgia. If such real estate is situated outside
				the state, the entire net investment income therefrom shall be allocated
				outside Georgia.
(b)
Intangible property investment income.
If the investment property
				is intangible, and the corporation is a domestic corporation, or a domesticated
				foreign corporation, or an undomesticated foreign corporation having its
				principal office in Georgia, the entire net investment income from such
				intangible property shall be allocated to Georgia; or if such intangible
				property was acquired as a result of business done or property owned in
				Georgia, the entire net investment income therefrom shall be allocated to
				Georgia.
(c)
Allocation of
				gain or loss on sale of investment property.
Net gain or loss from the
				sale or other disposition of investment property which is not held, owned or
				used in connection with the trade or business of the corporation, and not held
				for sale in the regular course of the trade or business of the corporation,
				shall be allocated. Such gain or loss shall be allocated to Georgia if the
				investment property is real estate situated in Georgia, or tangible personal
				property located in Georgia, or intangible property the net investment income
				from which is allocated to Georgia hereunder. Otherwise, such gain or loss
				shall be allocated outside the state.