Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.10 - Publishing Companies - Apportionment › Rule 42.26.1003 - APPORTIONMENT OF APPORTIONABLE INCOME

Current through Register Vol. 13, July 5, 2024
(1) For
				purposes of this sub-chapter, the property factor will be determined as
				outlined in (2) and (3).
(2) All
				real and tangible personal property, including outer-jurisdictional property,
				whether owned or rented, which is used in the business shall be included in the
				denominator of the property factor.
(3) The property factor numerator will be
				established by following the requirements in (4) through (8).
(4) All real and tangible personal property
				owned or rented by the taxpayer and used in Montana during the tax period shall
				be included in the numerator of the property factor.
(5) Outer-jurisdictional property owned or
				rented by the taxpayer and used in Montana during the tax period shall be
				included in the numerator of the property factor in the ratio which the value
				of such property that is attributable to its use by the taxpayer in business
				activities in Montana bears to the total value of such property that is
				attributable to its use in the taxpayer's business activities
				everywhere.
(6) The value of
				outer-jurisdictional property to be attributed to the numerator of the property
				factor of Montana shall be determined by the ratio that the number of uplinks
				and downlinks (sometimes referred to as "half-circuits") that were used during
				the tax period to transmit from Montana and to receive in Montana any data,
				voice, image, or other information bears to the total number of uplinks and
				downlinks or half-circuits that the taxpayer used for transmissions everywhere.
				Should information regarding such uplink and downlink or half-circuit usage not
				be available or should such measurement of activity not be applicable to the
				type of outer-jurisdictional property used by the taxpayer, the value of such
				property to be attributed to the numerator of the property factor of Montana
				shall be determined by the ratio that the amount of time (in terms of hours and
				minutes of use) or such other measurement of use of outer-jurisdictional
				property that was used during the tax period to transmit from Montana and to
				receive in Montana any data, voice, image, or other information bears to the
				total amount of time or other measurement of use that was used for
				transmissions everywhere.
(7)
				Outer-jurisdictional property shall be considered to have been used by the
				taxpayer in its business activities within Montana when such property, wherever
				located, has been employed by the taxpayer in any manner in the publishing,
				selling, licensing, or other distribution of books, newspapers, magazines, or
				other printed material and any data, voice, image, or other information is
				transmitted to or from Montana either through an earth station or terrestrial
				facility located in Montana.
(a) One example
				of the use of outer-jurisdictional property is where the taxpayer either owns
				its own communications satellite or leases the use of uplinks, downlinks, or
				circuits or time on a communications satellite for the purpose of sending
				messages to its newspaper printing facilities or employees in a state. The
				state or states in which any printing facility that receives the satellite
				communications is located and the state from which the communications were sent
				would, under this rule, apportion the cost of the owned or rented satellite to
				their respective property factors based upon the ratio of the in-state use of
				the satellite to its total usage everywhere.
(i) Assume that ABC newspaper co. owns a
				total of $400,000,000 of property everywhere and that, in addition, it owns and
				operates a communication satellite for the purpose of sending news articles to
				its printing plant in Montana, as well as for communicating with its printing
				plants and facilities or news bureaus, employees and agents located in other
				states and throughout the world.
(ii) Assume also that the total value of its
				real and tangible personal property that was permanently located in Montana for
				the entire income year was valued at $3,000,000.
(iii) Assume further that the total original
				cost of the satellite is $100,000,000 for the tax period and that of the 10,000
				uplinks and downlinks of satellite transmissions used by the taxpayer during
				the tax period, 200 or 2% are attributable to its satellite communications
				received in and sent from Montana.
(iv) Assume still further that the company's
				mobile property that was used partially within Montana, consisting of 40
				delivery trucks, were determined to have an original cost of $4,000,000 and
				such mobile property was used in Montana for 95 days. The total value of
				property to be attributed to Montana would be determined as follows:
Value of property permanently in
						  state:
$3,000,000
Value of mobile property:
95/365 or (.260274) x $4,000,000:
$1,041,096
Value of leased satellite property used in-state:
(.02) x $100,000,000:
$2,000,000
Total value of property attributable to
						  state:
$6,041,096
Total property factor %: $6,041,096/($500,000,000)
						  :
1.2082%