reglab/statecodes huggingface dataset:
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.260 - APPLICATION OF THE FINNIGAN RULE

Current through Register Vol. 13, July 5, 2024
(1) In
				determining whether the activities of any company have been conducted within
				Montana beyond the protection of P.L. 86-272, the principle established in
				Appeal of Finnigan Corporation, 88-SBE-022 (8/25/1988) and Appeal of Finnigan
				Corporation, 88-SBE-22A, Opinion on Petition of Rehearing (1/24/1990), commonly
				known as the "Finnigan Rule," shall apply. When calculating the Montana
				apportionment numerators provided for in
				15-31-306,
				15-31-309, and
				15-31-311, MCA, a group of
				corporations engaged in a unitary business as defined in
				15-31-301, MCA, shall include
				Montana property, payroll, and receipts from all members of the unitary group
				as long as one or more members has nexus with Montana.
AUTH:
					 15-1-201,
					 15-31-313, MCA; IMP:
					 15-1-601,
					 15-31-301,
					 15-31-302,
					 15-31-303,
					 15-31-304,
					 15-31-305,
					 15-31-306,
					 15-31-307,
					 15-31-308,
					 15-31-309,
					 15-31-310,
					 15-31-311,
					 15-31-312,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.261 - SPECIAL APPORTIONMENT AND ALLOCATION COMPUTATIONS

Current through Register Vol. 13, July 5, 2024
(1) In the case of certain industries such as
				air transportation, rail transportation, ship transportation, trucking,
				television, radio, motion pictures, various types of professional athletics,
				and so forth, as the department deems necessary, the foregoing rules in respect
				to the apportionment formula do not set forth appropriate procedures for
				determining the apportionment factors. Nothing in
				15-31-312, MCA, or in ARM
				42.26.261 through
				42.26.263 shall preclude the
				department from establishing appropriate procedures under
				15-31-306 through
				15-31-311, MCA, for determining
				the apportionment factors for each such industry, but such procedures shall be
				applied uniformly.
15-1-201,
					 15-31-313,
					 15-31-501, MCA; IMP,
					 15-1-601,
					 15-31-305,
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.262 - SPECIAL COMPUTATIONS RELATED TO PROPERTY FACTOR

Current through Register Vol. 13, July 5, 2024
(1) The following special rules are
				established in respect to the property factor of the apportionment formula:
(a) If the sub-rents taken into account in
				determining the net annual rental rate under ARM
				42.26.236 produce a negative or
				clearly inaccurate value for any item of property, another method which will
				properly reflect the value of rented property may be required by the department
				or requested by the taxpayer.
(b)
				In no case, however, shall such value be less than an amount which bears the
				same ratio to the annual rental rate paid by the taxpayer for such 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.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.263 - SPECIAL COMPUTATIONS RELATED TO RECEIPTS FACTOR

Current through Register Vol. 13, July 5, 2024
(1) The following special criteria are
				established in respect to the receipts factor of the apportionment formula:
(a) Insubstantial amounts of gross receipts
				arising from incidental or occasional transactions or activities may be
				excluded from the receipts factor unless such exclusion would materially affect
				the amount of income apportioned to this state.
(b) For tax periods beginning before January
				1, 2018, where the income-producing activity in respect to apportionable income
				from intangible personal property can be readily identified, such income is
				included in the denominator of the receipts factor and, if the income-producing
				activity occurs in this state, in the numerator of the receipts factor as well.
				For example, usually the income-producing activity can be readily identified in
				respect to interest income received on deferred payments on sales of tangible
				property (ARM
				42.26.251 ) and income from sale,
				licensing, or other use of intangible personal property (ARM
				42.26.257 ).
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.264 - SPECIAL COMPUTATIONS RELATED TO FREIGHT AND PASSENGER CARRIERS

Current through Register Vol. 13, July 5, 2024
(1) A portion of the net income of taxpayers
				engaged in the transportation of freight or passengers within and without
				Montana may be attributed to the movement of revenue-producing equipment,
				drivers, train crews, or other operating personnel across the state.
(2) The percentage of miles traveled within
				Montana to total miles traveled everywhere shall be the percentage used in
				determining the amount of income attributable to this state. The apportionment
				formula for such transportation companies shall be computed as follows:
(a) Fixed properties, such as buildings and
				land used in the business, terminal facilities, shop equipment, and cars and
				trucks used in gathering or delivering local freight, shall be assigned to the
				state in which such properties are located. The value of equipment used in
				interstate transportation shall be assigned to this state on the mileage
				basis.
(b) The wages and salaries
				of employees assigned to fixed locations as officers or clerical,
				administrative, pickup and delivery, or terminal personnel within this state
				shall be included in the Montana payroll factor. The wages of personnel
				operating transportation equipment within and without this state shall be
				assigned to this state upon the basis of miles. The wages of such personnel
				shall be assigned to Montana in proportion that miles traveled within this
				state bear to the total miles traveled everywhere.
(c) Revenues will be assigned to this state
				in the proportion that the miles traveled within the state bear to the total
				miles traveled everywhere. All other revenue shall be assigned in accordance
				with the provisions of
				15-31-310 and
				15-31-311, MCA, and ARM
				42.26.251 through
				42.26.259.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.265 - SPECIAL RULES FOR RAILROADS

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.602
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, IMP, Sec.
					 15-1-601 and Title 15, chapter 31,
					 part 3, MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.266 - THE PROPERTY FACTOR

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.603
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601 and Title 15, chapter 31,
					 part 3, MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.267 - THE DENOMINATOR AND NUMERATOR OF THE PROPERTY FACTOR

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.604
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601 and Title 15, chapter 31,
					 part 3, MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.268 - THE PAYROLL FACTOR

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.605
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601,
					 15-31-305,
					 15-31-308,
					 15-31-309, and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.269 - THE SALES (REVENUE) FACTOR

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.606
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601,
					 15-31-305,
					 15-31-310,
					 15-31-311, and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.270 - SPECIAL RULES FOR TRUCKING COMPANIES

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.702
Sec.
					 15-31-313 and
					 15-31-501, MCA; IMP, Sec.
					 15-31-301,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.271 - THE PROPERTY FACTOR

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.703
Sec.
					 15-31-313 and
					 15-31-501, MCA; IMP, Sec.
					 15-31-306 and
					 15-31-307,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.272 - THE PAYROLL FACTOR

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.704
Sec.
					 15-31-313 and
					 15-31-501, MCA; IMP, Sec.
					 15-31-308 and
					 15-31-309,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.273 - THE SALES (REVENUE) FACTOR

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.705
Sec.
					 15-31-313 and
					 15-31-501, MCA; IMP, Sec.
					 15-31-310 and
					 15-31-311,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.274 - DE MINIMUS NEXUS STANDARD

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.706
Sec.
					 15-31-313 and
					 15-31-501, MCA; IMP, Sec.
					 15-31-301,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.275 - SPECIAL RULES RELATED TO INSTALLMENT SALES

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.401
Sec.
					 15-31-313 and
					 15-31-501, MCA; IMP, Sec.
					 15-31-305,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.276 - UNREPORTED INCOME ON INSTALLMENT OBLIGATION IN YEAR OF DISSOLUTION

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.402
Sec.
					 15-31-313 and
					 15-31-501, MCA; IMP, Sec.
					 15-31-305,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.280 - GENERAL STATEMENT

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.802
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601 and
					 15-31-301 through
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.281 - APPORTIONMENT OF BUSINESS INCOME (REPEALED)

Current through Register Vol. 13, July 5, 2024
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601,
					 15-31-302,
					 15-31-305, and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.282 - PROPERTY FACTOR

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.803
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601,
					 15-31-306,
					 15-31-307, and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.283 - THE PAYROLL FACTOR

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.804
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601,
					 15-31-308,
					 15-31-309, and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.284 - SALES (TRANSPORTATION REVENUE) FACTOR

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.805
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601,
					 15-31-310,
					 15-31-311, and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.285 - RECORDS

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.806
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601,
					 15-31-301, and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.286 - AIRLINE REGULATION EXAMPLES

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.807
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601 and
					 15-31-301 through
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.290 - LONG-TERM CONSTRUCTION CONTRACTS

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.902
Sec.
					 15-31-313 and
					 15-31-501, MCA; IMP, Sec.
					 15-31-301 and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.291 - BUSINESS AND NONBUSINESS INCOME (REPEALED)

Current through Register Vol. 13, July 5, 2024
Sec.
					 15-31-313 and
					 15-31-501, MCA; IMP, Sec.
					 15-31-301 and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.292 - APPORTIONMENT OF BUSINESS INCOME

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.903
Sec.
					 15-31-313 and
					 15-31-501, MCA; IMP, Sec.
					 15-31-301 and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.293 - COMPLETED CONTRACT METHOD - SPECIAL COMPUTATION

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.904
Sec.
					 15-31-313 and
					 15-31-501, MCA; IMP, Sec.
					 15-31-301 and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.294 - COMPUTATION FOR YEAR OF WITHDRAWAL, DISSOLUTION OR CESSATION OF BUSINESS - COMPLETED CONTRACT METHOD

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.905
Sec.
					 15-31-313 and
					 15-31-501, MCA; IMP, Sec.
					 15-31-301 and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.3 - Water's-Edge › Rule 42.26.301 - WATER'S-EDGE ELECTION

Current through Register Vol. 13, July 5, 2024
(1) Only
				multinational corporations subject to the Montana corporate income tax may
				apportion income under a water's-edge, unitary combination method as set forth
				in 15-31-322, MCA.
AUTH:
					 15-31-501, MCA;IMP:
					 15-31-322,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.3 - Water's-Edge › Rule 42.26.302 - PROCEDURE

Current through Register Vol. 13, July 5, 2024
(1) To perfect a water's-edge election, a
				taxpayer must complete Form WE - ELECT and file the form with the department
				within the first 90 days of the first tax year of the three-year period for
				which the election is to become effective. If the first tax period for which
				the election is to become effective is less than 90 days, the taxpayer will
				have until the end of the tax period to file the election.
(a) A taxpayer cannot make a water's-edge
				election for prior tax periods.
(b)
				If a taxpayer files a water's-edge election after the 90-day deadline, the
				taxpayer must establish reasonable cause for failing to satisfy the 90-day
				deadline.
(i) Reasonable cause is defined in
				ARM 42.2.304. Examples of what
				ordinarily does or does not constitute reasonable cause are provided in ARM
				42.2.512.
(ii) Failure to timely file a water's-edge
				election on the belief that an election was unnecessary because the taxpayer
				incorrectly asserted a nonunitary relationship with the foreign corporation(s)
				does not constitute reasonable cause.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.3 - Water's-Edge › Rule 42.26.303 - REVOCATION OR NONRENEWAL OF WATER'S-EDGE ELECTIONS

Current through Register Vol. 13, July 5, 2024
(1) If a taxpayer wishes to change its
				election prior to the end of the three-year period, permission must first be
				received from the department. The department shall impose reasonable conditions
				necessary to insure that the requested change will not result in an avoidance
				of tax and that income for the period prior to the change has been properly
				reported. In the year of the change, the department may, for the purposes
				provided for in law, require the inclusion of gross income or the exclusion of
				deductions either of which occurred because of a water's-edge filing for that
				period.
15-31-501, MCA; IMP,
					 15-31-324,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.3 - Water's-Edge › Rule 42.26.304 - DOMESTIC DISCLOSURE SPREADSHEET

Current through Register Vol. 13, July 5, 2024
(1)
				Electing corporations may be required to file the domestic disclosure
				spreadsheet within six months of filing the federal income tax return. The
				disclosure spreadsheet filing must be accomplished on forms prescribed by the
				department.
Sec.
					 15-31-501, MCA; IMP, Sec.
					 15-31-326,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.3 - Water's-Edge › Rule 42.26.305 - TAX RATES (REPEALED)

Current through Register Vol. 13, July 5, 2024
15-31-501, MCA; IMP,
					 15-31-121,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.3 - Water's-Edge › Rule 42.26.306 - APPLICABILITY (REPEALED)

Current through Register Vol. 13, July 5, 2024
AUTH:  15-31-501, MCA; IMP:  15-31-322,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.3 - Water's-Edge › Rule 42.26.307 - APPORTIONMENT AND ALLOCATION GENERALLY

Current through Register Vol. 13, July 5, 2024
(1)
				If the business activity in respect to any trade or business of a taxpayer
				occurs both within and without this state and if by reason of such business
				activity the taxpayer is taxable in another state, the portion of the net
				income (or net loss) arising from such trade or business which is derived from
				sources within this state shall be determined by apportionment in accordance
				with 15-31-305 through
				15-31-311, MCA.
(2) Any taxpayer subject to the taxing
				jurisdiction of this state shall allocate all of its nonapportionable income or
				loss within or without this state in accordance with
				15-31-304, MCA.
AUTH:
					 15-1-201,
					 15-31-313,
					 15-31-501, MCA; IMP:
					 15-1-601,
					 15-31-305,
					 15-31-306,
					 15-31-307,
					 15-31-308,
					 15-31-309,
					 15-31-310,
					 15-31-311,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.3 - Water's-Edge › Rule 42.26.308 - APPORTIONMENT FORMULA

Current through Register Vol. 13, July 5, 2024
(1) All
				apportionable income of each trade or business of the taxpayer shall be
				apportioned to this state by use of the apportionment formula set forth in
				15-31-305, MCA. The elements of
				the apportionment formula are the property factor (see ARM
				42.26.231 ), the payroll factor
				(see ARM 42.26.241 ), and the receipts
				factor (see ARM
				42.26.251 ) of the trade or
				business of the taxpayer.
AUTH:
					 15-1-201,
					 15-31-313,
					 15-31-501, MCA; IMP:
					 15-1-601,
					 15-31-305,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.3 - Water's-Edge › Rule 42.26.309 - APPORTIONMENT FACTORS

Current through Register Vol. 13, July 5, 2024
(1) For purposes of
				15-31-322, MCA, the assignment of
				payroll and property is determined under the individual states' laws and
				regulations that set forth the apportionment formulas used to assign net income
				subject to taxes on or measured by net income. If a state does not impose a tax
				on or measured by net income, assignment is determined under this chapter.
(2) The apportionment provisions
				of Title 15, chapter 31, part 3, MCA, and related regulations regarding the
				inclusion, valuation, and attribution of apportionment factors by location
				shall apply to the computation of Montana tax liability under a water's-edge
				election. Only property, payroll, and receipts of corporations actually
				included in the water's-edge combined group shall be considered.
AUTH:
					 15-31-501, MCA; IMP:
					 15-31-323,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.3 - Water's-Edge › Rule 42.26.310 - DISREGARDING OR MODIFYING A WATER'S-EDGE ELECTION

Current through Register Vol. 13, July 5, 2024
(1) The department shall review for
				completeness the domestic disclosure spreadsheets that are filed as required by
				ARM 42.26.304. Completeness means that
				entries are provided for each item requested. A spreadsheet which is not
				properly completed shall be treated as if not filed, except that the taxpayer
				will be given 60 days to correct any deficiencies which it has been informed of
				in writing by the department. A taxpayer who fails to file a domestic
				disclosure spreadsheet or fails to file a complete spreadsheet after having
				been given an opportunity to correct any deficiencies shall have its
				water's-edge election revoked by the department.
(2) The corporations includable in a
				water's-edge election may be modified by the department for the inclusion of
				additional unitary corporations as described in
				15-31-322, MCA, or the exclusion
				of nonunitary corporations. The modification cannot require the inclusion of
				any corporations not described in
				15-31-322, MCA.
(3) The calculation of water's-edge combined
				income may be modified to reflect adjustments to transfer prices, royalty
				rates, allocation of common expenses, and similar adjustments necessary to
				reflect a proper apportionment of income.
(4) In calculating water's-edge combined
				apportionable income, transactions between or among any member of the
				water's-edge combined group and any other nonincluded affiliated corporation,
				whether domestic or foreign, must be restored if eliminated in the computation
				of federal net income of the water's-edge combined group.
(5) Limitations of net operating loss
				deductions of a water's-edge group are addressed in ARM
				42.23.805.
15-31-501, MCA; IMP,
					 15-31-301,
					 15-31-322,
					 15-31-326,
					 15-31-505,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.3 - Water's-Edge › Rule 42.26.311 - CERTAIN CORPORATIONS INCLUDABLE IN A WATER'S-EDGE COMBINED RETURN

Current through Register Vol. 13, July 5, 2024
(1) Domestic international sales corporations (DISCs), as defined in sections  991 through  994 of the IRC, export trade corporations, as described in sections  970 and  971 of the IRC, and foreign sales corporations, as defined in sections  921 through 927 of the IRC, are included in a water's-edge return. DISCs are specifically taxable notwithstanding the general exempt language of  15-31-102, MCA.
(2) A corporation incorporated outside the United States, if over 50 percent of the voting stock is owned directly or indirectly by a member of the includable group and if more than 20 percent of the average of its payroll and property, including payroll and property from disregarded entities and its pro rata share of unitary partnerships' payroll and property, is assignable to a location inside the United States, is included in a water's-edge return. For purposes of computing this average, the payroll factor provided for by  15-31-308, MCA, and the property factor as provided for by  15-31-306, MCA, shall be added together and divided by two, or by one if the denominator of either the property or payroll factor is zero.
(3) A corporation incorporated in the United States, if the denominator of both the property and payroll factor is zero, is included in a water's-edge return.
(4) If a corporation is "engaged in business" or "doing business" pursuant to  15-31-101, MCA, in this state, it is included in a water's-edge return.
AUTH:  15-31-501, MCA; IMP:  15-31-322,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.3 - Water's-Edge › Rule 42.26.312 - TREATMENT OF DIVIDENDS FOR PURPOSES OF A WATER'S-EDGE COMBINED RETURN

Current through Register Vol. 13, July 5, 2024
(1) Eighty percent of the dividends
				apportionable under this rule are to be excluded from income subject to
				apportionment where:
(a) dividends received
				from foreign corporations, taxable for federal purposes, are considered to be
				income subject to apportionment;
(b) amounts included in income under sections
				951 through 962 and 964 of the IRC are considered taxable foreign dividends;
(c) the after-tax net income of
				United States corporations excluded from eligibility as affiliated corporations
				under ARM 42.26.311 and possession
				corporations defined in sections 931 through 934 and 936 of the IRC, is
				considered to be a dividend for purposes of this rule;
(i) In calculating the after tax net income,
				where the corporation is included in a federal consolidated income tax return,
				the consolidated tax liability shall be apportioned among the members of the
				group in accord with the ratio which that portion of the consolidated taxable
				income attributable to each member of the group having positive taxable income,
				bears to the total consolidated taxable income of all companies in the
				consolidated group having positive taxable income. For purposes of this
				calculation, the consolidated tax liability shall be the tax liability
				calculated on the federal consolidated income tax return after application of
				federal tax credits.
(ii) Where
				such corporations have no net income for the taxable year in question, the
				amount to be included as dividends received from corporations outside the
				United States shall equal zero.
(d) dividends between members in the
				water's-edge combinable group are eliminated from the calculation of
				apportionable income;
(e) deemed
				dividend distributions pursuant to section 78 of the IRC are excluded from the
				calculation of apportionable income; and
(f) the limited inclusion of dividend income
				specified in this rule is in lieu of attempts to allocate expenses attributable
				to the generation of such dividend income. For apportionment factor purposes
				only the dividend income considered to be apportionable income shall be
				included in the receipts factor numerator or denominator as
				appropriate.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.3 - Water's-Edge › Rule 42.26.313 - REORGANIZATIONS OF WATER'S-EDGE TAXPAYERS

Current through Register Vol. 13, July 5, 2024
(1) A taxpayer who
				becomes a member of a water's-edge group, subsequent to an election by the
				group, will be deemed to have elected and will be bound by the election.
				Procedures provided in ARM
				42.26.302 for renewal of a
				water's-edge election would apply.
(2) If a water's-edge taxpayer is purchased
				or otherwise acquired by an entity not subject to tax under
				15-31-101, MCA, and whose parent
				and affiliates are not subject to tax under
				15-31-101, MCA, the water's-edge
				election carries over to each member of the new affiliated group.
(3) If a water's-edge taxpayer is purchased
				or otherwise acquired by a non-water's-edge taxpayer, who is subject to tax
				under 15-31-101, MCA, the water's-edge
				election will be terminated as of the purchase date.
(4) If a water's-edge taxpayer is a party to
				reorganization, and as a result ceases to exist, the water's-edge election will
				be terminated as of the date of the reorganization.
(5) If a water's-edge taxpayer is a party to
				a reorganization, and survives the reorganization, the water's-edge election
				carries over to the new affiliated group. Procedures provided for in ARM
				42.26.302 for renewal of a
				water's-edge election would apply.
(6) If a nonwater's-edge taxpayer is
				purchased or otherwise acquired by an entity not subject to tax under
				15-31-101, MCA, and whose parent
				and affiliates are not subject to tax under
				15-31-101, MCA, the taxpayer may
				make a valid water's-edge election as provided for in ARM 42.26.302. The
				taxpayer must complete Form WE - ELECT and file the form with the department
				within the first 90 days after the purchase or acquisition date.
(7) If a nonwater's-edge taxpayer who did not
				previously own greater than 50 percent of an entity incorporated outside the
				United States purchases or otherwise acquires an entity incorporated outside
				the United States, the taxpayer may make a valid water's-edge election as
				provided for in ARM 42.26.302. The taxpayer must complete Form WE - ELECT and
				file the form with the department within the first 90 days after the
				acquisition date.
AUTH:
					 15-31-501, MCA; IMP:
					 15-31-324,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.4 - Special Rules Related to Installment Sales › Rule 42.26.401 - SPECIAL RULES RELATED TO INSTALLMENT SALES

Current through Register Vol. 13, July 5, 2024
(1)
				The amount of the gain or loss from the sale of assets used in the regular
				course of business which is apportioned to this state shall be calculated
				separately if the taxpayer elects to report the gain on the installment method.
				The separate calculation shall be made:
(a)
				for installment sales of Montana assets which generate net gains in excess of
				$2,500,000; or
(b) installment
				sales of major assets located outside the state of Montana which generate net
				gains in excess of $10,000,000.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.4 - Special Rules Related to Installment Sales › Rule 42.26.402 - UNREPORTED INCOME ON INSTALLMENT OBLIGATION IN YEAR OF DISSOLUTION

Current through Register Vol. 13, July 5, 2024
(1) Where a taxpayer elects to report income
				arising from the sale or other disposition of property as provided under this
				rule and the entire income therefrom has not been reported prior to the year
				that the taxpayer ceases to be subject to tax under
				15-31-301, MCA, the unreported
				income shall be included in the measure of the tax for the last year in which
				the taxpayer is subject to tax under
				15-31-301, MCA.
Sec.
					 15-31-313 and
					 15-31-501, MCA; IMP, Sec.
					 15-31-305,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.5 - Public Law 86-272 › Rule 42.26.501 - PUBLIC LAW 86-272

Current through Register Vol. 13, July 5, 2024
(1)Public Law
				86-272, 15 USC
				381 -
				384 (hereafter P.L. 86-272 ),
				restricts a state from imposing a net income tax on income derived within its
				borders from interstate commerce if the only business activity of the company
				within the state consists of the solicitation of orders from sales of tangible
				personal property, which orders are to be sent outside the state for acceptance
				or rejection, and, if accepted, are filled by shipment or delivery from a point
				outside the state. If any sales are made into a state that is precluded by P.L.
				86-272 from taxing the income of the seller, such sales remain subject to
				throwback to the appropriate state that does have jurisdiction to impose its
				net income tax upon the income derived from those sales.
Sec.
					 15-1-201 and
					 15-31-313, MCA; IMP, Sec.
					 15-1-601,
					 15-31-301,
					 15-31-302,
					 15-31-303,
					 15-31-304,
					 15-31-305,
					 15-31-306,
					 15-31-307,
					 15-31-308,
					 15-31-309,
					 15-31-310,
					 15-31-311, and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.5 - Public Law 86-272 › Rule 42.26.502 - NATURE OF PROPERTY BEING SOLD

Current through Register Vol. 13, July 5, 2024
(1) Only
				the solicitation to sell personal property is afforded immunity under P.L.
				86-272; therefore, the leasing, renting, licensing, or other disposition of
				tangible personal property, or transactions involving intangibles, such as
				franchises, patents, copyrights, trademarks, service marks and the like, or any
				other type of property, are not protected activities under P.L. 86-272. The
				sale or delivery and the solicitation for the sale or delivery of any type of
				service that is not either ancillary to solicitation or otherwise set forth as
				a protected activity under ARM
				42.26.504 is also not protected
				under P.L. 86-272 or this rule.
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601,
					 15-31-301,
					 15-31-302,
					 15-31-303,
					 15-31-304,
					 15-31-305,
					 15-31-306,
					 15-31-307,
					 15-31-308,
					 15-31-309,
					 15-31-310,
					 15-31-311, and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.5 - Public Law 86-272 › Rule 42.26.503 - SOLICITATION OF ORDERS AND ACTIVITIES ANCILLARY TO SOLICITATION

Current through Register Vol. 13, July 5, 2024
(1) For the in-state activity to be a
				protected activity under P.L. 86-272, it must be limited solely to solicitation
				(except for de minimis activities described in ARM
				42.26.505, and those activities
				conducted by independent contractors described in ARM
				42.26.511 ). Solicitation means
				speech or conduct that explicitly or implicitly invites an order, and
				activities that neither explicitly nor implicitly invite an order, but are
				entirely ancillary to requests for an order.
(a) Ancillary activities are those activities
				that serve no independent business function for the seller apart from their
				connection to the solicitation of orders. Activities that a seller would engage
				in apart from soliciting orders shall not be considered as ancillary to the
				solicitation of orders. The mere assignment of activities to sales personnel
				does not, merely by such assignment, make such activities ancillary to
				solicitation of orders.
(b)
				Additionally, activities that seek to promote sales are not ancillary because
				P.L. 86-272 does not protect activity that facilitates sales; it only protects
				ancillary activities that facilitate the request for an order. The conducting
				of activities not falling within the foregoing definition of solicitation will
				cause the company to lose its protection from a net income tax afforded by P.L.
				86-272, unless the disqualifying activities, taken together, are either de
				minimis or are otherwise permitted under this sub-chapter.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.5 - Public Law 86-272 › Rule 42.26.504 - DE MINIMIS ACTIVITIES

Current through Register Vol. 13, July 5, 2024
(1) De minimis
				activities are those that, when taken together, establish only a trivial
				connection with Montana. An activity conducted within Montana on a regular or
				systematic basis or pursuant to a company policy (whether such policy is in
				writing or not) shall normally not be considered trivial. Whether or not an
				activity consists of a trivial or non-trivial connection with Montana is to be
				measured on both a qualitative and quantitative basis. If such activity either
				qualitatively or quantitatively creates a non-trivial connection with Montana,
				then such activity exceeds the protection of P.L. 86-272. Establishing that the
				disqualifying activities only account for a relatively small part of the
				business conducted within Montana is not determinative of whether a de minimis
				level of activity exists. The relative economic importance of the disqualifying
				in-state activities, as compared to the protected activities, does not
				determine whether the conduct of the disqualifying activities within Montana is
				inconsistent with the limited protection afforded by P.L. 86-272.
Sec.
					 15-1-201 and
					 15-31-313, MCA; IMP, Sec.
					 15-1-601,
					 15-31-301,
					 15-31-302,
					 15-31-303,
					 15-31-304,
					 15-31-305,
					 15-31-306,
					 15-31-307,
					 15-31-308,
					 15-31-309,
					 15-31-310,
					 15-31-311, and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.5 - Public Law 86-272 › Rule 42.26.506 - INDEPENDENT CONTRACTORS

Current through Register Vol. 13, July 5, 2024
(1)P.L. 86-272
				provides protection to certain in-state activities if conducted by an
				independent contractor that would not be afforded if performed by the company
				or its employees or other representatives. Independent contractors may engage
				in the following limited activities in Montana without the company's loss of
				immunity:
(a) soliciting sales;
(b) making sales; and
(c) maintaining an office.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.5 - Public Law 86-272 › Rule 42.26.507 - APPLICATION OF DESTINATION STATE LAW IN CASE OF CONFLICT

Current through Register Vol. 13, July 5, 2024
(1) When it appears that two or more
				signatory states have included, or will include, the same receipts from a sale
				in their respective sales factor numerators, at the written request of the
				company, these states shall in good faith confer with one another to determine
				which state should be assigned the receipts. Such conference shall identify
				what law, rule, or written guideline, if any, has been adopted in the state of
				destination with respect to the issue. The state of destination shall be that
				location at which the purchaser or its designee actually receives the property,
				regardless of the f.o.b. point or other conditions of sale. In determining
				which state is to receive the assignment of the receipts at issue, preference
				shall be given to any clearly applicable law, regulation, or written guideline
				that has been adopted in the state of destination.
(2) The state of Montana is not required by
				this rule to follow any other state's law, rule, or written guideline should
				Montana determine that to do so:
(a) would
				conflict with its own laws, rules, or written guidelines; and
(b) would not clearly reflect the
				income-producing activity of the company within Montana.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.5 - Public Law 86-272 › Rule 42.26.508 - APPLICATION OF STATEMENT OF FOREIGN COMMERCE

Current through Register Vol. 13, July 5, 2024
(1)P.L. 86-272 specifically applies, by its
				terms, to "interstate commerce" and does not directly apply to foreign
				commerce. Montana will apply the provisions of P.L. 86-272 and the rules found
				in this sub-chapter to business activities conducted in foreign commerce.
				Therefore, whether business activities are conducted by:
(a) a foreign or domestic company selling
				tangible personal property into a country outside of the United States from a
				point within Montana; or
(b) either
				company selling such property into Montana from a point outside of the United
				States, the principles under this statement apply equally to determine whether
				the sales transactions are protected and the company immune from taxation in
				either Montana or in the foreign country, as the case might be, and whether, if
				applicable, Montana will apply its throwback provisions.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.5 - Public Law 86-272 › Rule 42.26.509 - REGISTRATION OR QUALIFICATION TO DO BUSINESS

Current through Register Vol. 13, July 5, 2024
(1)
				A company that registers or otherwise formally qualifies to do business within
				Montana does not, by that fact alone, lose its protection under P.L. 86-272.
				Where separate from or ancillary to such registration or qualification, the
				company receives and seeks to use or protect any additional benefit or
				protection from Montana through activity not otherwise protected under P.L.
				86-272, such protection shall be removed.
Sec.
					 15-1-201 and
					 15-31-313, MCA; IMP, Sec.
					 15-1-601,
					 15-31-301,
					 15-31-302,
					 15-31-303,
					 15-31-304,
					 15-31-305,
					 15-31-306,
					 15-31-307,
					 15-31-308,
					 15-31-309,
					 15-31-310,
					 15-31-311, and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.5 - Public Law 86-272 › Rule 42.26.510 - LOSS OF PROTECTION FOR CONDUCTING UNPROTECTED ACTIVITY DURING PART OF THE TAX YEAR

Current through Register Vol. 13, July 5, 2024
(1) The protection
				afforded under P.L. 86-272 and the provisions of this rule shall be determined
				on a tax year by tax year basis. Therefore, if at any time during a tax year
				the company conducts activities that are not protected under P.L. 86-272 or
				this rule, no sales in Montana or income earned by the company attributed to
				Montana during any part of the applicable tax year shall be protected from
				taxation under P.L. 86-272 or this rule.
Sec.
					 15-1-201 and
					 15-31-313, MCA; IMP, Sec.
					 15-1-601,
					 15-31-301,
					 15-31-302,
					 15-31-303,
					 15-31-304,
					 15-31-305,
					 15-31-306,
					 15-31-307,
					 15-31-308,
					 15-31-309,
					 15-31-310,
					 15-31-311, and
					 15-31-312,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.5 - Public Law 86-272 › Rule 42.26.511 - APPLICATION OF THE JOYCE RULE AUTH: 15-1-201, 15-31-313, MCA (Repealed)

Current through Register Vol. 13, July 5, 2024
AUTH:
					 15-1-201,
					 15-31-313, MCA; IMP:
					 15-1-601,
					 15-31-301,
					 15-31-302,
					 15-31-303,
					 15-31-304,
					 15-31-305,
					 15-31-306,
					 15-31-307,
					 15-31-308,
					 15-31-309,
					 15-31-310,
					 15-31-311,
					 15-31-312,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.6 - Railroads › Rule 42.26.601 - DEFINITIONS

Current through Register Vol. 13, July 5, 2024
The following definitions apply to this subchapter:
(1) "Total revenue ton-miles occurring
				everywhere" means the figure a railroad includes on Schedule 755, line 110,
				that is associated with the Class 1 Annual Railroad Report (R-1) which it files
				with the federal Surface Transportation Board.
(2) "Total revenue ton-miles occurring within
				this state" means the figure a railroad annually reports to the Montana Public
				Service Commission on Schedule-931, line 36.
AUTH:
					 15-1-201,
					 15-31-313,
					 15-31-501, MCA; IMP:
					 15-1-601,
					 15-31-301,
					 15-31-302,
					 15-31-303,
					 15-31-304,
					 15-31-305,
					 15-31-306,
					 15-31-307,
					 15-31-308,
					 15-31-309,
					 15-31-310,
					 15-31-311,
					 15-31-312,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.6 - Railroads › Rule 42.26.602 - GENERAL RULES FOR RAILROADS

Current through Register Vol. 13, July 5, 2024
(1) Where a
				railroad has income from sources both within and without this state, the amount
				of apportionable income from sources within this state shall be determined
				pursuant to Title 15, chapter 31, part 3, MCA, except as modified by ARM
				42.26.606.
(2) The requirements of
				this rule are effective for tax years beginning after December 31,
				2022.
AUTH:
					 15-1-201,
					 15-31-313,
					 15-31-501, MCA; IMP:
					 15-1-601,
					 15-31-312,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.6 - Railroads › Rule 42.26.603 - THE PROPERTY FACTOR (REPEALED)

Current through Register Vol. 13, July 5, 2024
AUTH:
					 15-1-201,
					 15-31-313,
					 15-31-501, MCA IMP:
					 15-1-601,
					 15-31-305,
					 15-31-306,
					 15-31-307,
					 15-31-312,
					 MCA