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 42.26.209 - TAXABILITY

Current through Register Vol. 13, July 5, 2024
(1) The concept of taxability in another
				state is based upon the premise that every state in which the taxpayer is
				engaged in business activity may impose an income tax even though every state
				does not do so. In states which do not, other types of taxes may be imposed as
				a substitute for an income tax. Therefore, only those taxes enumerated in
				15-31-303, MCA, which may be
				considered as basically revenue-raising, rather than regulatory, measures shall
				be considered in determining whether the taxpayer is "subject to" one of the
				taxes specified in
				15-31-303, MCA, in another
				state.
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601 and
					 15-31-303,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.210 - TAXABLE IN ANOTHER STATE

Current through Register Vol. 13, July 5, 2024
(1) Under
				15-31-301 and
				15-1-601, Article IV(2), MCA, the
				taxpayer is subject to the allocation and apportionment provisions of Title 15,
				chapter 31, part 3, MCA, if it has income from business activity that is
				taxable both within and without this state. A taxpayer's income from business
				activity is taxable without this state if such taxpayer, by reason of such
				business activity (i.e., the transactions and activity occurring in the regular
				course of a particular trade or business), is taxable in another state within
				the meaning of
				15-31-303, MCA.
(2) A taxpayer is not taxable in another
				state with respect to a particular trade or business merely because the
				taxpayer conducts activities in such other state pertaining to the production
				of nonapportionable income or business activities relating to a separate trade
				or business.
AUTH:
					 15-1-201,
					 15-31-313,
					 15-31-501, MCA; IMP:
					 15-1-601,
					 15-31-303,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.211 - CONCEPT OF "SUBJECT TO" A TAX

Current through Register Vol. 13, July 5, 2024
(1) A
				taxpayer is "subject to" one of the taxes specified in
				15-31-303, MCA, if it carries on
				business activities in such state and that state imposes such a tax on the
				taxpayer. Any taxpayer that asserts that it is subject to one of the taxes
				specified in
				15-31-303, MCA, in another state
				shall furnish to the department, upon its request, evidence to support such
				assertion. The department may request that such evidence include proof that the
				taxpayer has filed the requisite tax return in the other state and has paid any
				taxes imposed under the law of the other state. The taxpayer's failure to
				produce such proof may be taken into account in determining whether the
				taxpayer in fact is subject to one of the taxes specified in
				15-31-303, MCA, in the other
				state.
(2) If the taxpayer
				voluntarily files and pays one or more of such taxes when not required to do so
				by the laws of that state, or pays a minimal fee for qualification, for
				organization, or for the privilege of doing business in that state, but does
				not actually engage in business activity in that state or does actually engage
				in business activity, not sufficient for nexus, and the minimum tax bears no
				relation to the taxpayer's business activity within that state, the taxpayer is
				not "subject to" one of the taxes specified within the meaning of
				15-31-303, MCA.
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601 and
					 15-31-303,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.212 - STATE TAXING JURISDICTION

Current through Register Vol. 13, July 5, 2024
(1) The second
				test, that of
				15-31-303, MCA, applies if the
				taxpayer's business activity is sufficient to give the state jurisdiction
				authority to impose a net income tax by reason of such business activity under
				the Constitution and statutes of the United States. Jurisdiction to tax is not
				present where the state is prohibited from imposing the tax by reason of the
				provisions of Public Law 86-272,
				15 U.S.C. Sections
				381 - 385.
(2) In the case of any "state" as defined in
				15-31-302, MCA, other than a state
				of the United States or political subdivision of such a state, the
				determination of whether such "state" has jurisdiction to subject the taxpayer
				to a net income tax shall be made as though the jurisdictional standards
				applicable to a state of the United States applied in that "state." If
				jurisdiction is otherwise present, such "state" is not considered as without
				jurisdiction by reason of the provisions of a treaty between that state and the
				United States.
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601 and
					 15-31-303,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.213 - WATER'S-EDGE ELECTION

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.301
Sec.
					 15-31-501, MCA; IMP, Sec.
					 15-31-322,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.214 - DEFINITIONS (REPEALED)

Current through Register Vol. 13, July 5, 2024
Sec.
					 15-31-501, MCA; IMP, Sec.
					 15-31-321,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.215 - PROCEDURE

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.302
Sec.
					 15-31-501, MCA; IMP, Sec.
					 15-31-324,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.216 - REVOCATION OR NON RENEWAL OF WATER'S-EDGE ELECTIONS

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.303
Sec.
					 15-31-501, MCA; IMP, Sec.
					 15-31-324,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.217 - DOMESTIC DISCLOSURE SPREADSHEET

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.304
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 42.26.2 - Income Allocation and Apportionment › Rule 42.26.218 - TAX RATES

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.305
Sec.
					 15-31-501, MCA; IMP, Sec.
					 15-31-121,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.219 - APPLICABILITY

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.306
Sec.
					 15-31-501, MCA; IMP,
					 15-31-322,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.221 - APPORTIONMENT AND ALLOCATION GENERALLY

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.307
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 42.26.222 - APPORTIONMENT FORMULA

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.308
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 42.26.223 - APPORTIONMENT FACTORS

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.309
Sec.
					 15-31-501, MCA; IMP, Sec.
					 15-31-323,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.224 - DISREGARDING OR MODIFYING A WATER'S-EDGE ELECTION

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.310
Sec.
					 15-31-501, MCA; IMP, Sec.
					 15-31-301,
					 15-31-322,
					 15-31-326, and
					 15-31-505,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.225 - CERTAIN CORPORATIONS INCLUDABLE IN A WATER'S-EDGE COMBINED RETURN

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.311
Sec.
					 15-31-501, MCA; IMP, Sec.
					 15-31-322,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.226 - TREATMENT OF DIVIDENDS FOR PURPOSES OF A WATER'S-EDGE COMBINED RETURN

Current through Register Vol. 13, July 5, 2024
This Rule has been transferred to
				  42.26.312
Sec.
					 15-31-501, MCA; IMP, Sec.
					 15-31-325,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.227 - PARTNERSHIP DEFINED (REPEALED)

Current through Register Vol. 13, July 5, 2024
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 42.26.228 - TREATMENT OF PARTNERSHIPS AND DISREGARDED ENTITIES IN THE APPORTIONMENT FORMULA

Current through Register Vol. 13, July 5, 2024
(1) If the
				operations of a partnership or disregarded entity are unitary with the business
				operations of a corporate partner or disregarded entity owner, the corporate
				partner's or owner's pro rata share of the property, payroll, and sales of the
				partnership or disregarded entity will be included in the computation of the
				apportionment factors.
(2) The
				definition of unitary will be the same as the definition of a unitary business
				as outlined in
				15-31-301, MCA. However, the
				corporate partner or disregarded entity owner need not own in excess of 50% of
				the partnership or disregarded entity for the partnership or disregarded entity
				to be unitary.
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 42.26.229 - PARTNERSHIPS AND DISREGARDED ENTITIES - NONAPPORTIONABLE INCOME

Current through Register Vol. 13, July 5, 2024
(1) A partnership or disregarded entity that
				is not part of a unitary business operation of a corporate partner or
				disregarded entity owner will be treated as follows:
(a) The corporate partner's or disregarded
				entity owner's share of partnership or disregarded entity income will not be
				included in apportionable income to be apportioned, but allocated to the states
				where the partnership or disregarded entity operates based upon the
				apportionment formula outlined in
				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 42.26.230 - APPORTIONMENT FORMULA - EXCLUSIONS

Current through Register Vol. 13, July 5, 2024
(1) If a
				taxpayer has property, payroll, or receipts assignable under
				15-31-305 through
				15-31-311, MCA, and attendant
				regulations to a location where it is not taxable under
				15-31-303, MCA, the property,
				payroll, or receipts assigned to that location shall be excluded from the
				apportionment formula.
(2) For
				purposes of determining whether a taxpayer is taxable in a location, ARM
				42.26.209 through
				42.26.212 will apply.
AUTH:
					 15-31-313,
					 15-31-501, MCA; IMP:
					 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 42.26.2 - Income Allocation and Apportionment › Rule 42.26.231 - PROPERTY FACTOR IN GENERAL

Current through Register Vol. 13, July 5, 2024
(1) The property
				factor of the apportionment formula for each trade or business of the taxpayer
				shall include all real and tangible personal property owned or rented and used
				during the tax period in the regular course of such trade or
				business.
(2) Property used in
				connection with the production of nonapportionable income shall be excluded
				from the property factor.
(3)
				Property used both in the regular course of taxpayer's trade or business and in
				the production of nonapportionable income shall be included in the factor only
				to the extent the property is used in the regular course of taxpayer's trade or
				business. The method of determining that portion of the value to be included in
				the factor will depend on the facts of each case.
(4) The property factor of the apportionment
				formula for each trade or business of the taxpayer shall include all real and
				tangible personal property owned or rented and used during the tax period in
				the regular course of such trade or business.
AUTH:
					 15-1-201,
					 15-31-313,
					 15-31-501, MCA; IMP:
					 15-1-601,
					 15-31-305,
					 15-31-306,
					 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 42.26.232 - PROPERTY USED FOR THE PRODUCTION OF APPORTIONABLE INCOME

Current through Register Vol. 13, July 5, 2024
(1) Property shall be included in the
				property factor if it is actually used or is available for or capable of being
				used during the tax period in the regular course of the trade or business of
				the taxpayer. Property held as reserves or standby facilities or property held
				as a reserve source of materials shall be included in the factor. For example,
				a plant temporarily idle or raw material reserves not currently being processed
				are includable in the factor.
(2)
				Property or equipment under construction during the tax period (except
				inventoriable goods in process) shall be excluded from the factor until such
				property is actually used in the regular course of the trade or business of the
				taxpayer. If the property is partially used in the regular course of the trade
				or business of the taxpayer while under construction, the value of the property
				to the extent used shall be included in the property factor.
(3) Property used in the regular course of
				the trade or business of the taxpayer shall remain in the property factor until
				its permanent withdrawal is established by an identifiable event such as its
				conversion to the production of nonapportionable income, its sale, or the lapse
				of an extended period of time (normally five years) during which the property
				is held for sale.
AUTH:
					 15-1-201,
					 15-31-313,
					 15-31-501, MCA; IMP:
					 15-1-601,
					 15-31-305,
					 15-31-306,
					 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 42.26.233 - CONSISTENCY IN REPORTING WITH RESPECT TO PROPERTY

Current through Register Vol. 13, July 5, 2024
(1) In filing returns with this state, if the
				taxpayer departs from or modifies the manner of valuing property or of
				excluding or including property in the property factor, used in returns for
				prior years, the taxpayer shall disclose in the return for the current year the
				nature and extent of the modification.
(2) If the returns or reports filed by the
				taxpayer with all states to which the taxpayer reports under Article IV of the
				Multistate Tax Compact or the Uniform Division of Income for Tax Purposes Act
				are not uniform in the valuation of property and in the exclusion or inclusion
				of property in the property factor, the taxpayer shall disclose in its return
				to this state the nature and extent of the variance.
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,
					 15-31-321,
					 15-31-322,
					 15-31-323,
					 15-31-324,
					 15-31-325,
					 15-31-326,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.234 - NUMERATOR OF PROPERTY FACTOR

Current through Register Vol. 13, July 5, 2024
(1) The
				numerator of the property factor shall include the average value of the real
				and tangible personal property owned or rented by the taxpayer and used in this
				state during the tax period in the regular course of the trade or business of
				the taxpayer.
(2) Property in
				transit between locations of the taxpayer to which it belongs shall be
				considered to be at the destination for purposes of the property factor.
				Property in transit between a buyer and seller which is included by a taxpayer
				in the denominator of its property factor in accordance with its regular
				accounting practices shall be included in the numerator according to the state
				of destination.
(3) The value of
				mobile or movable property such as construction equipment, trucks, or leased
				electronic equipment which is located within and without this state during the
				tax period shall be determined for purposes of the numerator of the factor on
				the basis of total time within the state during the tax period. An automobile
				assigned to a traveling employee shall be included in the numerator of the
				factor of the state to which the employee's compensation is assigned under the
				payroll factor or in the numerator of the state in which the automobile is
				licensed.
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,
					 15-31-321,
					 15-31-322,
					 15-31-323,
					 15-31-324,
					 15-31-325,
					 15-31-326,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.235 - VALUATION OF OWNED PROPERTY

Current through Register Vol. 13, July 5, 2024
(1) Property
				owned by the taxpayer shall be valued at its original cost. As a general rule
				"original cost" is deemed to be the basis of the property for federal income
				tax purposes (prior to any federal adjustments) at the time of acquisition by
				the taxpayer and adjusted by subsequent capital additions or improvements
				thereto and partial disposition thereof, by reason of sale, exchange,
				abandonment, etc.
(2) If the
				original cost of property is unascertainable, the property is included in the
				factor at its fair market value as of the date of acquisition by the
				taxpayer.
(3) Inventory of stock of
				goods shall be included in the factor in accordance with the valuation method
				used for federal income tax purposes.
(4) Property acquired by gift or inheritance
				shall be included in the factor as its basis for determining depreciation for
				federal income tax purposes.
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601,
					 15-31-305,
					 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 42.26.236 - VALUATION OF RENTED PROPERTY

Current through Register Vol. 13, July 5, 2024
(1) Property
				rented by the taxpayer is valued at eight times its net annual rental rate.
(a) The net annual rental rate for any item
				of rented property is the annual rental rate paid by the taxpayer for such
				property, with the exception of (1) (b), less the aggregate annual sub-rental
				rates paid by subtenants of the taxpayer. (ARM
				42.26.262 addresses special rules
				where the use of such net annual rental rate produces a negative or clearly
				inaccurate value or where property is used by the taxpayer at no charge or
				rented at a nominal rental rate).
(b) Sub-rents are not deducted when the
				sub-rents constitute apportionable income because the property that produces
				the sub-rents is used in the regular course of a trade or business of the
				taxpayer when it is producing such income. Accordingly, there is no reduction
				in its value.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.237 - AVERAGING PROPERTY VALUES

Current through Register Vol. 13, July 5, 2024
(1) As a
				general rule, the average value of property owned by the taxpayer shall be
				determined by averaging the values at the beginning and ending of the tax
				period. However, the department may require or allow averaging by monthly
				values if such method of averaging is required to properly reflect the average
				value of the taxpayer's property for the tax period.
(2) Averaging by monthly values will
				generally be applied if substantial fluctuations in the values of the property
				exist during the tax period or where property is acquired after the beginning
				of the tax period or disposed of before the end of the tax period.
(3) Averaging with respect to rented property
				is achieved automatically by the method of determining the net annual rental
				rate of such property as set forth in ARM
				42.26.236.
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,
					 15-31-321,
					 15-31-322,
					 15-31-323,
					 15-31-324,
					 15-31-325,
					 15-31-326,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.241 - PAYROLL FACTOR IN GENERAL

Current through Register Vol. 13, July 5, 2024
(1) The payroll
				factor of the apportionment formula for each trade or business of the taxpayer
				shall include the total amount paid by the taxpayer in the regular course of
				its trade or business for compensation during the tax period.
(2) The total amount "paid" to employees is
				determined upon the basis of the taxpayer's accounting method. If the taxpayer
				has adopted the accrual method of accounting, all compensation properly accrued
				shall be deemed to have been paid. Notwithstanding the taxpayer's method of
				accounting, at the election of the taxpayer, compensation paid to employees may
				be included in the payroll factor by use of the cash method if the taxpayer is
				required to report such compensation under such method for unemployment
				compensation purposes.
(3) The
				compensation of any employee on account of activities which are connected with
				the production of nonapportionable income shall be excluded from the
				factor.
(4) ARM
				42.26.202 provides the definitions
				applicable to this rule.
AUTH:
					 15-1-201,
					 15-31-313,
					 15-31-501, MCA; IMP:
					 15-1-601,
					 15-31-305,
					 15-31-308,
					 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 42.26.242 - CONSISTENCY IN REPORTING WITH RESPECT TO PAYROLL

Current through Register Vol. 13, July 5, 2024
(1) In filing returns with this state, if the
				taxpayer departs from or modifies the treatment of compensation paid used in
				returns for prior years, the taxpayer shall disclose in the return for the
				current year the nature and extent of the modification.
(2) If the returns or reports filed by the
				taxpayer with all states to which the taxpayer reports under Article IV of the
				Multistate Tax Compact or the Uniform Division of Income for Tax Purposes Act
				are not uniform in the treatment of compensation paid, the taxpayer shall
				disclose in its return to this state the nature and extent of the
				variance.
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,
					 15-31-321,
					 15-31-322,
					 15-31-323,
					 15-31-324,
					 15-31-325,
					 15-31-326,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.243 - DENOMINATOR OF PAYROLL FACTOR

Current through Register Vol. 13, July 5, 2024
(1) The
				denom-inator of the payroll factor is the total compensation paid everywhere
				during the tax period. Accordingly, the compensation paid to employees whose
				services are performed entirely in State C where the taxpayer is immune from
				taxation for example, by Public Law 86-272, are included in the denominator of
				the payroll factor.
Sec.
					 15-1-201,
					 15-31-313, and
					 15-31-501, MCA; IMP, Sec.
					 15-1-601,
					 15-31-305,
					 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 42.26.244 - NUMERATOR OF PAYROLL FACTOR

Current through Register Vol. 13, July 5, 2024
(1) The
				numerator of the payroll factor is the total amount paid in this state during
				the tax period by the taxpayer for compensation. The tests in
				15-31-309, MCA, to be applied in
				determining whether compensation is paid in this state are derived from the
				Model Unemployment Compensation Act. Accordingly, if compensation paid to
				employees is included in the payroll factor by use of the cash method of
				accounting or if the taxpayer is required to report such compensation under
				such method for unemployment compensation purposes, it shall be presumed that
				the total wages reported by the taxpayer to this state for unemployment
				compensation purposes constitutes compensation paid in this state, except for
				compensation excluded under ARM
				42.26.241. The presumption may be
				overcome by satisfactory evidence that an employee's compensation is not
				properly reportable to this state for unemployment compensation
				purposes.
(2) Refer to ARM
				42.26.202 for definitions
				applicable to this rule.
(3)
				Payroll associated with the operation or transportation of mobile or movable
				property, as described in ARM
				42.26.234, shall be assigned to
				this state on the proportion of mileage traveled within the state to mileage
				traveled everywhere during the tax period.
15-1-201,
					 15-31-313,
					 15-31-501, MCA; IMP,
					 15-1-601,
					 15-31-305,
					 15-31-308,
					 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 42.26.245 - NUMERATOR OF RECEIPTS FACTOR - SALES OTHER THAN SALES OF TANGIBLE PERSONAL PROPERTY - MARKET BASED SOURCING

Current through Register Vol. 13, July 5, 2024
(1) In order to
				satisfy the requirements of this rule, a taxpayer's assignment of receipts from
				sales of other than tangible personal property must be consistent with the
				following principles:
(a) A taxpayer shall
				apply the principles set forth in this rule based on objective criteria and
				shall consider all sources of information reasonably available to the taxpayer
				at the time of its tax filing including, without limitation, the taxpayer's
				books and records kept in the normal course of business. A taxpayer shall
				determine its method of assigning receipts in good faith, and apply it
				consistently with respect to similar transactions and year to year. A taxpayer
				shall retain contemporaneous records that explain the determination and
				application of its method of assigning receipts, including the underlying
				assumptions, and shall provide those records to the department upon
				request.
(b) This rule provides
				various assignment methods that apply sequentially in a hierarchy. For each
				sale to which a hierarchical method applies, a taxpayer must make a reasonable
				effort to apply the primary method applicable to the sale before seeking to
				apply the next method in the hierarchy (and must continue to do so with each
				succeeding method in the hierarchy, where applicable). For example, in some
				cases, the applicable method first requires a taxpayer to determine the state
				or states of assignment, and if the taxpayer cannot do so, the method requires
				the taxpayer to reasonably approximate the state or states. In these cases, the
				taxpayer must attempt to determine the state or states of assignment (i.e.,
				apply the primary method in the hierarchy) in good faith and with reasonable
				effort before it may reasonably approximate the state or states.
(c) A taxpayer's method of assigning its
				receipts, including the use of a method of approximation, where applicable,
				must reflect an attempt to obtain the most accurate assignment of receipts
				consistent with the regulatory standards set forth is this rule, rather than an
				attempt to lower the taxpayer's tax liability. A method of assignment that is
				reasonable for one taxpayer may not necessarily be reasonable for another
				taxpayer, depending upon the applicable facts.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.246 - NUMERATOR OF RECEIPTS FACTOR - SALE, RENTAL, LEASE, OR LICENSE OF REAL PROPERTY

Current through Register Vol. 13, July 5, 2024
(1) In the case of
				a sale, rental, lease, or license of real property, the receipts from the sale
				are in Montana if and to the extent that the property is in Montana.
AUTH:
					 15-1-201;
					 15-31-313, MCA; IMP:
					 15-1-601,
					 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 42.26.247 - NUMERATOR OF RECEIPTS FACTOR - RENTAL, LEASE, OR LICENSE OF TANGIBLE PERSONAL PROPERTY

Current through Register Vol. 13, July 5, 2024
(1) In the case of
				a rental, lease, or license of tangible personal property, the receipts from
				the sale are in Montana if and to the extent that the property is in Montana.
				If the property is mobile property that is located both within and without
				Montana during the period of the lease or other contract, the receipts assigned
				to Montana are the receipts from the contract period multiplied by the fraction
				computed under ARM
				42.26.234(3) (as
				adjusted when necessary to reflect differences between usage during the
				contract period and usage during the taxable year).
AUTH:
					 15-1-201,
					 15-31-313, MCA; IMP:
					 15-1-601,
					 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 42.26.249 - NUMERATOR OF RECEIPTS FACTOR - LICENSE OR LEASE OF INTANGIBLE PROPERTY

Current through Register Vol. 13, July 5, 2024
(1) General provisions.
(a) The receipts from the license of
				intangible property are in Montana if and to the extent the intangible property
				is used in Montana. In general, the term "use" is construed to refer to the
				location of the taxpayer's market for the use of the intangible property that
				is being licensed and is not to be construed to refer to the location of the
				property or payroll of the taxpayer. The provisions that apply to determine the
				location of the use of intangible property in the context of several specific
				types of licensing transactions are set forth in (2) through (5) below. For
				purposes of the provisions set forth in this rule, a lease of intangible
				property is to be treated the same as a license of intangible
				property.
(b) In general, a license
				of intangible property that conveys all substantial rights in that property is
				treated as a sale of intangible property for purposes of ARM 42.26.250. Note,
				however, that a sale or exchange of intangible property is treated as a license
				of that property where the receipts from the sale or exchange derive from
				payments that are contingent on the productivity, use, or disposition of the
				property.
(c) Intangible property
				licensed as part of the sale or lease of tangible property is treated as the
				sale or lease of tangible property.
(d) In any instance in which the taxpayer is
				not taxable in the state to which the receipts from the license of intangible
				property are assigned, the receipts are excluded from the denominator of the
				taxpayer's receipts factor.
(e)
				Nothing in this rule shall be construed to allow or require inclusion of
				receipts in the receipts factor that are not included in the definition of
				"gross receipts" pursuant to ARM
				42.26.202, or related regulations,
				or that are excluded from the numerator and the denominator of the receipts
				factor pursuant to ARM 42.26.250(1)(d). To the extent that the transfer of
				either a security or business "goodwill" or similar intangible value,
				including, without limitation, "going concern value" or "workforce in place,"
				may be characterized as a license or lease of intangible property, receipts
				from such transaction shall be excluded from the numerator and denominator of
				the taxpayer's receipts factor.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.251 - RECEIPTS FACTOR IN GENERAL

Current through Register Vol. 13, July 5, 2024
(1) Section
				15-31-302, MCA, defines the term
				"receipts" to mean all gross receipts of the taxpayer not allocated under
				15-31-304, MCA. Thus, for the
				purposes of the receipts factor of the apportionment formula for each trade or
				business of the taxpayer, the term "receipts" means all gross receipts derived
				by a taxpayer from transactions and activity in the regular course of such
				trade or business.
(2) The
				following are procedures for determining "receipts" in various situations:
(a) In the case of a taxpayer engaged in
				manufacturing and selling or purchasing and reselling goods or products,
				"receipts" includes all gross receipts from the sales of such goods or products
				(or other property of a kind which would properly be included in the inventory
				of the taxpayer if on hand at the close of the tax period) held by the taxpayer
				primarily for sale to customers in the ordinary course of its trade or
				business. Gross receipts for this purpose means gross sales, less returns and
				allowances and includes all interest income, service charges, carrying charges,
				or time-price differential charges incidental to such sales. Federal and state
				excise taxes (including sales taxes) shall be included as part of such receipts
				if such taxes are passed on to the buyer or included as part of the selling
				price of the product.
(b) In the
				case of cost plus fixed fee contracts, such as the operation of a
				government-owned plant for a fee, "receipts" includes the entire reimbursed
				cost, plus the fee.
(c) In the case
				of a taxpayer engaged in providing services, such as the operation of an
				advertising agency or the performance of equipment service contracts or
				research and development contracts, "receipts" includes the gross receipts from
				the performance of such services including fees, commissions, and similar
				items.
(d) In the case of a
				taxpayer engaged in renting real or tangible property, "receipts" includes the
				gross receipts from the rental, lease, or licensing the use of the
				property.
(e) In the case of a
				taxpayer engaged in the sale, assignment, or licensing of intangible personal
				property such as patents and copyrights, "receipts" includes the gross receipts
				therefrom.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.252 - CONSISTENCY IN REPORTING WITH RESPECT TO RECEIPTS

Current through Register Vol. 13, July 5, 2024
(1) In filing returns with this state, if the
				taxpayer departs from or modifies the basis for excluding or including gross
				receipts in the receipts factor used in returns for prior years, the taxpayer
				shall disclose in the return for the current year the nature and extent of the
				modification.
(2) If the returns or
				reports filed by the taxpayer with all states to which the taxpayer reports
				under Article IV of the Multistate Tax Compact or the Uniform Division of
				Income for Tax Purposes Act are not uniform in the inclusion or exclusion of
				gross receipts, the taxpayer shall disclose in its return to this state the
				nature and extent of the variance.
AUTH:
					 15-1-201,
					 15-31-313,
					 15-31-501, MCA; IMP:
					 15-1-601, 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 42.26.253 - DENOMINATOR OF RECEIPTS FACTOR

Current through Register Vol. 13, July 5, 2024
(1) The
				denominator of the receipts factor shall include the total gross receipts
				derived by the taxpayer from transactions and activity in the regular course of
				its trade or business, except receipts excluded under ARM
				42.26.263.
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,
					 15-31-321,
					 15-31-322,
					 15-31-323,
					 15-31-324,
					 15-31-325,
					 15-31-326,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.254 - NUMERATOR OF RECEIPTS FACTOR

Current through Register Vol. 13, July 5, 2024
(1) The
				numerator of the receipts factor shall include gross receipts attributable to
				this state and derived by the taxpayer from transactions and activity in the
				regular course of its trade or business. All interest income, service charges,
				carrying charges, or time-price differential charges incidental to such gross
				receipts shall be included regardless of the place where the accounting records
				are maintained or the location of the contract or other evidence of
				indebtedness.
(2) Intercompany
				revenues between members of the unitary group that are attributable to this
				state shall be excluded from the numerator of the receipts factor.
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,
					 15-31-321,
					 15-31-322,
					 15-31-323,
					 15-31-324,
					 15-31-325,
					 15-31-326,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.255 - SALES OF TANGIBLE PERSONAL PROPERTY

Current through Register Vol. 13, July 5, 2024
(1)
				Gross receipts from the sales of tangible personal property (except sales to
				the United States government as outlined in ARM
				42.26.256 ) are in this state:
(a) if the property is delivered or shipped
				to a purchaser within this state regardless of the f.o.b. point or other
				conditions of sale; or
(b)  if the
				property is shipped from an office, store, warehouse, factory, or other place
				of storage in this state and the taxpayer is not taxable in the state of the
				purchaser.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.256 - SALES OF TANGIBLE PERSONAL PROPERTY TO FEDERAL GOVERNMENT

Current through Register Vol. 13, July 5, 2024
(1) Gross receipts from the sales of tangible
				personal property to the United States government are in this state if the
				property is shipped from an office, store, warehouse, factory, or other place
				of storage in this state.
(2) For
				the purposes of this rule, only sales for which the United States government
				makes direct payment to the seller pursuant to the terms of its contract
				constitute sales to the United States government. Thus, as a general rule,
				sales by a sub-contractor to the prime contractor, the party to the contract
				with the United States government, do not constitute sales to the United States
				government.
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,
					 15-31-321,
					 15-31-322,
					 15-31-323,
					 15-31-324,
					 15-31-325,
					 15-31-326,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.257 - SALES OTHER THAN SALES OF TANGIBLE PERSONAL PROPERTY - COSTS OF PERFORMANCE

Current through Register Vol. 13, July 5, 2024
(1) Section
				15-31-311, MCA, provides for the
				inclusion in the numerator of the receipts factor of gross receipts from
				transactions other than sales of tangible personal property (including
				transactions with the United States government). Under this section, gross
				receipts are attributed to this state if the income-producing activity, which
				gave rise to the receipts, is performed wholly within this state. Also, gross
				receipts are attributed to this state if, with respect to a particular item of
				income, the income-producing activity is performed within and without this
				state but the greater proportion of the income-producing activity is performed
				in this state, based on costs of performance.
(2) The mere holding of intangible personal
				property is not, of itself, an income-producing activity.
(3) Receipts (other than from sales of
				tangible personal property) in respect to a particular income-producing
				activity are in this state if:
(a) the
				income-producing activity is performed wholly within this state; or
(b) the income-producing activity is
				performed both in and outside this state and a greater proportion of the
				income-producing activity is performed in this state than in any other state,
				based on costs of performance.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.258 - SALES FACTOR DEFINITIONS (REPEALED)

Current through Register Vol. 13, July 5, 2024
Sec.
					 15-31-313 and
					 15-31-501, MCA; IMP, Sec.
					 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 42.26.259 - SALE OF TANGIBLE AND INTANGIBLE PROPERTY COMPUTATION OF THE RECEIPTS FACTOR

Current through Register Vol. 13, July 5, 2024
(1) Refer to ARM
				42.26.202 for definitions
				applicable to this rule.
(2) If a
				taxpayer derives receipts from the sale of tangible property or the sale or
				redemption of intangible property not held primarily for sale to customers in
				the ordinary course of its trade or business such receipts will constitute
				sales for inclusion in the receipts factor to the following extent:
(a) Only the net receipts from the sale of
				tangible or the sale or redemption of intangible property shall be included in
				the receipts factor.
(b) In the
				case where the taxpayer has multiple transactions from the sale of tangible or
				the sale or redemption of intangible property only the net gains in excess of
				net losses will be included in the receipts factor.
(c) Before the net receipts from the sale of
				tangible property or the sale or redemption of intangible property may be
				included in the receipts factor the sales transactions must constitute
				apportionable income to the taxpayer.