North Carolina Administrative Code › Title 17 - REVENUE › Chapter 05 - CORPORATE FRANCHISE, INCOME, AND INSURANCE TAXES › Subchapter D - ALTERNATIVE APPORTIONMENT METHOD › Section 05D .0109 - REQUEST FOR ALTERNATIVE APPORTIONMENT FORMULA

Current through Register Vol. 39, No. 2, July 15, 2024
The corporation shall file a request with the Secretary setting forth the
											  facts upon which the corporation's belief is based and its argument with respect to the application of the
											  allocation formula as set forth under G.S. 105-130.4(t1) or
											  G.S.
											  105-122(c1)(2). The request:
(1) shall be in a form generally used in legal drafting, setting forth
										sections containing the relevant facts, applicable statutory basis, and analysis supporting the
										request;
(2) shall be subscribed to by an officer of the
										corporation having knowledge of the facts;
(3) shall summarize
										the business operation of the corporation both within and without North Carolina;
(4) shall state whether the request is for income tax purposes, for
										franchise tax purposes, or for both;
(5) shall include the
										corporation's argument and contentions respecting the application of the formula prescribed by statute and
										the method of allocation requested referring to any legal references and other grounds upon which the
										corporation is basing its positions(s);
(6) shall disclose the
										alternative apportionment method of allocation and apportionment being requested and indicate the effect of
										its application on the corporation's tax liability together with any supporting and supplementing information
										that will enable the Secretary to fully understand and consider the method of allocation and apportionment
										requested;
(7) shall state the taxable periods to be
										reviewed;
(8) shall, for income tax purposes, include statements
										of income and expenses, showing the net income of the corporation subject to apportionment for each taxable
										period to be reviewed;
(9) shall, for franchise tax purposes,
										include statements showing the total net worth subject to apportionment for each taxable period to be
										reviewed;
(10) shall include schedules for each taxable period
										showing the computation of the property, payroll, and sales factors as prescribed by statute in the
										determination of the apportionment factor as required by
										G.S.
										105-130.4 and rules published by the Department of Revenue;
(11) shall, for a separate accounting method of reporting the corporation's
										business operations in this State, submit as support operating statements showing the results of the
										corporation's operations within North Carolina computed on the separate accounting basis together with
										similar statements showing the results of the corporation's operations outside North Carolina for each
										taxable period to be reviewed. A full explanation and description of the separate accounting method employed
										in the computation must accompany the statements. If there are items of expense or income that are indirectly
										attributed to the separated operations, the basis for apportioning such items must be disclosed. General
										overhead expenses must be separately stated in documentation and explained when any portion of this expense
										is allocated to the separate net income attributed to this State under the requested method;
(12) shall, for a separate accounting method, submit as support schedules
										reflecting the apportionment factors applicable to the operations that are conducted in whole or part in this
										State and the apportionment factor applicable to the business conducted outside of this State. The
										computations shall be made without regard to nexus requirements that would be considered if the operations
										were legal separate entities; and
(13) shall contain any other
										information relevant to the apportionment formula or the requested method of allocation that the corporation
										deems appropriate under the circumstances.
Authority
											  G.S.
											  105-122(c1)(2);
											  105-130.4(t1);
											  105-262;
Eff. February 1, 2008;
Pursuant to G.S.
											  150B-21.3A, rule is necessary without substantive public interest Eff.
											  August 19, 2017;
Amended Eff. May 1, 2018.