North Dakota Administrative Code › Title 81 - Tax Commissioner › Article 81-03 - Income Taxes and Privilege Taxes Based on Income › Chapter 81-03-05.2 - Water's Edge Method › Section 81-03-05.2-01 - Definitions

Current through Supplement No. 393, July, 2024
As used in these sections and for the administration of North
				  Dakota Century Code chapter 57-38.4, unless the context otherwise requires:
1. "Assets" means both tangible and intangible property
				  valued at original cost less depreciation, amortization, or depletion as
				  reflected on the corporation's balance sheet prepared according to generally
				  accepted accounting principles.
2. "Average of property and payroll" means average of
				  property and payroll as defined pursuant to chapter 81-03-09 and North Dakota
				  Century Code chapters 57-38.1 and 57-59.
3. "Commissioner" means the tax commissioner of the state of
				  North Dakota.
4. "80/20 corporation" means a corporation that:
a. Is incorporated in the United States.
b. Is eligible to be included in a federal consolidated
				  return as defined in subsection 5 of North Dakota Century Code section
				  57-38.4-01.
c. Has eighty percent or more of the average of its property
				  and payroll assigned to locations in foreign countries.
5. "Foreign corporation" means a corporation incorporated
				  outside the United States.
6. "Foreign country" means a country other than the United
				  States or a possession of the United States.
7. "Income from an 80/20 corporation" means net book income
				  for financial statement purposes. However, a corporation's net book income
				  cannot be offset by a net book loss from another 80/20 corporation.
8. "Net book income for financial statement purposes" as used
				  herein means the results of operations as determined using the accrual method
				  of accounting and generally accepted accounting principles as adopted by the
				  American institute of certified public accountants. If a corporation has more
				  than one financial statement, it must use the first statement in the following
				  priority:
a. Financial statements required to be filed with the
				  securities and exchange commission.
b. Financial statements audited by an independent certified
				  public accountant.
c. Income statements prepared for a nontax purpose required
				  to be provided to the federal government, state government, or a political
				  subdivision of state government.
d. Income statements prepared for credit purposes, for
				  reporting to stockholders or other owners, or for any other nontax purpose. An
				  unaudited report that is accompanied by an independent auditor's review report
				  has priority over another unaudited statement.
9. "New corporation" means a corporation that either has not
				  filed or was not required to file an income tax return after the 1979 tax year.
10. "Property, payroll, and sales" means property, payroll,
				  and sales as defined in 81-03-09 and North Dakota Century Code chapters 57-38.1
				  and 57-59.
11. "State" means each of the fifty states and the District
				  of Columbia.
12. "Taxpayer" means a corporation that is required to file
				  an income tax return in North Dakota.
13. "Transaction" means an event that causes a change in a
				  corporation's assets, liabilities, or owner's equity.
14. "United States" means the fifty states and the District
				  of Columbia.
General Authority: NDCC
					 57-38-56
Law Implemented: NDCC
					 57-38.4