Rhode Island Code of Regulations › Title 280 - Department of Revenue › Chapter 20 - Division of Taxation › Subchapter 25 - Business Corporation Tax › Part 9 - Apportionment of Net Income (280-RICR-20-25-9) › Section 280-RICR-20-25-9.5 - Definitions

Current through June 14, 2024
A. "Apportionment" means the formula used to
				 determine the amount of income that is attributable to Rhode Island by a
				 combined group or any other taxpayer.
B. "Arithmetical mean" means the sum of the
				 factors available to the taxpayer divided by the number of fractions used.
C. "Billing address" means the
				 location indicated in the books and records of the taxpayer as the primary
				 mailing address relating to a customer's account as of the time of the
				 transaction as kept in good faith in the normal course of business and not for
				 tax avoidance purposes.
D.
				 "Broadcast customer" means a person who has a direct contractual relationship
				 with a broadcaster from whom the broadcaster derives gross receipts. The term
				 "broadcast customer" includes but is not limited to an advertiser or
				 licensee.
E. "Broadcaster" means a
				 taxpayer that is engaged in the business of broadcasting, and includes a
				 television network, a cable program network, and a television distribution
				 company. The term "broadcaster" does not include a Platform Distribution
				 Company such as a cable system operator or a direct broadcast satellite system
				 operator.
F. "Broadcasting" means
				 the transmission of film programming by an electronic or other signal conducted
				 by microwaves, wires, lines, coaxial cables, wave guides, fiber optics,
				 satellite transmissions, or through any other means of communication directly
				 or indirectly to viewers and listeners.
G. "Business customer" means a customer that
				 is a business operating in any form, including an individual that operates a
				 business through the form of a sole proprietorship. Sales to a non-profit
				 organization, to a trust, to the United States Government, to any foreign,
				 state, or local government, or to any agency or instrumentality of such
				 government shall be treated as sales to a business customer and shall be
				 assigned consistent with the rules that apply to receipts from such sales.
H. "C corporation" means a
				 corporation organized under subchapter C of the Internal Revenue Code, as
				 defined in Section 1504 of that subchapter. For the purposes of this
				 Regulation, the term includes those entities treated as C corporations for
				 federal tax purposes, so long as such entities would qualify as a corporation,
				 as defined in this Regulation.
I.
				 "Combined group" means a group of two or more corporations in which more than
				 fifty percent (50%) of the voting stock of each member corporation is directly
				 or indirectly owned by a common owner or owners, either corporate or
				 non-corporate, or by one or more of the member corporations, and that are
				 engaged in a unitary business.
J.
				 "Commercial domicile" has the meaning set forth in R.I. Gen. Laws §
										44-14-14.2.
K. "Common ownership" means more than fifty
				 percent (50%) of the voting control of each member of the group is directly or
				 indirectly owned by a common owner or owners, either corporate or
				 non-corporate, whether or not the owner or owners are members of the combined
				 group.
L. "Corporation" has the
				 meaning set forth in R.I. Gen. Laws §
										44-11-1(4),
				 and for purposes of mandatory unitary combined reporting under the Rhode Island
				 General Laws, includes an LLC, partnership, or other entity electing to be
				 taxed as a corporation for federal tax purposes. Although a partnership or
				 other pass-through entity may not always be considered a corporation includible
				 in the combined group on an entity basis as a member, when a partnership or
				 other pass-through entity is directly or indirectly held by a corporation, the
				 business conducted by such a partnership or pass-through entity is considered
				 the business of the corporation to the extent of the corporation's distributive
				 share of the partnership or pass-through entity net income.
M. "Cost of performance sourcing" means the
				 sourcing method used for gross receipts from transactions other than sales of
				 tangible personal property under the three-factor apportionment formula set
				 forth in §
										9.9     of this Part.
N. "Division of Taxation" means the Rhode
				 Island Department of Revenue, Division of Taxation. The Division of Taxation
				 may also be referred to as the "Division" or the "Tax Division."
O. "Documentary evidence" means journals,
				 books of account, invoices, expense reports, or other records maintained in the
				 regular course of business, or any other records required to be maintained for
				 legal or accounting purposes.
P.
				 "Film programming" means one (1) or more performances, events, or productions
				 (or segments of performances, events, or productions) intended to be
				 distributed for visual and auditory perception, including but not limited to
				 news, entertainment, sporting events, plays, stories, or other literary,
				 commercial, educational, or artistic works.
Q. "Income-producing activity" means, for
				 each separate item of income, the transactions and activity directly engaged by
				 the taxpayer for the ultimate purpose of obtaining profit or gain. For
				 apportionment purposes, such activity does not include transactions and
				 activities performed on behalf of a taxpayer, such as those conducted on the
				 taxpayer's behalf by an independent contractor. Income-producing activity
				 includes, but is not limited to:
1. The
				 rendering of personal services by employees or the utilization of tangible and
				 intangible property by the taxpayer in performing a service;
2. The sale, rental, leasing, licensing the
				 use of, or other use of real property; and;
3. The rental, leasing, licensing the use of,
				 or other use of tangible or intangible personal property.