West Virginia Code of State Rules › Agency 110 - Tax › Title 110 - LEGISLATIVE RULE STATE TAX DEPARTMENT › Series 110-24 - Corporation Net Income Tax › Section 110-24-7 - Allocation and Apportionment for tax years ending prior to January 1, 2022

Current through Register Vol. XLI, No. 28, July 12, 2024
7.1. Net rents and
				royalties from tangible personal property are allocable to this state in
				accordance with W. Va. Code §
									11-24-7,
				if they are nonbusiness income.
7.2. The extent of use of tangible personal
				property in a state is determined by multiplying the nonbusiness rents and
				royalties by a fraction, the numerator of which is the number of days of
				physical location of the property in the state during the rental or royalty
				period in the taxable year and the denominator of which is the number of days
				of physical location of the property everywhere during all rental or royalty
				periods in the taxable year. If the physical location of the property during
				the rental or royalty period is unknown or unascertainable by the taxpayer,
				tangible personal property is used in the state in which the property was
				located at the time the rental or royalty payer obtained possession.
7.2.a. If the property is in this State for
				any part of a day, that time shall be counted as a full day.
Examples.
7.2.b. Corporation A was formed in Ohio and
				has its main offices there. Corporation A owns an apartment complex in West
				Virginia and leases computers to users located in West Virginia. The
				nonbusiness net rental income from the rental of the apartment complex is
				allocated to West Virginia for purposes of the West Virginia Corporation Net
				Income Tax. Likewise, the nonbusiness net rental income received by Corporation
				A as a lessor of computers in this State is allocated to this State.
7.2.c. Corporation Z was formed in State X
				and has its commercial domicile in the State of West Virginia. Corporation Z
				leases tangible personal property to customers in State K and derives
				nonbusiness income from that activity. State K has no corporation net income
				tax. The net receipts from leasing tangible personal property in State K are
				allocated entirely to the State of West Virginia.
7.2.d. Corporation Alpha, organized and
				headquartered in California, leases coal mining equipment in West Virginia.
				Alpha began leasing equipment in West Virginia on April 1 and is a calendar
				year taxpayer. The coal mining equipment was not in this State until April 1,
				the date the lease commenced. The property is leased in this State for 275 of
				the 365 days in the year. If rental income from the coal mining equipment
				located in the State of West Virginia is nonbusiness income, and if Alpha
				Corporation netted $15,000 for leasing this equipment for the entire year,
				Alpha would include in West Virginia income the following amount: 275/365 x
				$15,000 = $11,301.37.
7.2.d.1. If Alpha
				Corporation has adequate records to show the net rental income from the
				equipment while the equipment was leased in this State, then it may use the
				actual net rental income and not "apportion" its allocation of net rental
				income.