43-1138

43-1138. Patent and copyright
royalties

A. Patent and copyright royalties are allocable to this state either:

1. If and to the extent that the patent or copyright is utilized by the payer in
this state.

2. If and to the extent that the patent or copyright is utilized by the payer in a
state in which the taxpayer is not taxable and the taxpayer's commercial domicile is in
this state.

B. A patent is utilized in a state to the extent that it is employed in production,
fabrication, manufacturing or other processing in the state or to the extent that a
patented product is produced in the state. If the basis of receipts from patent royalties
does not permit allocation to states or if the accounting procedures do not reflect
states of utilization, the patent is utilized in the state in which the taxpayer's
commercial domicile is located.

C. A copyright is utilized in a state to the extent that printing or other
publication originates in the state. If the basis of receipts from copyright royalties
does not permit allocation to states or if the accounting procedures do not reflect
states of utilization, the copyright is utilized in the state in which the taxpayer's
commercial domicile is located.