§ 44-14-14.4 Property factor. – (a) General. The property factor is a fraction, the numerator of whichis the average value of real property and tangible personal property rented tothe taxpayer that is located or used within this state during the taxable year,the average value of the taxpayer's real and tangible personal property ownedthat is located or used within this state during the taxable year, and theaverage value of the taxpayer's loans and credit card receivables that arelocated within this state during the taxable year, and the denominator of whichis the average value of all the property located or used within and outside ofthis state during the taxable year.
(b) Property included. The property factor shallinclude only property the income or expenses of which are included (or wouldhave been included if not fully depreciated or expensed, or depreciated orexpensed to a nominal amount) in the computation of the apportionable incomebase for the taxable year.
(1) The value of real property and tangible personal propertyowned by the taxpayer is the original cost or other basis of the property forfederal income tax purposes without regard to depletion, depreciation oramortization.
(2) Loans are valued at their outstanding principal balance,without regard to any reserve for bad debts. If a loan is charged-off in wholeor in part for federal income tax purposes, the portion of the loan charged-offis not outstanding. A specifically allocated reserve established pursuant toregulatory or financial guideline which is treated as charged-off for federalincome tax purposes shall be treated as charged-off for purposes of§§ 44-14-14.1 – 44-14-14.5.
(3) Credit card receivables are valued at their outstandingprincipal balance, without regard to any reserve for bad debts. If a creditcard receivable is charged-off in whole or in part for federal income taxpurposes. The portion of the receivable charged-off is not outstanding.
(d) Average value of property owned by the taxpayer.The average value of property owned by the taxpayer is computed on an annualbasis by adding the value of the property on the first day of the taxable yearand the value on the last day of the taxable year and dividing the sum by two.If averaging on this basis does not properly reflect average value, the taxadministrator may require averaging on a more frequent basis. When averaging ona more frequent basis is required by the tax administrator or is elected by thetaxpayer, the same method of valuation must be used consistently by thetaxpayer with respect to property within and outside of this state and on allsubsequent returns unless the taxpayer receives prior permission from the taxadministrator or the tax administrator requires a different method ofdetermining average value.
(1) The average value of real property and tangible personalproperty that the taxpayer has rented from another and which is not treated asproperty owned by the taxpayer for federal income tax purposes, shall bedetermined annually by multiplying the gross rents payable during the taxableyear by eight.
(2) Where the use of the general method described in thissubsection results in inaccurate valuations of rented property, any othermethod, which properly reflects the value may be adopted by the taxadministrator or by the taxpayer when approved, in writing, by theadministrator. Once approved, this other method of valuation must be used onall subsequent returns unless the taxpayer receives prior approval from the taxadministrator or the tax administrator requires a different method of valuation.
(1) Except as described in subdivision (2) of thissubsection, real property and tangible personal property owned by or rented tothe taxpayer is considered to be located within this state if it is physicallylocated, situated or used within this state.
(2) Transportation property is included in the numerator ofthe property factor to the extent that the property is used in this state. Theextent an aircraft will be deemed to be used in this state and the amount ofvalue that is to be included in the numerator of this state's property factoris determined by multiplying the average value of the aircraft by a fraction,the numerator of which is the number of landings of the aircraft in this stateand the denominator of which is the total number of landings of the aircrafteverywhere. If the extent of the use of any transportation property within thisstate cannot be determined, then the property will be deemed to be used whollyin the state in which the property has its principal base of operations. Amotor vehicle will be deemed to be used wholly in the state in which it isregistered.
(1) A loan is considered to be located within this state ifit is properly assigned to a regular place of business of the taxpayer withinthis state.
(ii) A loan is properly assigned to the regular place ofbusiness with which it has a preponderance of substantive contacts. A loanassigned by the taxpayer to a regular place of business outside of the stateshall be presumed to have been properly assigned if:
(A) The taxpayer has assigned, in the regular course of itsbusiness, this loan on its records to a regular place of business consistentwith federal or state regulatory requirements;
(B) The assignment on its records is based upon substantivecontacts of the loan to the regular place of business; and
(C) The taxpayer uses the records reflecting assignment ofloans for the filing of all state and local tax returns for which an assignmentof loans to a regular place of business is required.
(iii) The presumption of proper assignment of a loan providedin subparagraph (ii)(B) of this subdivision may be rebutted upon a showing bythe tax administrator, supported by a preponderance of the evidence, that thepreponderance of substantive contacts regarding the loan did not occur at theregular place of business to which it was assigned on the taxpayer's records.When the presumption has been rebutted, the loan shall then be located withinthis state if:
(A) The taxpayer had a regular place of business within thisstate at the time the loan was made; and
(B) The taxpayer fails to show, by a preponderance of theevidence, that the preponderance of substantive contacts regarding the loan didnot occur within this state.
(2) In the case of a loan which is assigned by the taxpayerto a place outside of this state which is not a regular place of business, itshall be presumed, subject to rebuttal by the taxpayer on a showing supportedby the preponderance of evidence, that the preponderance of substantivecontacts regarding the loan occurred within this state if, at the time the loanwas made, the taxpayer's commercial domicile, as defined by §44-14-14.2(c) was within this state.
(3) To determine the state in which the preponderance ofsubstantive contacts relating to a loan have occurred, the facts andcircumstances regarding the loan at issue shall be reviewed on a case-by-casebasis and consideration shall be given to the activities as the solicitation,investigation, negotiation, approval and administration of the loan. The terms"solicitation", "investigation", "negotiation", "approval", and"administration" are defined as follows:
(i) Solicitation. Solicitation is either active orpassive. Active solicitation occurs when an employee of the taxpayer initiatesthe contact with the customer. The activity is located at the regular place ofbusiness with which the taxpayer's employee is regularly connected or workingout of, regardless of where the services of the employee were actuallyperformed. Passive solicitation occurs when the customer initiates the contactwith the taxpayer. If the customer's initial contact was not at a regular placeof business of the taxpayer, the regular place of business, if any, where thepassive solicitation occurred is determined by the facts in each case.
(ii) Investigation. Investigation is the procedurewhere employees of the taxpayer determine the credit-worthiness of the customeras well as the degree of risk involved in making a particular agreement. Theactivity is located at the regular place of business with which the taxpayer'semployees are regularly connected or working out of, regardless of where theservices of the employees were actually performed.
(iii) Negotiation. Negotiation is the procedure whereemployees of the taxpayer and its customer determine the terms of the agreement(e.g., the amount, duration, interest rate, frequency of repayment, currencydenomination and security required). The activity is located at the regularplace of business with which the taxpayer's employees are regularly connectedor working out of, regardless of where the services of the employees wereactually performed.
(iv) Approval. Approval is the procedure whereemployees or the board of directors of the taxpayer make the finaldetermination whether to enter into the agreement. The activity is located atthe regular place of business with which the taxpayer's employees are regularlyconnected or working out of, regardless of where the services of the employeeswere actually performed. If the board of directors makes the finaldetermination, the activity is located at the commercial domicile of thetaxpayer.
(v) Administration. Administration is the process ofmanaging the account. This process includes bookkeeping, collecting thepayments, corresponding with the customer, reporting to management regardingthe status of the agreement and proceeding against the borrower or the securityinterest if the borrower is in default. The activity is located at the regularplace of business that oversees this activity.
(h) Location of credit card receivables. For purposesof determining the location of credit card receivables, credit card receivablesshall be treated as loans and shall be subject to the provisions of subsection(g) of this section.
(i) Period for which property assigned loan remainsassigned. A loan that has been properly assigned to a state shall, absentany change of material fact, remain assigned to the state for the length of theoriginal term of the loan. Thereafter, the loan may be properly assigned toanother state if the loan has a preponderance of substantive contact to aregular place of business there.
§ 44-14-14.4 Property factor. – (a) General. The property factor is a fraction, the numerator of whichis the average value of real property and tangible personal property rented tothe taxpayer that is located or used within this state during the taxable year,the average value of the taxpayer's real and tangible personal property ownedthat is located or used within this state during the taxable year, and theaverage value of the taxpayer's loans and credit card receivables that arelocated within this state during the taxable year, and the denominator of whichis the average value of all the property located or used within and outside ofthis state during the taxable year.
(b) Property included. The property factor shallinclude only property the income or expenses of which are included (or wouldhave been included if not fully depreciated or expensed, or depreciated orexpensed to a nominal amount) in the computation of the apportionable incomebase for the taxable year.
(1) The value of real property and tangible personal propertyowned by the taxpayer is the original cost or other basis of the property forfederal income tax purposes without regard to depletion, depreciation oramortization.
(2) Loans are valued at their outstanding principal balance,without regard to any reserve for bad debts. If a loan is charged-off in wholeor in part for federal income tax purposes, the portion of the loan charged-offis not outstanding. A specifically allocated reserve established pursuant toregulatory or financial guideline which is treated as charged-off for federalincome tax purposes shall be treated as charged-off for purposes of§§ 44-14-14.1 – 44-14-14.5.
(3) Credit card receivables are valued at their outstandingprincipal balance, without regard to any reserve for bad debts. If a creditcard receivable is charged-off in whole or in part for federal income taxpurposes. The portion of the receivable charged-off is not outstanding.
(d) Average value of property owned by the taxpayer.The average value of property owned by the taxpayer is computed on an annualbasis by adding the value of the property on the first day of the taxable yearand the value on the last day of the taxable year and dividing the sum by two.If averaging on this basis does not properly reflect average value, the taxadministrator may require averaging on a more frequent basis. When averaging ona more frequent basis is required by the tax administrator or is elected by thetaxpayer, the same method of valuation must be used consistently by thetaxpayer with respect to property within and outside of this state and on allsubsequent returns unless the taxpayer receives prior permission from the taxadministrator or the tax administrator requires a different method ofdetermining average value.
(1) The average value of real property and tangible personalproperty that the taxpayer has rented from another and which is not treated asproperty owned by the taxpayer for federal income tax purposes, shall bedetermined annually by multiplying the gross rents payable during the taxableyear by eight.
(2) Where the use of the general method described in thissubsection results in inaccurate valuations of rented property, any othermethod, which properly reflects the value may be adopted by the taxadministrator or by the taxpayer when approved, in writing, by theadministrator. Once approved, this other method of valuation must be used onall subsequent returns unless the taxpayer receives prior approval from the taxadministrator or the tax administrator requires a different method of valuation.
(1) Except as described in subdivision (2) of thissubsection, real property and tangible personal property owned by or rented tothe taxpayer is considered to be located within this state if it is physicallylocated, situated or used within this state.
(2) Transportation property is included in the numerator ofthe property factor to the extent that the property is used in this state. Theextent an aircraft will be deemed to be used in this state and the amount ofvalue that is to be included in the numerator of this state's property factoris determined by multiplying the average value of the aircraft by a fraction,the numerator of which is the number of landings of the aircraft in this stateand the denominator of which is the total number of landings of the aircrafteverywhere. If the extent of the use of any transportation property within thisstate cannot be determined, then the property will be deemed to be used whollyin the state in which the property has its principal base of operations. Amotor vehicle will be deemed to be used wholly in the state in which it isregistered.
(1) A loan is considered to be located within this state ifit is properly assigned to a regular place of business of the taxpayer withinthis state.
(ii) A loan is properly assigned to the regular place ofbusiness with which it has a preponderance of substantive contacts. A loanassigned by the taxpayer to a regular place of business outside of the stateshall be presumed to have been properly assigned if:
(A) The taxpayer has assigned, in the regular course of itsbusiness, this loan on its records to a regular place of business consistentwith federal or state regulatory requirements;
(B) The assignment on its records is based upon substantivecontacts of the loan to the regular place of business; and
(C) The taxpayer uses the records reflecting assignment ofloans for the filing of all state and local tax returns for which an assignmentof loans to a regular place of business is required.
(iii) The presumption of proper assignment of a loan providedin subparagraph (ii)(B) of this subdivision may be rebutted upon a showing bythe tax administrator, supported by a preponderance of the evidence, that thepreponderance of substantive contacts regarding the loan did not occur at theregular place of business to which it was assigned on the taxpayer's records.When the presumption has been rebutted, the loan shall then be located withinthis state if:
(A) The taxpayer had a regular place of business within thisstate at the time the loan was made; and
(B) The taxpayer fails to show, by a preponderance of theevidence, that the preponderance of substantive contacts regarding the loan didnot occur within this state.
(2) In the case of a loan which is assigned by the taxpayerto a place outside of this state which is not a regular place of business, itshall be presumed, subject to rebuttal by the taxpayer on a showing supportedby the preponderance of evidence, that the preponderance of substantivecontacts regarding the loan occurred within this state if, at the time the loanwas made, the taxpayer's commercial domicile, as defined by §44-14-14.2(c) was within this state.
(3) To determine the state in which the preponderance ofsubstantive contacts relating to a loan have occurred, the facts andcircumstances regarding the loan at issue shall be reviewed on a case-by-casebasis and consideration shall be given to the activities as the solicitation,investigation, negotiation, approval and administration of the loan. The terms"solicitation", "investigation", "negotiation", "approval", and"administration" are defined as follows:
(i) Solicitation. Solicitation is either active orpassive. Active solicitation occurs when an employee of the taxpayer initiatesthe contact with the customer. The activity is located at the regular place ofbusiness with which the taxpayer's employee is regularly connected or workingout of, regardless of where the services of the employee were actuallyperformed. Passive solicitation occurs when the customer initiates the contactwith the taxpayer. If the customer's initial contact was not at a regular placeof business of the taxpayer, the regular place of business, if any, where thepassive solicitation occurred is determined by the facts in each case.
(ii) Investigation. Investigation is the procedurewhere employees of the taxpayer determine the credit-worthiness of the customeras well as the degree of risk involved in making a particular agreement. Theactivity is located at the regular place of business with which the taxpayer'semployees are regularly connected or working out of, regardless of where theservices of the employees were actually performed.
(iii) Negotiation. Negotiation is the procedure whereemployees of the taxpayer and its customer determine the terms of the agreement(e.g., the amount, duration, interest rate, frequency of repayment, currencydenomination and security required). The activity is located at the regularplace of business with which the taxpayer's employees are regularly connectedor working out of, regardless of where the services of the employees wereactually performed.
(iv) Approval. Approval is the procedure whereemployees or the board of directors of the taxpayer make the finaldetermination whether to enter into the agreement. The activity is located atthe regular place of business with which the taxpayer's employees are regularlyconnected or working out of, regardless of where the services of the employeeswere actually performed. If the board of directors makes the finaldetermination, the activity is located at the commercial domicile of thetaxpayer.
(v) Administration. Administration is the process ofmanaging the account. This process includes bookkeeping, collecting thepayments, corresponding with the customer, reporting to management regardingthe status of the agreement and proceeding against the borrower or the securityinterest if the borrower is in default. The activity is located at the regularplace of business that oversees this activity.
(h) Location of credit card receivables. For purposesof determining the location of credit card receivables, credit card receivablesshall be treated as loans and shall be subject to the provisions of subsection(g) of this section.
(i) Period for which property assigned loan remainsassigned. A loan that has been properly assigned to a state shall, absentany change of material fact, remain assigned to the state for the length of theoriginal term of the loan. Thereafter, the loan may be properly assigned toanother state if the loan has a preponderance of substantive contact to aregular place of business there.
§ 44-14-14.4 Property factor. – (a) General. The property factor is a fraction, the numerator of whichis the average value of real property and tangible personal property rented tothe taxpayer that is located or used within this state during the taxable year,the average value of the taxpayer's real and tangible personal property ownedthat is located or used within this state during the taxable year, and theaverage value of the taxpayer's loans and credit card receivables that arelocated within this state during the taxable year, and the denominator of whichis the average value of all the property located or used within and outside ofthis state during the taxable year.
(b) Property included. The property factor shallinclude only property the income or expenses of which are included (or wouldhave been included if not fully depreciated or expensed, or depreciated orexpensed to a nominal amount) in the computation of the apportionable incomebase for the taxable year.
(1) The value of real property and tangible personal propertyowned by the taxpayer is the original cost or other basis of the property forfederal income tax purposes without regard to depletion, depreciation oramortization.
(2) Loans are valued at their outstanding principal balance,without regard to any reserve for bad debts. If a loan is charged-off in wholeor in part for federal income tax purposes, the portion of the loan charged-offis not outstanding. A specifically allocated reserve established pursuant toregulatory or financial guideline which is treated as charged-off for federalincome tax purposes shall be treated as charged-off for purposes of§§ 44-14-14.1 – 44-14-14.5.
(3) Credit card receivables are valued at their outstandingprincipal balance, without regard to any reserve for bad debts. If a creditcard receivable is charged-off in whole or in part for federal income taxpurposes. The portion of the receivable charged-off is not outstanding.
(d) Average value of property owned by the taxpayer.The average value of property owned by the taxpayer is computed on an annualbasis by adding the value of the property on the first day of the taxable yearand the value on the last day of the taxable year and dividing the sum by two.If averaging on this basis does not properly reflect average value, the taxadministrator may require averaging on a more frequent basis. When averaging ona more frequent basis is required by the tax administrator or is elected by thetaxpayer, the same method of valuation must be used consistently by thetaxpayer with respect to property within and outside of this state and on allsubsequent returns unless the taxpayer receives prior permission from the taxadministrator or the tax administrator requires a different method ofdetermining average value.
(1) The average value of real property and tangible personalproperty that the taxpayer has rented from another and which is not treated asproperty owned by the taxpayer for federal income tax purposes, shall bedetermined annually by multiplying the gross rents payable during the taxableyear by eight.
(2) Where the use of the general method described in thissubsection results in inaccurate valuations of rented property, any othermethod, which properly reflects the value may be adopted by the taxadministrator or by the taxpayer when approved, in writing, by theadministrator. Once approved, this other method of valuation must be used onall subsequent returns unless the taxpayer receives prior approval from the taxadministrator or the tax administrator requires a different method of valuation.
(1) Except as described in subdivision (2) of thissubsection, real property and tangible personal property owned by or rented tothe taxpayer is considered to be located within this state if it is physicallylocated, situated or used within this state.
(2) Transportation property is included in the numerator ofthe property factor to the extent that the property is used in this state. Theextent an aircraft will be deemed to be used in this state and the amount ofvalue that is to be included in the numerator of this state's property factoris determined by multiplying the average value of the aircraft by a fraction,the numerator of which is the number of landings of the aircraft in this stateand the denominator of which is the total number of landings of the aircrafteverywhere. If the extent of the use of any transportation property within thisstate cannot be determined, then the property will be deemed to be used whollyin the state in which the property has its principal base of operations. Amotor vehicle will be deemed to be used wholly in the state in which it isregistered.
(1) A loan is considered to be located within this state ifit is properly assigned to a regular place of business of the taxpayer withinthis state.
(ii) A loan is properly assigned to the regular place ofbusiness with which it has a preponderance of substantive contacts. A loanassigned by the taxpayer to a regular place of business outside of the stateshall be presumed to have been properly assigned if:
(A) The taxpayer has assigned, in the regular course of itsbusiness, this loan on its records to a regular place of business consistentwith federal or state regulatory requirements;
(B) The assignment on its records is based upon substantivecontacts of the loan to the regular place of business; and
(C) The taxpayer uses the records reflecting assignment ofloans for the filing of all state and local tax returns for which an assignmentof loans to a regular place of business is required.
(iii) The presumption of proper assignment of a loan providedin subparagraph (ii)(B) of this subdivision may be rebutted upon a showing bythe tax administrator, supported by a preponderance of the evidence, that thepreponderance of substantive contacts regarding the loan did not occur at theregular place of business to which it was assigned on the taxpayer's records.When the presumption has been rebutted, the loan shall then be located withinthis state if:
(A) The taxpayer had a regular place of business within thisstate at the time the loan was made; and
(B) The taxpayer fails to show, by a preponderance of theevidence, that the preponderance of substantive contacts regarding the loan didnot occur within this state.
(2) In the case of a loan which is assigned by the taxpayerto a place outside of this state which is not a regular place of business, itshall be presumed, subject to rebuttal by the taxpayer on a showing supportedby the preponderance of evidence, that the preponderance of substantivecontacts regarding the loan occurred within this state if, at the time the loanwas made, the taxpayer's commercial domicile, as defined by §44-14-14.2(c) was within this state.
(3) To determine the state in which the preponderance ofsubstantive contacts relating to a loan have occurred, the facts andcircumstances regarding the loan at issue shall be reviewed on a case-by-casebasis and consideration shall be given to the activities as the solicitation,investigation, negotiation, approval and administration of the loan. The terms"solicitation", "investigation", "negotiation", "approval", and"administration" are defined as follows:
(i) Solicitation. Solicitation is either active orpassive. Active solicitation occurs when an employee of the taxpayer initiatesthe contact with the customer. The activity is located at the regular place ofbusiness with which the taxpayer's employee is regularly connected or workingout of, regardless of where the services of the employee were actuallyperformed. Passive solicitation occurs when the customer initiates the contactwith the taxpayer. If the customer's initial contact was not at a regular placeof business of the taxpayer, the regular place of business, if any, where thepassive solicitation occurred is determined by the facts in each case.
(ii) Investigation. Investigation is the procedurewhere employees of the taxpayer determine the credit-worthiness of the customeras well as the degree of risk involved in making a particular agreement. Theactivity is located at the regular place of business with which the taxpayer'semployees are regularly connected or working out of, regardless of where theservices of the employees were actually performed.
(iii) Negotiation. Negotiation is the procedure whereemployees of the taxpayer and its customer determine the terms of the agreement(e.g., the amount, duration, interest rate, frequency of repayment, currencydenomination and security required). The activity is located at the regularplace of business with which the taxpayer's employees are regularly connectedor working out of, regardless of where the services of the employees wereactually performed.
(iv) Approval. Approval is the procedure whereemployees or the board of directors of the taxpayer make the finaldetermination whether to enter into the agreement. The activity is located atthe regular place of business with which the taxpayer's employees are regularlyconnected or working out of, regardless of where the services of the employeeswere actually performed. If the board of directors makes the finaldetermination, the activity is located at the commercial domicile of thetaxpayer.
(v) Administration. Administration is the process ofmanaging the account. This process includes bookkeeping, collecting thepayments, corresponding with the customer, reporting to management regardingthe status of the agreement and proceeding against the borrower or the securityinterest if the borrower is in default. The activity is located at the regularplace of business that oversees this activity.
(h) Location of credit card receivables. For purposesof determining the location of credit card receivables, credit card receivablesshall be treated as loans and shall be subject to the provisions of subsection(g) of this section.
(i) Period for which property assigned loan remainsassigned. A loan that has been properly assigned to a state shall, absentany change of material fact, remain assigned to the state for the length of theoriginal term of the loan. Thereafter, the loan may be properly assigned toanother state if the loan has a preponderance of substantive contact to aregular place of business there.
