| |
|
I. Apportionment Factors (G.S. 105-130.4)
- General Business Corporations
Corporations engaged in multistate business activity, other than
public utilities and excluded corporations, are required to apportion
to this State all business income by using a four-factor formula.
The apportionment formula consists of the sum of the property
factor, the payroll factor and twice the sales factor divided
by four (4).
- Property Factor (G.S. 105-130.4) (Section .0800)
- Property Factor-In General
The property factor includes all real and tangible personal
property owned or rented and used during the income year
to produce business income. The term "real and tangible
personal property" includes land, buildings, machinery,
stocks of goods, equipment and other real and tangible
personal property used in connection with the production
of business income but does not include coin or currency.
See definition of "business income".
Property used in connection with the production of nonbusiness
income which is allocated in accordance with subsections
(d) through (h) of the law is excluded from the factor.
Property used in connection with the production of both
business and nonbusiness income is included in the factor
only to the extent the property was used in connection
with the production of business income. The method of
determining that portion of the value to be included in
the factor will depend upon the facts of each case.
The property factor includes the average value of property
includible in the factor.
- Property Factor-Property Used for the Production
of Business Income
Property is included in the property factor if it is actually
used during the income year for the production of business
income. Property held as reserves or standby facilities
or property held as a reserve source of materials shall
be included in the factor. For example, a plant temporarily
idle or raw material reserves not currently being processed
are includible in the factor. Property that is permanently
idle or idle for the entire taxable year generally is
not included in the factor computation. Property or equipment
under construction during the income year (except inventoriable
goods in process) is excluded from the factor until such
property is actually used for the production of business
income. If the property is partially used for the production
of business income while under construction, the value
of the property to the extent used is included in the
property factor.
- Property Factor-Consistency in Reporting
The taxpayer must consistent in the valuation of property
and in excluding or including property in the property
factor in filing returns with this State. In the event
the taxpayer is not consistent in its reporting, it shall
disclose in its return to this State the nature and extent
of the inconsistency.
- Property Factor-Numerator
- The numerator of the property factor includes the
average value of the taxpayer's real and tangible
personal property owned or rented and used in this
State during the income year for the production of
business income.
- Property in transit between locations of the taxpayer
to which it belongs is considered to be at the destination
for purposes of the property factor. Property in transit
between a buyer and seller which is included by a
taxpayer in the denominator of its property factor
in accordance with its regular accounting practices
is included in the numerator according to the state
of destination.
- The value of mobile or movable property such as
construction equipment, trucks or leased electronic
equipment which are located within and without this
State during the income year is determined for purposes
of the numerator of the factor on the basis of total
time within the State during the income year. An automobile
assigned to a traveling employee is included in the
numerator of the factor of the state to which the
employee's compensation is assigned under the payroll
factor or in the numerator of the state in which the
automobile is licensed.
-
Property Factor-Valuation of Owned Property
- Property owned by the taxpayer is valued at its
original cost. "Original cost" of property
which has a basis other than zero for federal income
tax purposes equals the basis of the property for
federal income tax purposes at the time of acquisition
by the taxpayer and adjusted by subsequent capital
additions or improvements thereto and partial disposition
thereof, by reason of sale, exchange, abandonment,
or any other type of disposition.
"Original cost" of property that has a zero
basis for federal income tax purposes shall equal
the taxpayer's actual cost of the property at the
time of acquisition. If the actual cost is unknown,
the original cost shall equal the fair market value
of the property, or, at the option of the taxpayer,
eight times the net annual rental rate as described
in G.S. 105-130.4(j)(2). The valuation method chosen
by the taxpayer must be used consistently thereafter.
Example (1): Taxpayer acquired a factory building
in this State at a cost of $500,000 and years later,
expended $100,000 for major remodeling of the building.
Taxpayer files its return on the calendar year basis
and claims a depreciation deduction in the amount
of $22,000 on the building. The value of the building
includible in the numerator and denominator for the
property factor is $600,000 as the depreciation deduction
is not taken into account in determining the value
of the building for purposes of the factor.
Example (2): X corporation merges into Y corporation
in a tax-free reorganization under the Internal Revenue
Code. At the time of the merger, X corporation owns
a factory which X built years earlier at a cost of
$1,000,000. X has been depreciating the factory at
the rate of two percent per year, and its basis in
X's hands at the time of the merger is $600,000. Since
the property is acquired by Y in a transaction in
which, under the Internal Revenue Code, the basis
in Y's hands is the same as the basis in X's, Y includes
the property in Ys property factor at X's original
cost, without adjustment for depreciation, i.e., $1,000,000.
Example (3): Corporation Y acquires the assets of
corporation X in a liquidation by which Y is entitled
to use its stock cost as the basis of the X assets
under the Internal Revenue Code. Under these circumstances,
Ys cost of the assets is the purchase price of the
X stock, prorated over the X assets.
Example (4): Corporation X was deeded from local government
a potential manufacturing facility (cost unknown)
with a market value of $1,000,000 as an incentive
for locating in the State. Since the property would
have a zero basis for federal income tax purposes,
[Code 118(a)], Corporation X includes the $1,000,000
fair market value of the property in the computation
of its property factor, or at X's option may include
eight times the net annual rental rate of the property.
- Inventory of stock of goods is included in the factor
in accordance with the valuation method used for federal
income tax purposes, except when inventory is valued
by use of the LIFO method, actual cost of the FIFO
valuation method must be used.
- Property acquired by gift or inheritance is included
in the factor at its basis for determining depreciation
for federal income tax purposes.
- Property Factor-Rented Property
- Property rented by the taxpayer is valued at eight
times the net annual rent paid during the current
income year. Net annual rent is the total annual rent
paid by the taxpayer less amounts received from subrentals.
However, subrentals are not deducted when they constitute
business income. Rental values so determined are included
in the numerator and denominator and are averaged
by including such amounts at the beginning and at
the end of the income year.
Example (1): The taxpayer receives subrents from a
bakery concession in a food market operated by the
taxpayer. The subrents are business income and are
not deducted from rent paid by the taxpayer for the
food market.
Example (2): The taxpayer rents a 20-story office
building and uses the lower two stories for its general
corporation headquarters. The remaining 18 floors
are subleased to others. The subrents are nonbusiness
income and are to be deducted from the rent paid by
the taxpayer.
- "Annual rent" is the actual sum of money
or other consideration payable, directly or indirectly,
by the taxpayer or for its benefit for the use of
the property and includes:
- Any amount payable for the use of real or tangible
personal property, or any part thereof, whether
designated as a fixed sum of money or as a percentage
of sales, profits or otherwise.
Example: A taxpayer, pursuant to the terms of
a lease, pays a lessor $1,000 per month as a base
rental and at the end of the year pays the lessor
one percent of its gross sales of $400,000. The
annual rent is $16,000 ($12,000 plus one percent
of $400,000 or $4,000).
- Any amount payable as additional rent or in
lieu of rents, such as interest, taxes, insurance,
repairs or any other items which are required
to be paid by the terms of the lease or other
arrangement, and does not include amounts paid
as service charges, such as utilities, janitorial
services, etc. If a payment includes rent and
other charges unsegregated, the amount of rent
is determined by consideration of the relative
values of the rent and the other items.
Example (1): A taxpayer, pursuant to the terms
of a lease, pays the lessor $12,000 a year rent
plus taxes in the amount of $2,000 and interest
on a mortgage in the amount of $1,000. The annual
rent is $15,000.
Example (2): A taxpayer stores part of its inventory
in a public warehouse. The total charge for the
year was $1,000 of which $700 was for the use
of storage space and $300 for inventory, insurance,
handling and shipping charges and C.O.D. collections.
The annual rent is $700.
- "Annual rent" does not include incidental
day-to-day expenses such as hotel and motel accommodations,
daily rental of automobiles, etc.
- Leasehold improvements shall, for the purposes of
the property factor, be treated as property owned
by the taxpayer regardless of whether the taxpayer
is entitled to remove the improvements or the improvements
revert to the lessor upon expiration of the lease.
Hence, the original cost of leasehold improvements
is included in the factor.
- Property Factor-Averaging Property Values
As a general rule the average value of property owned
by the taxpayer is determined by averaging the values
at the beginning and ending of the income year. However,
the Secretary may require averaging by monthly or other
periodic values if such method of averaging is required
to properly reflect the average value of the taxpayer’s
property for the income year.
Averaging by monthly or other periodic values will generally
be applied if substantial fluctuations in the values of
the property exist during the income year or where property
is acquired after the beginning of the income year or
disposed of before the end of the income year.
- Payroll Factor (G.S. 105-130.4) (Section .0900)
- Payroll Factor-In General
The payroll factor includes the total amount paid by the
taxpayer for compensation in connection with earning business
income during the income year.
- Payroll Accounting Method
The total amount "paid" to employees is determined
upon the basis of the taxpayer's accounting method. If
the taxpayer has adopted the accrual method of accounting,
all compensation properly accrued shall be deemed to have
been paid. Notwithstanding the taxpayer's method of accounting,
at the election of the taxpayer, compensation paid to
employees may be included in the payroll factor by use
of the cash method if the taxpayer is required to report
such compensation under such method for unemployment compensation
purposes.
The taxpayer must consistent in the treatment of compensation
paid in filing returns with this State. In the event the
taxpayer is not consistent in its reporting it must disclose
in its return to this State the nature and extent of the
inconsistency.
- The Term "Compensation"
The term "compensation" means wages, salaries,
commissions and any other form of remuneration paid to
employees for personal services. Payments made to an independent
contractor or any other person not properly classifiable
as an employee are excluded. Only amounts paid directly
to employees are included in the payroll factor. Amounts
considered paid directly include the value of board, rent,
housing, lodging and other benefits or services furnished
to employees by the taxpayer in return for personal services
provided that such amounts constitute income to the recipient
under the Internal Revenue Code. In the case of employees
not subject to the Internal Revenue Code, e.g., those
employed in foreign countries, the determination of whether
such benefits or services would constitute income to the
employees is as though such employees were subject to
the Internal Revenue Code.
- The Term "Employee"
The term "employee" means (1) any officer of
a corporation, or (2) any individual who, under the usual
common-law rules applicable in determining the employer-employee
relationship, has the status of an employee. Generally,
a person will be considered to be an employee if he is
included by the taxpayer as an employee for purposes of
the payroll taxes imposed by the Federal Insurance Contributions
Act; except that, since certain individuals are included
within the term "employees" in the Federal Insurance
Contributions Act who would not be employees under the
usual common-law rules, it may be established that a person
who is included as an employee for purposes of the Federal
Insurance Contributions Act is not an employee for purposes
of this regulation.
- Payroll Factor Includes Only Business Income Compensation
and Excludes Compensation to General Executive Officers
The payroll factor includes only compensation that is
attributable to the business income subject to apportionment.
The compensation of any employee whose activities are
connected primarily with nonbusiness income is excluded
from the factor. All compensation paid to general executive
officers is excluded in computing the payroll factor.
General executive officers include the chairman of the
board, president, vice-presidents, secretary, treasurer,
comptroller and any other office serving in similar capacities.
Example (1): The taxpayer uses some of its employees in
the construction of a storage building which, upon completion,
is used for the production of business income. The wages
paid to those employees are treated as a capital expenditure
by the taxpayer. The amount of such wages is included
in the payroll factor.
Example (2): The taxpayer owns various securities from
which nonbusiness income is derived. The management of
the taxpayer's investment portfolio is the only duty of
Mr. X, an employee. The salary paid to Mr. X is excluded
from the payroll factor.
- Denominator of Payroll Factor
Except as provided above, the denominator of the payroll
factor is the total compensation paid everywhere during
the income year. Accordingly, compensation paid to employees
whose services are performed entirely in a state where
the taxpayer is exempt from taxation, for example, by
Public Law 86-272, is included in the denominator of the
payroll factor.
Example: A taxpayer has employees in its state of legal
domicile (State A) and is taxable in State B. In addition
the taxpayer has other employees whose services are performed
entirely in State C where the taxpayer is exempt from
taxation by Public Law 86-272. As to these latter employees,
the compensation will be assigned to State C where their
services are performed (i.e., included in the denominator
only of the payroll factor) even though the taxpayer is
not taxable in State C.
- Numerator of Payroll Factor
Except as provided above, the numerator of the payroll
factor is the total amount paid in this State during the
tax period by the taxpayer for compensation. The tests
to be applied in determining whether compensation is paid
in this State are derived from the Model Unemployment
Compensation Act. Accordingly, if compensation paid to
employees is included in the payroll factor by use of
the cash method of accounting or if the taxpayer is required
to report such compensation under such method for unemployment
compensation purposes, it shall be presumed that the total
wages reported by the taxpayer to this State for unemployment
compensation purposes constitutes compensation paid in
this State except for compensation excluded under number
5 above. The presumption may be overcome by satisfactory
evidence that an employee's compensation is not properly
reportable to this State for unemployment compensation
purposes.
Compensation is paid in this State if any one of the following
tests, applied consecutively, is met:
- The employee's service is performed entirely within
the State.
- The employee's service is performed both within
and without the State, but the service performed without
the State is incidental to the employee's service
within the State. The word "incidental"
means any service which is temporary or transitory
in nature, or which is rendered in connection with
an isolated transaction.
- If the employee's services are performed both within
and without this State, the employee's compensation
will be attributed to this State:
- If the employee's base of operations is in this
State; or
- If there is no base of operations in any state
in which some part of the service is performed,
but the place from which the service is directed
or controlled is in this State; or
- If the base of operations or the place from
which the service is directed or controlled is
not in any state in which some part of the service
is performed, but the employee’s residence is
in this State.
The words "base of operations" means the
place of more or less permanent nature from which
the employee starts his work and to which he customarily
returns in order to receive instructions from the
taxpayer or communications from his customers or other
persons, or to replenish stock or other materials,
repair equipment, or perform any other functions necessary
to the exercise of his trade or profession at some
other point or points.
The words "place from which the service is directed
or controlled" refer to the place from which
the power to direct or control is exercised by the
taxpayer.
- Corporations Utilizing Common Paymaster
- A parent corporation or any corporation serving
as common paymaster for payroll purposes shall eliminate
from the numerator and denominator of its payroll
factor computation the amounts paid on behalf of controlled
members for which it has charged such member the exact
cost and which does not meet the definition of compensation
insofar as the common paymaster is concerned. The
numerator and denomination of the payroll factor shall
be determined in accordance with applicable statute
after elimination of the described amounts.
- A subsidiary or otherwise controlled corporation
which is a member of and/or participant in a common
paymaster plan for payroll purposes, shall include
in its numerator and denominator of the payroll factor
computation amounts paid to its parent corporation
or to another corporation of the controlled group
as reimbursement in whatever form and by whatever
label for employees' compensation as defined. The
amounts paid by the subsidiary or controlled corporation
includable in the numerator and the denominator of
the payroll factor shall be determined in accordance
with applicable statute.
- Sales Factor (G.S. 105-130.4) (Section .1000)
- Sales Factor-Sales Made in General Business Operations
Subsection (a) (7) of G.S. 105-130.4 defines the term
"sales" to mean all gross receipts of the taxpayer
except receipts from the "casual sale" of property,
receipts allocated under subsections (c) through (h) of
G.S. 105-130.4, receipts exempt from taxation, and the
portion of receipts realized from the sale or maturity
of securities or other obligations that represents a return
of principal. Thus, for the purposes of the sales factor,
the term "sales" means generally all gross receipts
derived by a taxpayer from transactions and activities
in the course of its regular trade or business operations
which produce business income within the meaning of subsection
(a) (1) of G.S. 105-130.4.
A "casual sale" of property means the sale of
any property which was not purchased, produced or acquired
primarily for sale in the corporation's regular trade
or business.
In the case of a taxpayer whose business activity consists
of manufacturing and selling or purchasing and reselling
goods or products, "sales" includes all gross
receipts from the sales of such goods or products (or
other property of a kind which would properly be included
in the inventory of the taxpayer if on hand at the close
of the taxable year) held by the taxpayer primarily for
sale to customers in the ordinary course of its trade
or business. Gross receipts for this purpose means gross
sales, less returns and allowances, and includes all interest
income, service charges, carrying charges or time-price
differential charges incidental to such sales. Federal
and state excise taxes (including sales taxes) shall be
included as part of such receipts if such taxes are passed
on to the buyer or included as part of the selling price
of the product.
- Sales Factor–Sales Incidental To General Business
Operations
The term "sales" as a general rule, also includes
gross receipts derived by a taxpayer from business transactions
or activities which are incidental to its principal business
activity and which are includable in business income.
However, substantial amounts of gross receipts arising
from an incidental or occasional sale of a fixed asset
used in connection with the taxpayer's regular trade or
business will be excluded from the sales factor since
such sales constitute a "casual sale" of property
and the inclusion of such gross receipts will not fairly
apportion to this State the income derived by the taxpayer
from its business activity in this State. For example,
gross receipts from the sale of a factory or plant will
be excluded from the sales factor but the gain or loss
on the sale will be included in apportionable income.
Likewise, the "proceeds" from "rollover"
of working capital invested in certificates of deposits,
money market accounts, etc., on a short-term temporary
basis are not considered gross receipts for sales factor
purposes. The earnings of such investments whether labeled
as gains or interest will be the only amounts includable
in the sales factor.
In including or excluding gross receipts, the taxpayer
shall be consistent in the treatment of such gross receipts
in filing returns with this State. In the event the taxpayer
is not consistent in its reporting, it shall disclose
in its return to this State the nature and extent of the
inconsistency.
- Sales Factor-Sales Made In Other Types of Business
Activity As applied to a taxpayer engaged in business
activity other than the manufacturing and selling or purchasing
and reselling of property, "sales" includes
the gross receipts as defined in this subject.
- If the business activity consists of providing services,
such as the operation of an advertising agency, or
the performance of equipment service contracts, research
and development contracts, "sales" includes
the gross receipts from the performance of such services
including fees, commissions, and similar items.
- In the case of cost plus fixed fee contracts, such
as the operation of a government-owned plant for a
fee, gross receipts includes the entire reimbursed
cost, plus the fee.
- If the business activity is the renting of real
or tangible personal property, "sales" includes
the gross receipts from the rental, lease, or licensing
the use of the property.
- If the business activity is the sale, assignment,
or licensing of intangible personal property such
as patents and copyrights, "sales" includes
the gross receipts therefrom.
- Sales Factor-Numerator
The numerator of the sales factor will include the gross
receipts from sales which are attributable to this State,
and includes all interest income, service charges, carrying
charges, or time-price differential charges incidental
to such sales regardless of the place where the accounting
records are maintained or the location of the contract
or other evidence of indebtedness.
Where a taxpayer is not taxable in another state on its
business income but is taxable in another state only because
of nonbusiness income, all sales shall be attributable
to this State.
- Sales Factor-What Sales of Tangible Personal Property
Are In This State
- Gross receipts from the sales of tangible personal
property are in this State if the property is delivered
or shipped to a purchaser within this State regardless
of the f.o.b. point or other conditions of sale.
- Property shall be deemed to be delivered or shipped
to a purchaser within this State if the recipient
is located in this State, even though the property
is ordered from outside this State.
Example: The taxpayer, with inventory in State A,
sold $100,000 of its products to a purchaser having
branch stores in several states including this State.
The order for the purchase was placed by the purchaser's
central purchasing department located in State B.
$25,000 of the purchase order was shipped directly
to purchaser's branch store in this State. The branch
store in this State is the "purchaser within
this State" with respect to $25,000 of the taxpayer's
sales.
- Property is delivered or shipped to a purchaser
within this State if the shipment terminates in this
State, even though the property is subsequently transferred
by the purchaser to another state.
Example: The taxpayer makes a sale to a purchaser
who maintains a central warehouse in this State at
which all merchandise purchased is received. The purchaser
reships all the goods to its branch stores in other
states for sale.
All of the taxpayer's products shipped to the purchaser's
warehouse in this State is property "delivered
or shipped to a purchaser within this State."
- The term "purchaser within this State"
shall include the ultimate recipient of the property
if the taxpayer in this State, at the designation
of the purchaser, delivers to or has the property
shipped to the ultimate recipient within this State.
Example: A taxpayer in this State sold merchandise
to a purchaser in State A. Taxpayer directed the manufacturer
or supplier of the merchandise in State B to ship
the merchandise to the purchaser's customer in this
State pursuant to the purchaser's instructions. The
sale by the taxpayer is "in this State."
- When property being shipped by a seller from the
state of origin to a consignee in another state is
diverted while enroute to a purchaser in this State,
the sales are in this State.
Example: The taxpayer, a produce grower in State A,
begins shipment of perishable produce to the purchaser's
place of business in State B. While en route the produce
is diverted to the purchaser's place of business in
this State where the taxpayer is subject to tax. The
sale by the taxpayer is attributed to this State.
- Sales Factor-Sales To United States Government
- Gross receipts from the sales of tangible personal
property to the United States Government are in this
State if the property is shipped to or received or
accepted by the United States Government in this State.
For the purposes of this regulation, only sales for
which the United States Government makes direct payment
to the seller pursuant to the terms of its contract
constitute sales to the United States Government.
Thus, as a general rule, sales by a subcontractor
to the prime contractor, the party to the contract
with the United States Government, do not constitute
sales to the United States Government.
Example (1): A taxpayer contracts with General Services
Administration to deliver X number of trucks which
were paid for by the United States Government. The
United States Government is the purchaser.
Example (2): The taxpayer is a subcontractor to a
prime contractor with the National Aeronautics and
Space Administration and contracts to build a component
of a rocket for &1,000,000. The sale of the subcontractor
to the prime contractor is not a sale to the United
States Government.
- When the United States Government is the purchaser
of property which remains in the possession of the
taxpayer in this State for further processing under
another contract, or for other reasons, "shipment"
is deemed to be made at the time of acceptance by
the United States Government.
- Sales Factor-Numerator-Other Receipts Constituting
Business Income
- G.S. 105-130.4(1)(3) contains provisions for including
gross receipts from other business income transactions
in the numerator of the sales factor. Under this subsection
gross receipts are attributed to this State if:
- The receipts are from real or tangible personal
property located in this State; or
- The receipts are from intangible property and
are received from sources in this State; or
- The receipts are from services and the income
producing activity which gave rise to the receipts
is performed within this State.
The term "income producing activity"
means the act or acts directly engaged in by the
taxpayer, or by anyone acting on the taxpayer's
behalf, in the regular course of its trade or
business for the ultimate purpose of obtaining
gains or profits.
- Except for receipts from the casual sale of property,
as defined above, receipts described above from other
transactions constituting business income shall be
attributed to this State as set forth below.
- Gross receipts from the sale, lease, rental
or other use of real property are in this State
if the real property is located in this State.
- Gross receipts from the rental, lease, licensing
the use of, or other use of tangible property
shall be assigned to this State if the property
is within this State during the entire period
of rental, lease, license or other use. If the
property is within and without this State during
such period, gross receipts attributable to this
State shall be based upon the ratio which the
time the property was physically present or was
used in this State bears to the total time or
use of the property everywhere during such period.
- Gross receipts from intangible personal property
shall be attributed to this State if they are
received from sources within this State.
- Gross receipts for the performance of personal
services are attributable to this State to the
extent such services are performed in this State.
If the services are performed partly within and
without this State, such receipts shall be attributed
to this State based upon the ratio which the time
spent in performing such services in this State
bears to the total time spent in performing such
services everywhere. Time spent in performing
services includes the amount of time expended
in the performance of a contract or other obligation
which gives rise to such gross receipts. Personal
service not directly connected with the performance
of the contract or other obligation, as for example,
time expended in negotiating the contract, is
excluded from the computations.
Example (1): The taxpayer, a road show, gave theatrical
performances at various locations in State X and
in this State during the income year. All gross
receipts from performances given in this State
are attributed to this State.
Example (2): The taxpayer, a public opinion survey
corporation, conducted a poll by its employees
in State X and in this State for the sum of $9,000.
The project required 600 man hours to obtain the
basic data and prepare the survey report. Two
hundred of the 600 man hours were expended in
this State. The receipts attributable to this
State are $3,000.
| 200 man hours |
| 600 man hours X $9,000 = $3,000 |
- Public Utilities, Excluded Corporations and Air or Water
Transportation Corporations Apportionment Factors (G.S. 105-130.4)
- Railroad Companies
All business income of a railroad company must be apportioned
to North Carolina by multiplying the income by a fraction,
the numerator of which is the railway operating revenue from
business done within North Carolina and the denominator of
which is the total railway operating revenue everywhere.
- Telephone Companies
All business income of a telephone company must be apportioned
to this State by multiplying the income by a fraction. The
numerator of the fraction is gross operating revenue from
local service in North Carolina plus gross operating revenue
from toll services performed wholly within North Carolina
plus the proportion of revenue from interstate toll services
attributable to North Carolina as shown by the records of
the company plus the gross operating revenue in North Carolina
from other services less the uncollectible revenue in North
Carolina. The denominator of the fraction is the total gross
operating revenue everywhere less total uncollectible revenue.
- Motor Carriers of Property and/or Passengers
All business income of a motor carrier of property and/or
passengers must be apportioned by multiplying the income by
a fraction, the numerator of which is the number of vehicle
miles in North Carolina and the denominator of which is the
total number of vehicle miles of the company everywhere. The
word "vehicle miles" shall mean miles traveled by
vehicles owned or operated by the company hauling property
or passengers for a charge or traveling on a scheduled route.
- Telegraph Companies
All apportionable income of a telegraph company must be apportioned
by multiplying the income by a fraction, the numerator of
which is the property factor plus the payroll factor plus
the sales factor and the denominator of which is three.
- Excluded Corporations, including Construction Contractors,
and Other Public Utilities
All business income of an excluded corporation and all other
public utilities must be apportioned by multiplying business
income by the sales factor as defined in G.S. 105-130.4. "Excluded
corporation" means any company engaged in business as
a building or construction contractor, a securities dealer,
loan company or company which receives more than fifty percent
(50%) of its ordinary gross income from intangible property.
A building or construction contractor is a business so classified
in the Standard Industrial Classification Manual published
by the Federal Office of Management and Budget.
- Air or Water Transportation Corporations
All business income of an air or water transportation corporation
must be apportioned by a fraction, the numerator of which
is the corporation's revenue ton miles in this state and the
denominator of which is the corporation’s revenue ton miles
everywhere. The term "revenue ton mile" means one
ton of passengers, freight, rail, or other cargo carried one
mile. In making this computation, a passenger is considered
to weigh two hundred pounds.
Revenue ton miles in this State are determined for air transportation
companies from the flights, landings and/or departures from
locations in this State; and for water transportation companies
from dockings and/or departures from locations in this State.
|
|
|
|
