Senate Bill No. 749
(By Senators Helmick, Plymale, Chafin, Prezioso,
Edgell, Love, Bailey, Bowman, McCabe, Unger, Sypolt,
Fanning, Facemyer, Boley, Sprouse and Guills)
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[Originating in the Committee on Finance;
reported February 26, 2007.]
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A BILL to amend and reenact §11-24-1, §11-24-3a and §11-24-7 of the
Code of West Virginia, 1931, as amended, relating to
corporation net income tax generally; defining terms; and
requiring combined reporting.
Be it enacted by the Legislature of West Virginia.
That §11-24-1, §11-24-3a and §11-24-7 of the Code of West
Virginia, 1931, as amended, be amended and reenacted to read as
follows:
ARTICLE 24. CORPORATION NET INCOME TAX.
§11-24-1. Legislative findings.
The Legislature hereby finds and declares that the adoption by
this state for its corporation net income tax purposes of certain
provisions of the laws of the United States relating to the
determination of income for federal income tax purposes will: (1)
Simplify preparation of state corporation net income tax returns by taxpayers: (2) improve enforcement of the state corporation net
income tax through better use of information obtained from federal
income tax audits: and (3) aid interpretation of the state
corporation net income tax law through increased use of federal
judicial and administrative determinations and precedents.
The Legislature does therefore declare that this article be
construed so as to accomplish the foregoing purposes.
In recognition of the fact that corporate business in
increasingly conducted on a national and international basis, it is
the intent of the Legislature to adopted a combined system of
income tax reporting for corporations. This state's separate
accounting system is not adequate to accurately measure the income
of multistate and multinational corporations doing business in this
state and creates tax disadvantages for West Virginia corporations
in competition with those multistate and multinational
corporations. Therefore, it is the intent of the Legislature to
equalize all corporations doing business in the state and to
capture lost revenue with this expanded and more accurate tax base,
to lower the state's corporate income tax rates.
§11-24-3a. Specific terms defined.
For purposes of this article:
(1)
Business income. -- The term "business income" means
income arising from transactions and activity in the regular course
of the taxpayer's trade or business and includes income from tangible and intangible property if the acquisition, management and
disposition of the property or the rendering of services in
connection therewith constitute integral parts of the taxpayer's
regular trade or business operations all income which is
apportionable under the Constitution of the United States.
(2)
Commercial domicile. -- The term "commercial domicile"
means the principal place from which the trade or business of the
taxpayer is directed or managed:
Provided, That the commercial
domicile of a financial organization, which is subject to
regulation as such, shall be at the place designated as its
principal office with its regulating authority.
(3)
Compensation. -- The term "compensation" means wages,
salaries, commissions and any other form of remuneration paid to
employees for personal services.
(4)
Corporation. -- The term "corporation" includes a joint-
stock company and any association or other organization which is
taxable as a corporation under the federal income tax law.
An
affiliated group is a group of two or more corporations in which
more than fifty percent of the voting stock of each member
corporation is directly or indirectly owned by a common owner or
owners, either corporate or noncorporate, or by one or more of the
member corporations, but shall exclude overseas business
organizations or corporations that ordinarily has eighty percent or
more of its payroll and property outside the fifty states and District of Columbia.
(5)
Delegate. -- The term "delegate" in the phrase "or his
delegate", when used in reference to the tax commissioner, means
any officer or employee of the state tax department duly authorized
by the tax commissioner directly, or indirectly by one or more
redelegations of authority, to perform the functions mentioned or
described in this article or regulations promulgated thereunder.
(6)
Domestic corporation. -- The term "domestic corporation"
means any corporation organized under the laws of West Virginia and
certain corporations organized under the laws of the state of
Virginia before the twentieth day of June, one thousand eight
hundred sixty-three. Every other corporation is a foreign
corporation.
(7)
Engaging in business. -- The term "engaging in business"
or "doing business" means any activity of a corporation which
enjoys the benefits and protection of government and laws in this
state.
(8)
Federal Form 1120. -- The term "Federal Form 1120" means
the annual federal income tax return of any corporation made
pursuant to the United States Internal Revenue Code of 1986, as
amended, or in successor provisions of the laws of the United
States, in respect to the federal taxable income of a corporation,
and filed with the federal Internal Revenue Service. In the case of
a corporation that elects to file a federal income tax return as part of an affiliated group, but files as a separate corporation
under this article, then as to such corporation Federal Form 1120
means its pro forma Federal Form 1120.
(9)
Fiduciary. -- The term "fiduciary" means, and includes, a
guardian, trustee, executor, administrator, receiver, conservator
or any person acting in any fiduciary capacity for any person.
(10)
Financial organization. -- The term "financial
organization" means:
(A) A holding company or a subsidiary thereof. As used in this
section "holding company" means a corporation registered under the
federal bank holding company act of 1956 or registered as a savings
and loan holding company other than a diversified savings and loan
holding company (as defined in Section 408(a)(1)(F) of the federal
national housing act (12 U. S. C. 1730(a)(1)(F));
(B) A regulated financial corporation or a subsidiary thereof.
As used in this section "regulated financial corporation" means:
(i) An institution, the deposits, shares or accounts of which
are insured under the Federal Deposit Insurance Act or by the
Federal Savings and Loan Insurance Corporation;
(ii) An institution that is a member of a federal home loan
bank;
(iii) Any other bank or thrift institution incorporated or
organized under the laws of a state that is engaged in the business
of receiving deposits;
(iv) A credit union incorporated and organized under the laws
of this state;
(v) A production credit association organized under 12 U. S.
C. 2071;
(vi) A corporation organized under 12 U. S. C. 611 through 631
(an edge act corporation); or
(vii) A federal or state agency or branch of a foreign bank
(as defined in 12 U. S. C. 3101); or
(C) A corporation which derives more than fifty percent of its
gross business income from one or more of the following activities:
(i) Making, acquiring, selling or servicing loans or
extensions of credit. Loans and extensions of credit include:
(I) Secured or unsecured consumer loans;
(II) Installment obligations;
(III) Mortgages or other loans secured by real estate or
tangible personal property;
(IV) Credit card loans;
(V) Secured and unsecured commercial loans of any type; and
(VI) Loans arising in factoring.
(ii) Leasing or acting as an agent, broker or advisor in
connection with leasing real and personal property that is the
economic equivalent of an extension of credit (as defined by the
Federal Reserve Board in 12 C. F. R. 225.25(b)(5)).
(iii) Operating a credit card business.
(iv) Rendering estate or trust services.
(v) Receiving, maintaining or otherwise handling deposits.
(vi) Engaging in any other activity with an economic effect
comparable to those activities described in subparagraph (i), (ii),
(iii), (iv) or (v) of this paragraph.
(11)
Fiscal year. -- The term "fiscal year" means an
accounting period of twelve months ending on any day other than the
last day of December, and on the basis of which the taxpayer is
required to report for federal income tax purposes.
(12)
Includes and including. -- The terms "includes" and
"including" when used in a definition contained in this article
shall not be deemed to exclude other things otherwise within the
meaning of the term being defined.
(13)
Nonbusiness income. -- The term "nonbusiness income"
means all income other than business income.
(14)
Person. -- The term "person" is to be deemed
interchangeable with the term "corporation" in this section.
(15)
Pro forma return. -- The term "pro forma return" when
used in this article means the return which the taxpayer would have
filed with the Internal Revenue Service had it not elected to file
federally as part of an affiliated group.
(16)
Public utility. -- The term "public utility" means any
business activity to which the jurisdiction of the Public Service
Commission of West Virginia extends under section one, article two, chapter twenty-four of this code.
(17)
Sales. -- The term "sales" means all gross receipts of
the taxpayer that are "business income", as defined in this
section.
(18)
State. -- The term "state" means any state of the United
States, the District of Columbia, the Commonwealth of Puerto Rico,
any territory or possession of the United States and any foreign
country or political subdivision thereof.
(19)
Taxable year. -- The term "taxable year" means the
taxable year for which the taxable income of the taxpayer is
computed under the federal income tax law.
(20)
Tax. -- The term "tax" includes, within its meaning,
interest and additions to tax, unless the intention to give it a
more limited meaning is disclosed by the context.
(21)
Tax Commissioner. -- The term "Tax Commissioner" means
the Tax Commissioner of the State of West Virginia or his delegate.
(22)
Taxpayer. -- The term "taxpayer" means a corporation
subject to the tax imposed by this article.
(23)
This code. -- The term "this code" means the Code of West
Virginia, one thousand nine hundred thirty-one, as amended.
(24)
This state. -- The term "this state" means the State of
West Virginia.
(25) Unitary business.- - The term "unitary business" means
one or more related business organizations engaged in business activity both within and without the state among which there exists
a unity of ownership, operation, and use or an interdependence in
their functions.
(25) (26) West Virginia taxable income. -- The term "West
Virginia taxable income" means the taxable income of a corporation
as defined by the laws of the United States for federal income tax
purposes, adjusted, as provided in section six of this article:
Provided, That
in the case of a corporation having income from
business activity which is taxable without this state, its "West
Virginia taxable income" shall be such portion of its taxable
income as so defined and adjusted as is allocated or apportioned to
this state under the provisions of sections seven and seven-b of
this article. for a taxable corporation that is a member of an
affiliated group that is engaged in a unitary business with one or
more other members of that affiliated group, West Virginia taxable
income is the allocable share of the combined net income of the
group.
§11-24-7. Allocation and apportionment.
(a)
General. -- Any taxpayer having income from business
activity which is taxable both in this state and in another state
shall allocate and apportion its net income as provided in this
section. For purposes of this section, the term "net income" means
the taxpayer's federal taxable income adjusted as provided in
section six.
(b)
"Taxable in another state" defined. -- For purposes of
allocation and apportionment of net income under this section, a
taxpayer is taxable in another state if:
(1) In that state the taxpayer is subject to a net income tax,
a franchise tax measured by net income, a franchise tax for the
privilege of doing business, or a corporation stock tax; or
(2) That state has jurisdiction to subject the taxpayer to a
net income tax, regardless of whether, in fact, that state does or
does not subject the taxpayer to the tax.
(c)
Business activities entirely within West Virginia. -- If
the business activities of a taxpayer take place entirely within
this state, the entire net income of the taxpayer is subject to the
tax imposed by this article. The business activities of a taxpayer
are considered to have taken place in their entirety within this
state if the taxpayer is not "taxable in another state":
Provided,
That the business activities of a financial organization having its
commercial domicile in this state are considered to take place
entirely in this state, notwithstanding that the organization may
be "taxable in another state":
Provided, however, That the income
from the business activities of a financial organization not having
its commercial domicile in this state shall be apportioned
according to the applicable provisions of this article.
(d)
Business activities partially within and partially without
West Virginia; allocation of nonbusiness income. -- If the business activities of a taxpayer take place partially within and partially
without this state and the taxpayer is also taxable in another
state, rents and royalties from real or tangible personal property,
capital gains, interest, dividends or patent or copyright
royalties, to the extent that they constitute nonbusiness income of
the taxpayer, shall be allocated as provided in subdivisions (1)
through (4), inclusive, of this subsection:
Provided, That to the
extent the items constitute business income of the taxpayer, they
may not be so allocated but they shall be apportioned to this state
according to the provisions of subsection (e) of this section and
to the applicable provisions of section seven-b of this article.
(1)
Net rents and royalties. --
(A) Net rents and royalties from real property located in this
state are allocable to this state.
(B) Net rents and royalties from tangible personal property
are allocable to this state:
(i) If and to the extent that the property is utilized in this
state; or
(ii) In their entirety if the taxpayer's commercial domicile
is in this state and the taxpayer is not organized under the laws
of or taxable in the state in which the property is utilized.
(C) The extent of utilization of tangible personal property in
a state is determined by multiplying the 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 utilized in the state in which the property
was located at the time the rental or royalty payer obtained
possession.
(2)
Capital gains. --
(A) Capital gains and losses from sales of real property
located in this state are allocable to this state.
(B) Capital gains and losses from sales of tangible personal
property are allocable to this state if:
(i) The property had a situs in this state at the time of the
sale; or
(ii) The taxpayer's commercial domicile is in this state and
the taxpayer is not taxable in the state in which the property had
a situs.
(C) Capital gains and losses from sales of intangible personal
property are allocable to this state if the taxpayer's commercial
domicile is in this state.
(D) Gains pursuant to Section 631 (a) and (b) of the Internal
Revenue Code of 1986, as amended, from sales of natural resources severed in this state shall be allocated to this state if they are
nonbusiness income.
(3) Interest and dividends are allocable to this state if the
taxpayer's commercial domicile is in this state.
(4)
Patent and copyright royalties. --
(A) Patent and copyright royalties are allocable to this
state:
(i) If and to the extent that the patent or copyright is
utilized by the payer in this state; or
(ii) 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.
(5)
Corporate partner's distributive share. --
(A) Persons carrying on business as partners in a partnership,
as defined in Section 761 of the Internal Revenue Code of 1986, as
amended, are liable for income tax only in their separate or
individual capacities.
(B) A corporate partner's distributive share of income, gain,
loss, deduction or credit of a partnership shall be modified as
provided in section six of this article for each partnership. For
taxable years beginning on or after the thirty-first day of
December, one thousand nine hundred ninety-eight, the distributive
share shall then be allocated and apportioned as provided in this
section, using the partnership's property, payroll and sales
factors. The sum of that portion of the distributive share
allocated and apportioned to this state shall then be treated as
distributive share allocated to this state; and that portion of
distributive share allocated or apportioned outside this state
shall be treated as distributive share allocated outside this
state, unless the taxpayer requests or the tax commissioner, under
subsection (h) of this section requires that the distributive share
be treated differently.
(e)
Business activities partially within and partially without
this state; apportionment of business income. -- All net income, after deducting those items specifically allocated under subsection
(d) of this section, shall be apportioned to this state by
multiplying the net income by a fraction, the numerator of which is
the property factor plus the payroll factor plus two times the
sales factor, and the denominator of which is four, reduced by the
number of factors, if any, having no denominator.
(1)
Property factor. -- The property factor is a fraction, the
numerator of which is the average value of the taxpayer's real and
tangible personal property owned or rented and used by it in this
state during the taxable year and the denominator of which is the
average value of all the taxpayer's real and tangible personal
property owned or rented and used by the taxpayer during the
taxable year, which is reported on Schedule L Federal Form 1120,
plus the average value of all real and tangible personal property
leased and used by the taxpayer during the taxable year.
(2)
Value of property. -- Property owned by the taxpayer shall
be valued at its original cost, adjusted by subsequent capital
additions or improvements thereto and partial disposition thereof,
by reason of sale, exchange, abandonment, etc.:
Provided, That
where records of original cost are unavailable or cannot be
obtained without unreasonable expense, property shall be valued at
original cost as determined under rules of the Tax Commissioner.
Property rented by the taxpayer from others shall be valued at
eight times the annual rental rate. The term "net annual rental rate" is the annual rental paid, directly or indirectly, by the
taxpayer, or for its benefit, in money or other consideration for
the use of property and includes:
(A) Any amount payable for the use of real or tangible
personal property, or any part of the property, whether designated
as a fixed sum of money or as a percentage of sales, profits or
otherwise.
(B) 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, not including amounts paid as service charges, such as
utilities, janitor services, etc. If a payment includes rent and
other charges unsegregated, the amount of rent shall be determined
by consideration of the relative values of the rent and the other
items.
(3)
Movable property. -- The value of movable tangible
personal property used both within and without this state shall be
included in the numerator to the extent of its utilization in this
state. The extent of the utilization shall be determined by
multiplying the original cost of the property by a fraction, the
numerator of which is the number of days of physical location of
the property in this state during the taxable period, and the
denominator of which is the number of days of physical location of
the property everywhere during the taxable year. The number of days of physical location of the property may be determined on a
statistical basis or by other reasonable method acceptable to the
Tax Commissioner.
(4)
Leasehold improvements. -- Leasehold improvements shall,
for 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. Leasehold improvements shall be
included in the property factor at their original cost.
(5)
Average value of property. -- The average value of
property shall be determined by averaging the values at the
beginning and ending of the taxable year:
Provided, That the Tax
Commissioner may require the averaging of monthly values during the
taxable year if substantial fluctuations in the values of the
property exist during the taxable year, or where property is
acquired after the beginning of the taxable year, or is disposed
of, or whose rental contract ceases, before the end of the taxable
year.
(6)
Payroll factor. -- The payroll factor is a fraction, the
numerator of which is the total compensation paid in this state
during the taxable year by the taxpayer for compensation, and the
denominator of which is the total compensation paid by the taxpayer
during the taxable year, as shown on the taxpayer's federal income
tax return as filed with the Internal Revenue Service, as reflected in the schedule of wages and salaries and that portion of cost of
goods sold which reflects compensation, or as shown on a pro forma
return.
(7)
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 to any other person not properly classifiable as an
employee shall be excluded. Only amounts paid directly to employees
are included in the payroll factor. Amounts considered as paid
directly to employees 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 the amounts
constitute income to the recipient for federal income tax purposes.
(8)
Employee. -- The term "employee" means:
(A) Any officer of a corporation; or
(B) Any individual who, under the usual common-law rule
applicable in determining the employer-employee relationship, has
the status of an employee.
(9)
Compensation. -- Compensation is paid or accrued in this
state if:
(A) The employee's service is performed entirely within this
state; or
(B) The employee's service is performed both within and
without this state, but the service performed without the state is incidental to the individual's service within this state. The word
"incidental" means any service which is temporary or transitory in
nature or which is rendered in connection with an isolated
transaction; or
(C) Some of the service is performed in this state and:
(i) The employee's base of operations or, if there is no base
of operations, the place from which the service is directed or
controlled is in the state; or
(ii) 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 term "base of operations" is the place of more or less
permanent nature from which the employee starts his or her work and
to which he or she customarily returns in order to receive
instructions from the taxpayer or communications from his or her
customers or other persons or to replenish stock or other
materials, repair equipment, or perform any other functions
necessary to the exercise of his or her trade or profession at some
other point or points. The term "place from which the service is
directed or controlled" refers to the place from which the power to
direct or control is exercised by the taxpayer.
(10)
Sales factor. -- The sales factor is a fraction, the
numerator of which is the gross receipts of the taxpayer derived from transactions and activity in the regular course of its trade
or business in this state during the taxable year (business
income), less returns and allowances. The denominator of the
fraction is the total gross receipts derived by the taxpayer from
transactions and activity in the regular course of its trade or
business during the taxable year (business income), and reflected
in its gross income reported and as appearing on the taxpayer's
Federal Form 1120, and consisting of those certain pertinent
portions of the (gross income) elements set forth:
Provided, That
if either the numerator or the denominator includes interest or
dividends from obligations of the United States government which
are exempt from taxation by this state, the amount of such interest
and dividends, if any, shall be subtracted from the numerator or
denominator in which it is included.
(11)
Allocation of sales of tangible personal property. --
(A) Sales of tangible personal property are in this state if:
(i) The property is received in this state by the purchaser,
other than the United States government, regardless of the f. o. b.
point or other conditions of the sale. In the case of delivery by
common carrier or other means of transportation, the place at which
the property is ultimately received after all transportation has
been completed is the place at which the property is received by
the purchaser. Direct delivery in this state, other than for
purposes of transportation, to a person or firm designated by the purchaser, is delivery to the purchaser in this state, and direct
delivery outside this state to a person or firm designated by the
purchaser is not delivery to the purchaser in this state,
regardless of where title passes or other conditions of sale; or
(ii) The property is shipped from an office, store, warehouse,
factory or other place of storage in this state and the purchaser
is the United States government.
(B) All other sales of tangible personal property delivered or
shipped to a purchaser within a state in which the taxpayer is not
taxed, as defined in subsection (b) of this section, shall be
excluded from the denominator of the sales factor.
(12)
Allocation of other sales. -- Sales, other than sales of
tangible personal property are in this state if:
(A) The income-producing activity is performed in this state;
or
(B) The income-producing activity is performed both in and
outside this state and a greater proportion of the income-producing
activity is performed in this state than in any other state, based
on costs of performance; or
(C) The sale constitutes business income to the taxpayer, or
the taxpayer is a financial organization not having its commercial
domicile in this state, and in either case the sale is a receipt
described as attributable to this state in subsection (b), section
seven-b of this article.
(13)
Financial organizations and other taxpayers with business
activities partially within and partially without this state. --
Notwithstanding anything contained in this section to the contrary,
in the case of financial organizations and other taxpayers, not
having their commercial domicile in this state, the rules of this
subsection apply to the apportionment of income from their business
activities except as expressly otherwise provided in subsection
(b), section seven-b of this article.
(f)
Income-producing activity. -- The term "income-producing
activity" applies to each separate item of income and means the
transactions and activity directly engaged in by the taxpayer in
the regular course of its trade or business for the ultimate
purpose of obtaining gain or profit. The activity does not include
transactions and activities performed on behalf of the taxpayer,
such as those conducted on its behalf by an independent contractor.
"Income-producing activity" includes, but is not limited to, the
following:
(1) The rendering of personal services by employees with
utilization of tangible and intangible property by the taxpayer in
performing a service;
(2) The sale, rental, leasing, licensing or other use of real
property;
(3) The sale, rental, leasing, licensing or other use of
tangible personal property; or
(4) The sale, licensing or other use of intangible personal
property.
The mere holding of intangible personal property is not, in
itself, an income-producing activity:
Provided, That the conduct of
the business of a financial organization is an income-producing
activity.
(g)
Cost of performance. -- The term "cost of performance"
means direct costs determined in a manner consistent with generally
accepted accounting principles and in accordance with accepted
conditions or practices in the trade or business of the taxpayer.
(h)
Other methods of allocation and apportionment. --
(1)
General. -- If the allocation and apportionment provisions
of subsections (d) and (e) of this section do not fairly represent
the extent of the taxpayer's business activities in this state, the
taxpayer may petition for or the Tax Commissioner may require, in
respect to all or any part of the taxpayer's business activities,
if reasonable:
(A) Separate accounting;
(B) The exclusion of one or more of the factors;
(C) The inclusion of one or more additional factors which will
fairly represent the taxpayer's business activity in this state; or
(D) The employment of any other method to effectuate an
equitable allocation or apportionment of the taxpayer's income. The
petition shall be filed no later than the due date of the annual return for the taxable year for which the alternative method is
requested, determined without regard to any extension of time for
filing the return and the petition shall include a statement of the
petitioner's objections and of the alternative method of allocation
or apportionment as it believes to be proper under the
circumstances with such detail and proof as the Tax Commissioner
may require.
(2)
Alternative method for public utilities. -- If the
taxpayer is a public utility and if the allocation and
apportionment provisions of subsections (d) and (e) of this section
do not fairly represent the taxpayer's business activities in this
state, the taxpayer may petition for, or the tax commissioner may
require, as an alternative to the other methods provided for in
subdivision (1) of this subsection, the allocation and
apportionment of the taxpayer's net income in accordance with any
system of accounts prescribed by the public service commission of
this state pursuant to the provisions of section eight, article
two, chapter twenty-four of this code:
Provided, That the
allocation and apportionment provisions of the system of accounts
fairly represent the extent of the taxpayer's business activities
in this state for the purposes of the tax imposed by this article.
(3)
Burden of proof. -- In any proceeding before the Tax
Commissioner or in any court in which employment of one of the
methods of allocation or apportionment provided for in subdivision (1) or (2) of this subsection is sought, on the ground that the
allocation and apportionment provisions of subsections (d) and (e)
of this section do not fairly represent the extent of the
taxpayer's business activities in this state, the burden of proof
is:
(A) If the Tax Commissioner seeks employment of one of the
methods, on the Tax Commissioner; or
(B) If the taxpayer seeks employment of one of the other
methods, on the taxpayer.
A taxable corporation which is part of an affiliated group
engaged in a unitary business shall file a group return containing
the combined net income of the affiliated group and such other
information as the commissioner shall prescribe by legislative
rule.
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