Montana Administrative Code

42.26.1101 DEFINITIONS The following definitions are applicable to the terms contained in this sub-chapter, unless the context clearly requires otherwise. "Film" or "film programming" means any and all performances, events, or productions telecast on television including, but not…

42.26.1102 GENERAL RULE When a person in the business of broadcasting film or radio programming, whether through the public airwaves, by cable, direct or indirect satellite transmission, or any other means of communication, either through a network (including owned and affiliated…

42.26.1103 APPORTIONMENT OF APPORTIONABLE INCOME The property factor shall be determined in accordance with 15-31-306, MCA, the payroll factor in accordance with 15-31-308, MCA, and the receipts factor in accordance with 15-31-310, MCA, except as modified by this rule. For purpos…

42.26.1201 DEFINITIONS The following definitions apply to this chapter: "800 service" means a telecommunications service that allows a caller to dial a toll-free number without incurring a charge for the call. The service, typically marketed as toll-free calling, may utilize a pr…

42.26.1202 GENERAL RULE Except as specifically modified by the rules in this subchapter, when a person providing telecommunications services generates apportionable income from sources within and outside of Montana, the amount of such apportionable income arising from sources wit…

42.26.1203 PROPERTY FACTOR Outer jurisdictional property that is used by a taxpayer when providing telecommunications services shall be excluded from both the numerator and the denominator of the property factor. Authorizing statute(s): 15-1-201, 15-31-313, 15-31-201, MCA Impleme…

42.26.1204 RECEIPTS FACTOR Gross receipts from the sale of telecommunications services, other than those defined in (3) through (7), which are sold on a call-by-call basis are in this state when: the call originates and terminates in this state; or the call either originates or t…

42.26.1205 APPLICABILITY The rules contained in this subchapter are effective for tax years beginning after December 31, 2011. Authorizing statute(s): 15-1-201, 15-31-201, 15-31-313, MCA Implementing statute(s): 15-1-601, 15-31-301, 15-31-302, 15-31-303, 15-31-304, 15-31-305, 15-…

42.26.1301 DEFINITIONS The following definitions apply to terms used in this subchapter. "Billing address" means the location indicated in the books and records of the taxpayer on the first day of the taxable year, or on such later date in the taxable year when the customer relat…

42.26.1302 APPORTIONMENT AND ALLOCATION Except as specifically modified by the administrative rules in this subchapter, a financial institution whose business activity is taxable both within and without Montana shall allocate and apportion its net income as provided in Title 15, …

42.26.1303 RECEIPTS FACTOR The receipts factor is a fraction, the numerator of which is the receipts of the taxpayer in Montana during the taxable year and the denominator of which is the receipts of the taxpayer within and without Montana during the taxable year. The method of c…

42.26.201 INTENT The regulations in this subchapter of ARM Title 42, chapter 26 are applicable to Article IV of the Multistate Tax Compact, 15-1-601, MCA, and to the Uniform Division of Income for Tax Purposes Act, 15-31-302 through 15-31-312, MCA, and are modeled after regulatio…

42.26.202 DEFINITIONS The following definitions apply to terms used in this subchapter: "Allocation" means the assignment of nonapportionable income to a particular state. "Annual rent" means the actual sum of money or other consideration payable, directly or indirectly, by the t…

42.26.203 CONSISTENCY AND UNIFORMITY IN REPORTING In filing returns with this state, if the taxpayer departs from or modifies the manner in which income has been classified as apportionable or nonapportionable income in returns for prior years, the taxpayer shall disclose in the …

42.26.204 COMBINED REPORTS If a particular trade or business is carried on by a taxpayer and one or more unitary affiliated corporations owned greater than 50 percent, the taxpayer is required to file a "combined report" whereby the entire apportionable income of such trade or bu…

42.26.205 TWO OR MORE BUSINESSES OF A SINGLE TAXPAYER A taxpayer may have more than one "trade or business." In such cases, it is necessary to determine the apportionable income attributable to each separate trade or business. The income of each business is then apportioned by an…

42.26.206 APPORTIONABLE AND NONAPPORTIONABLE INCOME DEFINED Section 15-31-301, MCA, requires that every item of income be classified either as apportionable or nonapportionable income. Income for purposes of classification as apportionable or nonapportionable includes gains and l…

42.26.207 DETERMINATION OF APPORTIONABLE AND NONAPPORTIONABLE INCOME Rental income from real and tangible property is characterized as apportionable income if the property with respect to which the rental income was received is, or was, used in the taxpayer's trade or business an…

42.26.208 ALLOCATION OF INCOME AND DEDUCTIONS In most cases an allowable deduction of a taxpayer will be applicable only to the apportionable income arising from a particular trade or business or to a particular item of nonapportionable income. In some cases an allowable deductio…

42.26.209 TAXABILITY The concept of taxability in another state is based upon the premise that every state in which the taxpayer is engaged in business activity may impose an income tax even though every state does not do so. In states which do not, other types of taxes may be im…

42.26.210 TAXABLE IN ANOTHER STATE Under 15-31-301 and 15-1-601, Article IV(2), MCA, the taxpayer is subject to the allocation and apportionment provisions of Title 15, chapter 31, part 3, MCA, if it has income from business activity that is taxable both within and without this s…

42.26.211 CONCEPT OF "SUBJECT TO" A TAX A taxpayer is "subject to" one of the taxes specified in 15-31-303, MCA, if it carries on business activities in such state and that state imposes such a tax on the taxpayer. Any taxpayer that asserts that it is subject to one of the taxes …

42.26.212 STATE TAXING JURISDICTION The second test, that of 15-31-303, MCA, applies if the taxpayer's business activity is sufficient to give the state jurisdiction authority to impose a net income tax by reason of such business activity under the Constitution and statutes of th…

42.26.214 DEFINITIONS (Is Hereby Repealed.) Authorizing statute(s): Sec. 15-31-501, MCA Implementing statute(s): Sec. 15-31-321, MCA History: NEW, 1988 MAR p. 278, Eff. 2/12/88; REP, 1993 MAR p. 572, Eff. 4/16/93.

42.26.227 PARTNERSHIP DEFINED (Is Hereby Repealed.) Authorizing statute(s): Sec. 15-31-313 and 15-31-501, MCA Implementing statute(s): Sec. 15-31-305, MCA History: NEW, 1988 MAR p. 1541, Eff. 7/15/88; REP, 1993 MAR p. 572, Eff. 4/16/93.

42.26.228 TREATMENT OF PARTNERSHIPS AND DISREGARDED ENTITIES IN THE APPORTIONMENT FORMULA If the operations of a partnership or disregarded entity are unitary with the business operations of a corporate partner or disregarded entity owner, the corporate partner's or owner's pro r…

42.26.229 PARTNERSHIPS AND DISREGARDED ENTITIES - NONAPPORTIONABLE INCOME A partnership or disregarded entity that is not part of a unitary business operation of a corporate partner or disregarded entity owner will be treated as follows: The corporate partner's or disregarded ent…

42.26.230 APPORTIONMENT FORMULA - EXCLUSIONS If a taxpayer has property, payroll, or receipts assignable under 15-31-305 through 15-31-311, MCA, and attendant regulations to a location where it is not taxable under 15-31-303, MCA, the property, payroll, or receipts assigned to th…

42.26.231 PROPERTY FACTOR IN GENERAL The property factor of the apportionment formula for each trade or business of the taxpayer shall include all real and tangible personal property owned or rented and used during the tax period in the regular course of such trade or business. P…

42.26.232 PROPERTY USED FOR THE PRODUCTION OF APPORTIONABLE INCOME Property shall be included in the property factor if it is actually used or is available for or capable of being used during the tax period in the regular course of the trade or business of the taxpayer. Property …

42.26.233 CONSISTENCY IN REPORTING WITH RESPECT TO PROPERTY In filing returns with this state, if the taxpayer departs from or modifies the manner of valuing property or of excluding or including property in the property factor, used in returns for prior years, the taxpayer shall…

42.26.234 NUMERATOR OF PROPERTY FACTOR The numerator of the property factor shall include the average value of the real and tangible personal property owned or rented by the taxpayer and used in this state during the tax period in the regular course of the trade or business of th…

42.26.235 VALUATION OF OWNED PROPERTY Property owned by the taxpayer shall be valued at its original cost. As a general rule "original cost" is deemed to be the basis of the property for federal income tax purposes (prior to any federal adjustments) at the time of acquisition by …

42.26.236 VALUATION OF RENTED PROPERTY Property rented by the taxpayer is valued at eight times its net annual rental rate. The net annual rental rate for any item of rented property is the annual rental rate paid by the taxpayer for such property, with the exception of (1)(b), l…

42.26.237 AVERAGING PROPERTY VALUES As a general rule, the average value of property owned by the taxpayer shall be determined by averaging the values at the beginning and ending of the tax period. However, the department may require or allow averaging by monthly values if such m…

42.26.241 PAYROLL FACTOR IN GENERAL The payroll factor of the apportionment formula for each trade or business of the taxpayer shall include the total amount paid by the taxpayer in the regular course of its trade or business for compensation during the tax period. The total amou…

42.26.242 CONSISTENCY IN REPORTING WITH RESPECT TO PAYROLL In filing returns with this state, if the taxpayer departs from or modifies the treatment of compensation paid used in returns for prior years, the taxpayer shall disclose in the return for the current year the nature and…

42.26.243 DENOMINATOR OF PAYROLL FACTOR The denominator of the payroll factor is the total compensation paid everywhere during the tax period. Accordingly, the compensation paid to employees whose services are performed entirely in State C where the taxpayer is immune from taxati…