§ 36 §5211 — General

1.
Apportionment.
A taxpayer, other than a resident individual, estate or trust, having income from business activity that is taxable both within and without this State, other than the rendering of purely personal services by an individual, shall apportion that taxpayer's net income as provided in this section. A taxpayer having income solely from business activity taxable within this State shall apportion that taxpayer's entire net income to this State.
2.
Taxpayer taxable in another state.
For purposes of apportionment of income under this section, a taxpayer is taxable in another state if in that state that 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 corporate stock tax or that state has jurisdiction to subject the taxpayer to a net income tax regardless of whether in fact the state does or does not.
3.
Allocation of certain nonbusiness income.
4.
Rents and royalties:
5.
Capital gains and losses:
6.
Commercial domicile in this State.
7.
Patent and copyright royalties:
8.
Formula for apportionment of income to State.
All income shall be apportioned to this State by multiplying the income by the sales factor.
9.
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 in this State during the tax period and the denominator of which is the average value of all the taxpayer's real and tangible personal property owned or rented and used during the tax period.
10.
Property valuation at original cost.
Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at 8 times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the taxpayer.
11.
Determination of average value of property.
The average value of property shall be determined by averaging the values at the beginning and ending of the tax period but the Tax Assessor may require the averaging of monthly values during the tax period if reasonably required to reflect properly the average value of the taxpayer's property.
12.
Payroll factor.
The payroll factor is a fraction, the numerator of which is the total amount paid in this State during the tax period by the taxpayer for compensation, and the denominator of which is the total compensation paid everywhere during the tax period. Eighty-five percent of any amounts paid pursuant to a contract by the taxpayer to an employee-leasing company for leased employees, and 100% of the amount paid pursuant to a contract to a temporary services company for temporary employees, must be included in the taxpayer's payroll factor. The payroll factor of an employee-leasing company or a temporary services company must exclude compensation paid to leased or temporary employees who are providing personal services to client companies.
13.
When compensation paid in this State.
Compensation is paid in this State, if:
14.
Sales factor formula.
The sales factor is a fraction, the numerator of which is the total sales of the taxpayer in this State during the tax period, and the denominator of which is the total sales of the taxpayer everywhere during the tax period.
15.
When sales of tangible personal property are in this State.
Sales of tangible personal property are in this State if:
16.
When sales other than tangible personal property are in State.
16-A.
Other sales.
Sales other than sales of tangible personal property are sourced as follows.
16-B.
Sales factor formula for certain disaster period receipts.
The sales factor must exclude from the numerator sales receipts of a person whose only business activity in the State during the taxable year is the performance of services during a disaster period that are solely and directly related to a declared state disaster or emergency that were requested by the State, a county, city, town or political subdivision of the State or a registered business.
17.
Variations.
If the apportionment provisions of this section do not fairly represent the extent of the taxpayer's business activity in this State, the taxpayer may petition for, or the tax assessor may require, in respect to all or any part of the taxpayer's business activity, if reasonable:

Legislative History

P&SL 1969, c. 154, §F/§1 (NEW). PL 1987, c. 841, §§10-13 (AMD). PL 1991, c. 502, §1 (AMD). PL 1991, c. 502, §2 (AFF). PL 1999, c. 708, §43 (AMD). PL 2001, c. 439, §D8 (AMD). PL 2001, c. 439, §D9 (AFF). PL 2005, c. 12, §MMMM2 (AMD). PL 2005, c. 12, §MMMM3 (AFF). PL 2007, c. 240, Pt. V, §§2-12 (AMD). PL 2007, c. 240, Pt. V, §15 (AFF). PL 2007, c. 627, §§84-88 (AMD). PL 2007, c. 627, §96 (AFF). PL 2009, c. 213, Pt. NN, §§1-4 (AMD). PL 2009, c. 213, Pt. NN, §5 (AFF). PL 2009, c. 571, Pt. GG, §1 (AMD). PL 2009, c. 571, Pt. GG, §2 (AFF). RR 2011, c. 2, §42 (COR). PL 2011, c. 622, §6 (AMD). PL 2011, c. 622, §7 (AFF). PL 2019, c. 401, Pt. C, §9 (AMD). PL 2019, c. 401, Pt. C, §16 (AFF). PL 2021, c. 181, Pt. E, §3 (AMD). PL 2021, c. 181, Pt. E, §4 (AFF). RR 2025, c. 1, Pt. F, §§24, 25 (COR).