Cal. Code Regs. Tit. 18, §§ 25137-5 - Commercial Fishing-Allocation and Apportionment of Income

(a) Definitions.

(1) The term "business of commercial fishing" means a trade or business which utilizes a ship or ships in the taking of fish or the bringing of fish ashore for financial or pecuniary gain or profit.

(2) A "port day" is a day or part of a day spent in port or on the seas while the vessel is "in operation." A "port day" begins at the time the ship enters an area within which a state (as defined in Section 25120(f), Revenue and Taxation Code) asserts jurisdiction, including the assertion of jurisdiction for fishing, and ends when the ship leaves such area. A "port day" does not include the time a ship is "out of service."

(3) A ship shall be considered "in operation" while engaged in prevoyage and post-voyage activities as well as when it is searching for fish, fishing, or transporting fish. Prevoyage and post-voyage activities include, but are not limited to, loading, unloading, refueling, or provisioning the ship, or when the ship is being repaired (except for repairs in shipyards, including drydocking). A ship shall commence being "in operation" for a voyage when it is manned with full crew and the vessel is ready for a fishing voyage. It ceases to be "in operation" after a voyage when the vessel is unloaded and cleaned, including the preparation of the fish wells to a fish-carrying condition.

(4) A ship shall be "out of service" when it is not in operation. "Out of service" time includes, but is not limited to, time while a ship is idle between voyages, time for repairs in shipyards (including drydocking), and time after which a ship is seized by a foreign government and held under restraint pending disposition of charges alleging violation of such government's law. A ship is also considered out of service when it is involuntarily waiting to unload.

(b) Apportionment of Business Income. The property, payroll and sales factors of the apportionment formula for a commercial fishing business shall be computed pursuant to Sections 25128 through 25137 of the Revenue and Taxation Code and the regulations adopted pursuant thereto except as provided in this regulation.

(1) Property Factor. Numerator. A portion of the value of a ship and ship's equipment used in the business shall be attributed to this state based upon the ratio of the number of port days during which the ship was within this state to the total number of port days of the ship everywhere during the income year.

(2) Payroll Factor. Numerator. A portion of the compensation paid to ship's personnel and fishermen shall be attributed to this state based upon the ratio of the number of port days during which the ship was within the state to the total number of port days of the ship everywhere during the income year.

(3) Sales Factor. Numerator. Receipts from the sale of fish shall be attributed to this state based upon the ratio of the number of port days during which the ship was within this state to the total number of port days of the ship everywhere during the income year.

Notes

Cal. Code Regs. Tit. 18, §§ 25137-5

1. Editorial correction renumbering and amending former Section 25137(l) to Section 25137-5 filed 3-27-85; effective upon filing pursuant to Government Code Section 11346.2(d) (Register 85, No. 13). For prior history, see Registers 82, No. 46 and 82, No. 28.

Note: Authority cited: Section 26422, Revenue and Taxation Code. Reference: Section 25137, Revenue and Taxation Code.

1. Editorial correction renumbering and amending former Section 25137(l) to Section 25137-5 filed 3-27-85; effective upon filing pursuant to Government Code Section 11346.2(d) (Register 85, No. 13). For prior history, see Registers 82, No. 46 and 82, No. 28.