N.H. Admin. Code § Rev 304.02 - Property Factor
(a) The property factor shall include:
(1) All the real and tangible personal
property, as defined in
Rev
301.26;
(2) Property that is used, is available for
use, or is capable of being used, during the taxable period in the regular
course of the trade or business of the business organization;
(3) Property used in the regular course of
business until its permanent withdrawal from use;
(4) Property, in transit with the property
being included in the numerator of the destination state; and
(5) The value of moveable or mobile property,
such as construction equipment and common carrier vehicles, with the value
being determined for purposes of the property factor on the total time or miles
within a state during the period.
(b) Property or equipment under construction
during the tax period, except inventoriable goods in process, shall be excluded
from the property factor until such property is used or available for use by
the business organization in its regular trade or business.
(c) Property, other than inventory, owned by
the business organization shall be valued at its original cost and be the basis
of the property for federal income tax purposes at the time of acquisition,
prior to any federal adjustments, and adjusted by subsequent sale, exchange,
abandonment, or other such disposition.
(d) Inventory, owned by the business
organization, shall be included in the property factor in accordance with the
valuation method used for federal income tax purposes.
(e) Property rented by a business
organization shall be valued at 8 times the net annual rental rate.
(f) The net annual rental rate shall be the
annual rent paid or accrued by the business organization less the aggregate
annual sub-rental rates accrued or received from sub-tenants.
(g) Rent shall be the amount payable for the
use of real or tangible property whether designated as a fixed sum or as a
percentage of sales or profits, and includes any additional amounts due in lieu
of rent such as interest and taxes which are required by the terms of the
lease.
(h) Business organizations
renting property in the regular course of a trade or business shall not deduct
such rental income as sub-rents.
(i) Business organizations utilizing combined
reporting shall:
(1) Determine the property
includible in the property factor after having eliminated all of the
inter-group activity; and
(2)
Eliminate any intergroup profits from the valuation of property included in the
property apportionment factor.
(j) The beginning and ending average value of
owned property shall be used for the property factor unless matrial distortions
of the property factor are caused by:
(1)
Fluctuations in values existing during the period; or
(2) The acquisition or disposition of
significant property during the period.
(k) Material distortions shall exist in
instances where the property factor computed using monthly averages is 25%
greater or lesser than the property factor computed using the beginning and
ending average.
(l) Business
organizations having material distortions caused by the use of a beginning and
ending average value shall calculate the value of their property for
apportionment purposes using a monthly average.
Notes
#2012, eff 5-5-82; ss by #2722, eff 5-23-84; ss by #4192, eff 12-23-86; amd by #4438, eff 6-22-88; ss by #5490, eff 10-19-92; amd by #5910, eff 10-14-94; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06 (formerly Rev 304.03 )
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