Colo. Code Regs. 39-22-303.6-16

Current through Register Vol. 47, No. 20, October 25, 2024

Rule 39-22-303.6-16 - Alternative Apportionment

Basis and Purpose. The bases of this rule are §§ 39-21-112, 39-22-301, 39-22-303, and 39-22-303.6, C.R.S. The purpose of this rule is to provide guidance regarding the use of alternative apportionment methods. Consistent with the General Assembly's adoption of § 39-22-303.6, C.R.S., these rules are intended to conform the state's income tax laws to the Multistate Tax Commission's model statute and regulation except when those model provisions are inconsistent with Colorado statute. See 2018 Colo. Sess. Laws, ch. 369, § 1(2).

(1)General Rule. Section 39-22-303.6(9), C.R.S., provides that if the allocation and apportionment provisions of § 39-22-303.6, C.R.S., do not fairly represent the extent of the taxpayer's business activity in Colorado, the taxpayer may petition for, or the Department may require, with respect to all or any part of the taxpayer's business activities, if reasonable:

(a) separate accounting;

(b) the inclusion of one or more additional factors that will fairly represent the taxpayer's business activity in Colorado;

(c) the inclusion of any receipts of a taxpayer otherwise excluded under § 39-22-303.6(1)(d), C.R.S., including those from hedging transactions or from the maturity, redemption, sale, exchange, loan, or other disposition of cash or securities; or

(d) the employment of any other method, notwithstanding any other provision of § 39-22-303.6(9), C.R.S., to effectuate an equitable apportionment or allocation of the taxpayer's income, fairly calculated to determine the net income derived from or attributable to sources in Colorado.

(2) Section 39-22-303.6(9)(b), C.R.S., permits a departure from the allocation and apportionment provisions of § 39-22-303.6, C.R.S., only in limited and specific cases where the apportionment and allocation provisions contained in § 39-22-303.6, C.R.S., produce incongruous results.

(3) In the case of certain industries, transactions, or activities, Rules 39-22-303.6 -1 through-13, with respect to the apportionment formula, may not set forth appropriate procedures for determining the apportionment factor. Nothing in § 39-22-303.6(9)(b), C.R.S., or in this Rule 39-22-303.6 -16 shall preclude the Department from establishing appropriate procedures under §§ 39-22-303.6(4) through (6), C.R.S., for determining the apportionment factor for each such industry, but such procedures shall be applied uniformly.

(4) In the case of certain taxpayers, the general rules under §§ 39-22-303 and 39-22-303.6, C.R.S., and the rules thereunder may not set forth appropriate procedures for determining gross income or the apportionment factor. Nothing in § 39-22-303.6(9)(b), C.R.S., or in this rule, shall preclude the Department from distributing or allocating gross income and deductions under § 39-22-303(6), C.R.S.

39-22-303.6-16

Colorado Register, Vol 37, No. 14. July 25, 2014, effective 8/14/2014

37 CR 18, September 25, 2014, effective 10/15/2014

37 CR 19, October 10,2014, effective 10/30/2014

37 CR 22, November 25, 2014, effective 12/16/2014

38 CR 04, February 25, 2015, effective 3/17/2015

38 CR 07, April 10, 2015, effective 4/30/2015

38 CR 11, June 10, 2015, effective 6/30/2015

38 CR 22, November 25, 2015, effective 12/15/2015

38 CR 24, December 25, 2015, effective 1/14/2016

38 CR 24, December 25, 2015, effective 1/19/2016

39 CR 01, January 10, 2016, effective 1/30/2016

39 CR 16, August 25, 2016, effective 9/14/2016

40 CR 08, April 25, 2017, effective 5/15/2017

40 CR 12, June 25, 2017, effective 7/15/2017

40 CR 16, August 25, 2017, effective 9/14/2017

40 CR 23, December 10, 2017, effective 1/1/2018

41 CR 14, July 25, 2018, effective 8/14/2018

41 CR 20, October 25, 2018, effective 11/14/2018

42 CR 02, January 25, 2019, effective 12/18/2018

42 CR 02, January 25, 2019, effective 12/18/2018, expires 4/17/2019

42 CR 06, March 25, 2019, effective 4/14/2019

43 CR 04, February 25, 2020, effective 3/16/2020

43 CR 13, July 10, 2020, effective 6/2/2020

43 CR 17, September 10, 2020, effective 9/30/2020

44 CR 03, February 10, 2021, effective 3/2/2021

44 CR 07, April 10, 2021, effective 4/30/2021

44 CR 08, April 25, 2021, effective 5/15/2021

45 CR 01, January 10, 2022, effective 1/30/2022

45 CR 04, February 25, 2022, effective 3/17/2022

45 CR 05, March 10, 2022, effective 3/30/2022

46 CR 11, June 10, 2023, effective 5/2/2023

46 CR 09, May 10, 2023, effective 5/30/2023