Section 316-24-329 - SALES FACTOR; SALES OTHER THAN SALES OF TANGIBLE PERSONAL PROPERTY IN NEBRASKA; TAX YEARS BEGINNING BEFORE JANUARY 1, 2014329.01 In General For tax years beginning before January 1, 2014, the numerator of the sales factor includes gross receipts from transactions other than the sales of tangible personal property (including transactions with the U.S. Government) if the income-producing activity which gave rise to the receipts is performed within Nebraska. Gross receipts are attributed to this state if, with respect to a particular income-producing activity, the income-producing activity is performed wholly within Nebraska or is performed both within and outside Nebraska but the greater proportion of the income-producing activity is performed in Nebraska, based on costs of performance.
329.02 Income -producing Activity Income-producing activity means the transactions and activities directly performed for the ultimate purpose of obtaining gains or profit. This determination applies to each separate item of income. Income-producing activity does not include transactions and activities performed on behalf of a taxpayer (for example, those conducted on its behalf by an independent contractor). Income-producing activity includes but is not limited to the following:
329.02A Rendering personal services by employees or utilizing tangible and intangible property by the taxpayer in performing a service;329.02B Selling, renting, leasing, licensing or other use of real property;329.02C Renting, leasing, licensing or other use of tangible personal property; and329.02D Selling, licensing, or other use of intangible personal property. Holding intangible personal property is not, by itself, an income-producing activity.329.03 Costs of Performance Costs of performance mean direct costs attributable to the income-producing activity. The costs of performance are determined in a manner consistent with generally accepted accounting principles and accepted conditions or practices in the trade or business of the taxpayer.
329.04 Special Rules The following are special rules for determining when receipts from the income-producing activities described below are in Nebraska:
329.04A Gross receipts from selling, renting, leasing, or licensing real property are in Nebraska if the real property is located in this state.329.04B Gross receipts from renting, leasing, or licensing tangible personal property are in Nebraska if the tangible personal property is located in Nebraska. If tangible personal property is used both within and outside Nebraska during the rental, lease, or licensing period, the gross receipts attributable to Nebraska are the total gross receipts multiplied by the ratio that the time the property was physically present or used in Nebraska bears to the total time or use of the property everywhere during the period. 329.04C Gross receipts for performing services are attributable to Nebraska to the extent the services are performed in Nebraska. 329.04C(1) Where services are performed both within and outside Nebraska, and the services performed in each state are separate income-producing activities, the gross receipts for performing these services that are attributable to Nebraska are the total gross receipts multiplied by the ratio which the time spent performing the services in Nebraska bears to the total time spent in performing the services everywhere. Time spent performing services includes the amount of time expended in performing a contract or other obligation which gives rise to the gross receipts.329.04C(2) Where services relating to a single item of income are performed within and outside Nebraska, the gross receipts for performing these services are attributable to Nebraska if a greater portion of the services were performed in this state, based on costs of performance, than in any other state.329.04C(3) Services not directly connected with performing the income-producing activity, for example, time expended negotiating the applicable contract, are excluded from the determination. 329.04D For the sale, assignment, or licensing of intangible personal property, for example, patents and copyrights, sales means the net gain from these sales, assignments, or licensing.316 Neb. Admin. Code, ch. 24, § 329
Neb. Rev. Stat. §§ 77-2734.13 and 77-2734.14. _____ .