§ 44-14-14.1 - Apportionment and allocation of income for purposes of taxation. - Rhode Island Statutes

SECTION 44-14-14.1

   § 44-14-14.1  Apportionment and allocationof income for purposes of taxation. – (a) Except as specifically provided in this chapter a banking institution whosebusiness activity is taxable both within and outside of this state shallallocate and apportion its net income as provided in §§ 44-14-14.1– 44-14-14.5. A financial institution organized under the laws of aforeign country, the Commonwealth of Puerto Rico or a territory or possessionof the United States whose effectively connected income (as defined under thefederal Internal Revenue Code) is taxable both within this state and withinanother state, other than the state in which it is organized shall allocate andapportion its net income as provided in §§ 44-14-14.1 –44-14-14.5.

   (b) All income shall be apportioned to this state bymultiplying this income by the apportionment percentage. The apportionmentpercentage is determined by adding the taxpayer's receipts factor (as describedin § 44-14-14.3), property factor (as described in § 44-14-14.4), andpayroll factor (as described in § 44-14-14.5) together and dividing thesum by three. If one of the factors is missing, the two remaining factors areadded and the sum is divided by two. If two of the factors are missing, theremaining factor is the apportionment percentage. A factor is missing if bothits numerator and denominator are zero, but it is not missing merely becauseits numerator is zero.

   (c) Each factor shall be computed according to the method ofaccounting (cash or accrual basis) used by the taxpayer for the taxable year.

   (d) If the allocation and apportionment provisions of§§ 44-14-14.1 – 44-14-14.5 do not fairly represent the extent ofthe taxpayer's business activity in this state, the taxpayer may petition foror the tax administrator may require, in respect to all or any part of thetaxpayer's business activity, if reasonable:

   (1) The exclusion of any one or more of the factors;

   (2) The inclusion of one or more additional factors whichwill fairly represent the taxpayer's business activity in this State; or

   (3) The employment of any other method to effectuate anequitable allocation and apportionment of the taxpayer's income.