§ 44-14-14.1. Apportionment and allocation of income for purposes of taxation. (a) Except as specifically provided in this chapter a banking institution whose business activity is taxable both within and outside of this state shall allocate and apportion its net income as provided in §§ 44-14-14.1 - 44-14-14.5. A financial institution organized under the laws of a foreign country, the Commonwealth of Puerto Rico or a territory or possession of the United States whose effectively connected income (as defined under the federal Internal Revenue Code) is taxable both within this state and within another state, other than the state in which it is organized shall allocate and apportion its net income as provided in §§ 44-14-14.1 - 44-14-14.5.
(b) All income shall be apportioned to this state by multiplying this income by the apportionment percentage. The apportionment percentage is determined by adding the taxpayer's receipts factor (as described in § 44-14-14.3), property factor (as described in § 44-14-14.4), and payroll factor (as described in § 44-14-14.5) together and dividing the sum by three. If one of the factors is missing, the two remaining factors are added and the sum is divided by two. If two of the factors are missing, the remaining factor is the apportionment percentage. A factor is missing if both its numerator and denominator are zero, but it is not missing merely because its numerator is zero.
(c) Each factor shall be computed according to the method of accounting (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 of the taxpayer's business activity in this state, the taxpayer may petition for or the tax administrator may require, in respect to all or any part of the taxpayer'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 which will fairly represent the taxpayer's business activity in this State; or
(3) The employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's income.
History of Section. (P.L. 1995, ch. 370, art. 34, § 5.)
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