Alabama Administrative Code
Title 810 - ALABAMA DEPARTMENT OF REVENUE
Chapter 810-27-1 - MULTISTATE TAX COMPACT
Section 810-27-1-.12 - Property Factor: Averaging Property Values

Universal Citation: AL Admin Code R 810-27-1-.12

Current through Register Vol. 42, No. 11, August 30, 2024

(1) As a general rule, the average value of property owned by the taxpayer shall be determined by averaging the values at the beginning and ending of the tax period. However, the Commissioner may require or allow averaging by monthly values if that method of averaging is required to properly reflect the average value of the taxpayer's property for the tax period.

(a) Averaging by monthly values will generally be applied if substantial fluctuations in the values of the property exist during the tax period or if property is acquired after the beginning of the tax period or disposed of before the end of the tax period.
1. EXAMPLE: The monthly value of the taxpayer's property was as follows:

January

$ 2,000

July

$ 15,

000

February

2,000

August

17,

000

March

3,000

September

23,

000

April

3,500

October

25,

000

May

4,500

November

13,

000

June

10,000

December

2,

000

$25,000

$ 95,

000

Total

120,

000

The average value of the taxpayer's property includable in the property factor for the income year is determined as follows:

$120,000/12 = $10,000

(b) Averaging with respect to rented property is achieved automatically by the method of determining the net annual rental rate of such property as set forth in Rule 810-27-1-.11.

(2) Applicability.

(a) For tax periods beginning on or after January 1, 2021, the property factor is no longer considered in calculating a taxpayer's Alabama apportionment factor.

(b) The provisions of this rule are applicable for tax periods beginning on or after January 1, 2021, when:
1. A taxpayer petitions and is granted approval from the department to employ an alternative apportionment method in accordance with § 40-27-1, Code of Ala. 1975.

2. Measuring against nexus thresholds pursuant to § 40-18-31.2, Code of Ala. 1975.

Authors: Holly H. Coon, Jennifer Reynolds, Christina Hall, CPA, Kathleen Abrams

Statutory Authority: Code of Ala. 1975, §§ 40-2A-7(a)(5), 40-18-57.

Disclaimer: These regulations may not be the most recent version. Alabama may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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