Current through Register Vol. 49, No. 13, September 23, 2024
Subpart
1.
General information.
Minnesota Statutes, section
290.17,
subdivision 3, provides that the net income of a trade or business carried on
partly in and partly out of this state must be apportioned between this state
and other states. Minnesota Statutes, section
290.191,
provides general rules for the apportionment of the net income of a trade or
business carried on partly in and partly out of this state. Minnesota Statutes,
section
290.20,
provides that if the methods prescribed by Minnesota Statutes, section
290.191,
do not fairly reflect the net income allocable to this state, the commissioner
of revenue may require the use of another method. The nature of the air carrier
business requires use of a method other than those prescribed by Minnesota
Statutes, section
290.191.
Subp. 2.
Definitions.
The definitions in this subpart apply to this part.
A. "Air carrier" means a person engaged in
the paid carriage of passengers, cargo, or mail on regularly scheduled flights
of aircraft.
B. "Aircraft" means a
contrivance used or designed for the navigation of flight in the air.
C. "Airport-to-airport mileage" means the
mileage, as determined by the United States Department of Transportation,
between airports that are the point of origination and termination of a flight
in service.
D. "Cargo ton mile"
means the paid carriage of one ton of cargo for one mile.
E. "Departures" means departures of an
aircraft while operating a flight in revenue service.
F. "Fixed property and payroll" means all
property and payroll not defined as flight property or flight
payroll.
G. "Fleet type" means each
series within an aircraft model.
H.
"Flight in revenue service" means the flight of an aircraft for the paid
carriage of cargo, mail, or passengers.
I. "Flight payroll" means the payroll of
persons engaged as staff, such as pilots and flight attendants, on the air
carrier's aircraft.
J. "Flight
property" means aircraft ready for flight, spare engines, and spare parts
inventory that rotates into aircraft. Inventory that rotates is inventory that
consists of aircraft parts that are replacements for defective or worn parts
and may be placed into an aircraft for use more than one time.
K. "Mail ton mile" means the paid carriage of
one ton of mail for one mile.
L.
"Minnesota cargo ton mile" means the paid carriage of one ton of cargo for one
Minnesota plane mile.
M. "Minnesota
departures" means departures of aircraft from Minnesota facilities for flights
in revenue service.
N. "Minnesota
mail ton mile" means the paid carriage of one ton of mail for one Minnesota
plane mile.
O. "Minnesota passenger
ton mile" means the paid carriage of one ton of passengers for one Minnesota
plane mile.
P. "Minnesota plane
mile ratio" means the resultant ratio of Minnesota plane miles divided by total
plane miles. A separate plane mile ratio must be computed for each fleet
type.
Q. "Minnesota plane miles"
means the number of miles on completed flights in revenue service using
airport-to-airport mileage flown from a departure point in Minnesota to the
border of the state or flown from the border of Minnesota to a destination
within the state. Minnesota plane miles are calculated by multiplying the
airport-to-airport mileage by the percentage resulting from the division of the
Minnesota distance by total distance for each flight in revenue service. The
Minnesota plane miles of a flight in revenue service from a Minnesota departure
point to a Minnesota destination is the airport-to-airport mileage.
(1) Minnesota distance is the distance from
the Minnesota airport to the Minnesota border and the Minnesota border to the
Minnesota airport measured on a straight line between the originating airport
and the destination airport.
(2)
Total distance is the distance from the originating airport to the destination
airport on a straight line using the same map that was used to measure
Minnesota distance.
(3) Minnesota
distance and total distance must be measured on a conformal conic projection
map, used for aviation purposes, meeting the standards for accuracy of the
Global Navigation and Planning Chart, United States Defense Mapping Agency,
Lambert Conformal Conic Projection Map.
R. "Passenger ton mile" means the paid
carriage of one ton of passengers for one mile. For this purpose, each
passenger is considered to weigh 200 pounds.
S. "Plane miles" means the number of miles
flown on completed flights in revenue service using airport-to-airport mileage.
Plane miles must be accumulated on a fleet type basis.
Subp. 3.
Formula.
Except as provided in this part, the method of apportionment
prescribed in Minnesota Statutes, section
290.191,
governs the apportionment of the net income of air carriers by this
state.
Subp. 4.
Property factor.
Items A to D govern inclusion of property for purposes of the
property factor in Minnesota Statutes, section
290.191.
A. The denominator of the property factor
must include the property permitted to be included under Minnesota Statutes,
section
290.191,
subdivisions 9 and 10.
B. Fixed
property owned or rented and actually used by the air carrier in this state in
carrying on business in this state must be included in the numerator of the
property factor.
C. All flight
property owned or rented by the taxpayer must be included in the numerator of
the property factor by multiplying the original cost of the flight property by
the Minnesota plane mile ratio. This calculation must be made on a fleet type
basis.
D. Fixed and flight property
that is rented by an air carrier is valued at eight times the net annual
rental, as set forth in Minnesota Statutes, section
290.191,
subdivision 10, paragraph (e).
Subp.
5.
Payroll factor.
The payroll factor must be determined under Minnesota Statutes,
section
290.191,
subdivision 12, except that flight payroll must be included in the numerator by
multiplying the total flight payroll times the Minnesota plane mile ratio. This
calculation must be made on a fleet type basis.
Subp. 6.
Receipts factor.
Items A and B govern inclusion of receipts for purposes of the
receipts factor in Minnesota Statutes, section
290.191.
A. The denominator of the receipts factor
includes all receipts from the paid carriage of passengers, cargo, and
mail.
B. The numerator must be 85
percent of the sum of the amounts calculated in subitem (1) plus 15 percent of
the sum of the amounts calculated in subitem (2). The Minnesota passenger,
cargo, and mail revenue must be determined on a fleet type basis by:
(1)
(i)
multiplying the total gross revenue from the carriage of passengers by the
ratio of Minnesota passenger ton miles to total passenger ton miles;
(ii) multiplying the total gross revenue from
the carriage of cargo by the ratio of Minnesota cargo ton miles to total cargo
ton miles; and
(iii) multiplying
the total gross revenue from the carriage of mail by the ratio of Minnesota
mail ton miles to total mail ton miles;
(2)
(i)
multiplying the total gross revenue from the carriage of passengers by the
ratio of Minnesota departures to total revenue departures;
(ii) multiplying the total gross revenue from
the carriage of cargo by the ratio of Minnesota departures to total departures;
and
(iii) multiplying the total
gross revenue from the carriage of mail by the ratio of Minnesota departures to
total departures; and
(3) if records of either actual passenger
revenue, freight revenue, or mail revenue generated by fleet type are not
maintained, for purposes of subitems (1) and (2), passenger revenue, cargo
revenue, and mail revenue must be allocated to aircraft types based on the
ratios of the passenger ton miles, cargo ton miles, and mail ton miles of that
fleet type to total system passenger, cargo, and mail ton miles. The
computation for each fleet type is as follows:
| Passenger Ton Miles for that Fleet Type _____ |
X |
Total Passenger Revenue |
= |
Passenger Revenue for that Fleet Type |
| Total Passenger Ton Miles for all Fleet Types |
|
|
|
|
| Cargo Ton Miles for that Fleet Type _____ |
X |
Total Cargo Revenue |
= |
Cargo Revenue for that Fleet Type |
| Total Cargo Ton Miles for all Fleet Types |
|
|
|
|
| Mail Ton Miles for that Fleet Type _____ |
X |
Total Mail Revenue |
= |
Mail Revenue for that Fleet Type |
| Total Mail Ton Miles for all Fleet Types |
|
|
|
|
