Minnesota Administrative Rules
Agency 181 - Revenue Department
Chapter 8106 - RAILROAD VALUATION
Part 8106.0500 - ALLOCATION
Current through Register Vol. 48, No. 39, March 25, 2024
Subpart 1. In general.
After the estimated unit value of the railroad property has been determined, the portion of value which is attributable to Minnesota must be established. This is accomplished through the use of certain allocation factors. Each of the factors in the allocation method shows a relationship between the railroad system operations in all states and its Minnesota operations. These relationships are expressed in percentage figures. These percentages are then added and an average is computed. The resulting average of the factors, multiplied by the unit value, yields the Minnesota portion of the railroad property which will, after the adjustments described in parts 8106.0600 and 8106.0800, be subject to ad valorem tax in Minnesota.
Subp. 2. Allocation factors.
The factors to be considered in making allocations of unit values to Minnesota for railroad companies are:
The following example illustrates the allocation method to be applied to the unit value of railroad property.
| XYZ Railroad | |||
| Minnesota miles of track | 100 | ||
| Total miles of track | _____500 | = | 20% |
| Minnesota ton miles of revenue freight | 2,200,000 | ||
| Total ton miles of revenue freight | _____ 9,000,000 | = | 24% |
| Minnesota gross transportation revenue | $10,000,000 | ||
| Total gross transportation revenue | _____ $40,000,000 | = | 25% |
| Minnesota cost of road property | 2,990,000 | ||
| Total cost of road property | _____ 13,000,000 | = | 23% |
| Total | 92% | ||
| Minnesota Percent of Unit Value | 23% | ||
| Total Unit Value ($22,212,500 x 23%) = | |||
| Minnesota Portion of Unit Value | $5,108,875 |
Statutory Authority: MS s 270.84; 270C.06
