Current through Register Vol. 6, March 22, 2024
(1) The
property factor shall be determined in accordance with
15-31-306, MCA, the payroll factor
in accordance with
15-31-308, MCA, and the receipts
factor in accordance with
15-31-310, MCA, except as modified
by this rule.
(2) For purposes of
this sub-chapter, the property factor will be determined as follows:
(a) In the case of rented studios, the net
annual rental rate shall include only the amount of the basic or flat rental
charge by the studio for the use of a stage or other permanent equipment such
as sound recording equipment and the like, except that additional equipment
rented from other sources or from the studio not covered in the basic or flat
rental charge and used for one week or longer (even though rented on a
day-to-day basis) shall be included. Lump-sum net rental payments for a period
that encompasses more than a single income year shall be assigned ratably over
the rental period.
(b) No value or
cost attributable to any outer-jurisdictional, film, or radio programming
property shall be included in the property factor at any time.
(3) The property factor
denominator will be determined as follows:
(a) All real property and tangible personal
property (other than outer-jurisdictional and film or radio programming
property), whether owned or rented, which is used in the business, shall be
included in the denominator of the property factor.
(b) Audio or video cassettes, discs, or
similar media containing film or radio programming and intended for sale or
rental by the taxpayer for home viewing or listening, shall be included in the
property factor at their original cost. To the extent that the taxpayer
licenses or otherwise permits others to manufacture or distribute such
cassettes, discs, or other media containing film or radio programming for home
viewing or listening, the value of said cassettes, discs, or other media shall
include the license, royalty, or other fees received by the taxpayer
capitalized at a rate of eight times the gross receipts derived therefrom
during the income year.
(c)
Outer-jurisdictional film and radio programming property shall be excluded from
the denominator of the property factor.
(d) With the exception of
outer-jurisdictional film and radio programming property, all real and tangible
personal property owned or rented by the taxpayer and used in Montana during
the tax period shall be included in the numerator of the property factor as
provided in
15-31-306, MCA.
(e) Outer-jurisdictional film and radio
programming property shall be excluded from the numerator of the property
factor.
(i) For example, XYZ television co.
has a total value of all of its property everywhere of $500,000,000, including
a satellite valued at $50,000,000 that was used to telecast programming into
Montana and $150,000,000 in film property of which $1,000,000 was located in
Montana the entire year. The total value of real and tangible personal
property, other than film programming property, located in Montana for the
entire income year was valued at $2,000,000. The movable and mobile property
described above was determined to be of a value of $4,000,000 and was used in
Montana for 100 days. The total value of property to be attributed to Montana
would be determined as follows:
Value of property permanently in Montana: |
$2,000,000 |
Value of mobile and movable property: |
(100/365 or. 2739 x $4,000,000):
| 1,095,600 |
Total value of property to be included in Montana's
property factor numerator (outer-jurisdictional and film property excluded)
: | $3,095,600 |
Total value of property to be used in the denominator
($500,000,000-$200,000,000): | $300,000,000 |
Total property factor ($3,095,600/$300,000,000)
: | 1.03% |
(4) For purposes of this sub-chapter, the
payroll factor will be determined as follows:
(a) The payroll factor denominator shall
include all compensation, including residual and profit participation payments,
paid to employees during the income year, including that paid to directors,
actors, newscasters, and other talent in their status as employees.
(b) The payroll factor numerator
(compensation for all employees) shall be attributed to the state or states as
may determined by the application of the provisions of
15-31-308, MCA.
(5) For purposes of this
subchapter, the receipts factor will be determined as follows:
(a) The receipts factor denominator shall
include the total gross receipts derived by the taxpayer from transactions and
activity in the regular course of its trade or business, except receipts
excluded under ARM
42.26.263.
(b) The numerator of the receipts factor
shall include all gross receipts of the taxpayer from sources within Montana
including, but not limited to, the following:
(i) gross receipts, including advertising
revenue, from television film or radio programming in release to or by
television and radio stations located in Montana;
(ii) gross receipts, including advertising
revenue, from television film or radio programming in release to or by a
television station (independent or unaffiliated) or network of stations for
broadcast shall be attributed to Montana in the ratio ("audience factor") that
the audience for such station (or owned and affiliated stations in the case of
networks) located in Montana bears to the total audience for such station (or
owned and affiliated stations in the case of networks). The audience factor for
television or radio programming shall be determined by the ratio that the
taxpayer's in-state viewing (listening) audience bears to its total viewing
(listening) audience. Such audience factor shall be determined either by
reference to the books and records of the taxpayer or by reference to published
rating statistics, provided the method used by the taxpayer is consistently
used from year to year for such purpose and fairly represents the taxpayer's
activity in Montana;
(iii) gross
receipts from film programming in release to or by a cable television system
shall be attributed to Montana in the ratio ("audience factor") that the
subscribers for such cable television system located in Montana bears to the
total subscribers of such cable television system. If the number of subscribers
cannot be accurately determined from the books and records maintained by the
taxpayer, such audience factor shall be determined on the basis of the
applicable year's subscription statistics located in published surveys,
provided that the source selected is consistently used from year to year for
that purpose; and
(iv) receipts
from the sale, rental, licensing, or other disposition of audio or video
cassettes, discs, or similar media intended for home viewing or listening shall
be included in the receipts factor as provided in ARM
42.26.257.
AUTH:
15-1-201,
15-31-313, MCA; IMP:
15-1-601,
15-31-301,
15-31-302,
15-31-303,
15-31-304,
15-31-305,
15-31-306,
15-31-307,
15-31-308,
15-31-309,
15-31-310,
15-31-311,
15-31-312,
MCA