Administrative Rules of Montana
Department 42 - REVENUE
Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES
Subchapter 42.26.3 - Water's-edge
Rule 42.26.312 - TREATMENT OF DIVIDENDS FOR PURPOSES OF A WATER'S-EDGE COMBINED RETURN
Universal Citation: MT Admin Rules 42.26.312
Current through Register Vol. 6, March 22, 2024
(1) Eighty percent of the dividends apportionable under this rule are to be excluded from income subject to apportionment where:
(a) dividends received
from foreign corporations, taxable for federal purposes, are considered to be
income subject to apportionment;
(b) amounts included in income under sections
951 through 962 and 964 of the IRC are considered taxable foreign dividends;
(c) the after-tax net income of
United States corporations excluded from eligibility as affiliated corporations
under ARM 42.26.311 and possession
corporations defined in sections 931 through 934 and 936 of the IRC, is
considered to be a dividend for purposes of this rule;
(i) In calculating the after tax net income,
where the corporation is included in a federal consolidated income tax return,
the consolidated tax liability shall be apportioned among the members of the
group in accord with the ratio which that portion of the consolidated taxable
income attributable to each member of the group having positive taxable income,
bears to the total consolidated taxable income of all companies in the
consolidated group having positive taxable income. For purposes of this
calculation, the consolidated tax liability shall be the tax liability
calculated on the federal consolidated income tax return after application of
federal tax credits.
(ii) Where
such corporations have no net income for the taxable year in question, the
amount to be included as dividends received from corporations outside the
United States shall equal zero.
(d) dividends between members in the
water's-edge combinable group are eliminated from the calculation of
apportionable income;
(e) deemed
dividend distributions pursuant to section 78 of the IRC are excluded from the
calculation of apportionable income; and
(f) the limited inclusion of dividend income
specified in this rule is in lieu of attempts to allocate expenses attributable
to the generation of such dividend income. For apportionment factor purposes
only the dividend income considered to be apportionable income shall be
included in the receipts factor numerator or denominator as
appropriate.
AUTH: 15-31-501, MCA; IMP: 15-31-325, MCA
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