(2) The property factor.
(a) Property valuation. Owned property shall
be valued at its original cost and property rented from others shall be valued
at eight (8) times the net annual rental rate in accordance with Section
7-4-12
NMSA 1978. Railroad cars owned and operated by other railroads and temporarily
used by the taxpayer in its business and for which a per diem or mileage charge
is made are not included in the property factor as rented property. Railroad
cars owned and operated by the taxpayer and temporarily used by other railroads
in their business and for which a per diem charge is made by the taxpayer are
included in the property factor of the taxpayer.
(b) General definitions. The following
definitions are applicable to the numerator and denominator of the property
factor.
(i) "Original cost" is deemed to be
the basis of the property for federal income tax purposes (prior to any federal
income tax adjustments except for subsequent capital additions, improvements
thereto or partial dispositions); or, if the property has no such basis, the
valuation of such property for interstate commerce commission purposes. If the
original cost of property is unascertainable under the foregoing valuation
standards, the property is included in the property factor at its fair market
value as of the date of acquisition by the taxpayer.
(ii) "Rent" does not include the per diem and
mileage charges paid by the taxpayer for the temporary use of railroad cars
owned or operated by another railroad.
(iii) The "value" of owned real and tangible
personal property shall mean its original cost.
(iv) "Average value" of property means the
amount determined by averaging the values at the beginning and ending of the
income tax year, but the department may require the averaging of monthly values
during the income year or such averaging as necessary to effect properly the
average value of the railroad's property.
(v) The "value" of rented real and tangible
personal property means the product of eight (8) times the net annual rental
rate.
(vi) "Net annual rental rate"
means the annual rental rate paid by the taxpayer less any annual rental rate
received by the taxpayer from subrentals.
(vii) "Property used during the income year"
includes property which is available for use in the taxpayer's trade or
business during the income year.
(viii) A "locomotive-mile" is the movement of
a locomotive (a self-propelled unit of equipment designed solely for moving
other equipment) a distance of one mile under its own power.
(ix) A "car-mile" is a movement of a unit of
car equipment a distance of one mile.
(c) The denominator and numerator of the
property factor.
(i) The denominator of the
property factor shall be the average value of all of the taxpayer's real and
tangible personal property owned or rented and used during the income year. The
numerator of the property factor shall be the average value of the taxpayer's
real and tangible personal property owned or rented and used in this state
during the income year.
(ii) In
determining the numerator of the property factor, all property except mobile or
movable property such as passenger cars, freight cars, locomotives and freight
containers which are located within and without this state during the income
year shall be included in the numerator of the property factor in accordance
with Sections
7-4-11
through
7-4-13
NMSA 1978, inclusive, and Parts 3.5.11 through 3.5.13 NMAC,
inclusive.
(iii) Mobile or movable
property such as passenger cars, freight cars, locomotives and freight
containers which are located within and without this during the income year
shall be included in the numerator of the property factor in the ratio which
"locomotive-miles" and "car-miles" in the state bear to the total
everywhere.