North Dakota Administrative Code
Title 81 - Tax Commissioner
Article 81-03 - Income Taxes and Privilege Taxes Based on Income
Chapter 81-03-05.2 - Water's Edge Method
Section 81-03-05.2-05 - Domestic disclosure spreadsheet

Universal Citation: ND Admin Code ยง 81-03-05.2-05

Current through Supplement No. 394, October, 2024

1. A taxpayer electing to use the water's edge method shall file a domestic disclosure spreadsheet if the affiliated corporations as a group have:

a. Property, payroll, or sales in foreign countries exceeding ten million dollars.

b. Assets exceeding two hundred fifty million dollars.

2. The domestic disclosure spreadsheet must be filed the first year the conditions set forth in subsection 1 of section 81-03-05.2-05 are met and every third year thereafter provided the conditions set forth in subsection 1 of section 81-03-05.2-05 continue to be met.

3. A domestic disclosure spreadsheet must include the following:

a. A list of the corporations in the water's edge group and any corporation in which more than twenty percent of the voting stock is, either directly or indirectly, owned or controlled by a member of the water's edge group.

b. The following identifying information for each corporation listed in subdivision a:
(1) Federal identification number.

(2) Address.

(3) Percentage of voting stock, that is either directly or indirectly owned or controlled by each member of the water's edge group.

c. The following information for each corporation in the water's edge group:
(1) Primary business locations.

(2) Primary business activities.

(3) Country of incorporation.

(4) Dates of acquisition or disposition of the ownership interest.

(5) For each state which assesses a tax on, according to, or measured by net income, a schedule detailing the tax liability and the computations used to allocate or apportion the corporation's income to each state in which the corporation is taxable. The details which must be disclosed on the aforementioned schedule include:
(a) Whether the liability was computed on a single entity basis or pursuant to a combined report.

(b) The entities included in the combined report.

(c) The federal taxable income for each entity whose income was included in determining the amount of income that was allocated and apportioned to the state.

(d) The amount of income apportioned to the state, the formula used to apportion the income, and the amount of property, payroll, and sales included in the formula used to apportion the income.

(e) The amount of income allocated to the state.

(f) The total amount of income not subject to apportionment by formula under the rules of the state.

(g) The amount of tangible personal property sales made or delivered to customers within the state.

(6) For each state which does not assess a tax on, according to, or measured by income, a schedule disclosing the following information for each corporation which has a taxable presence in the state:
(a) The federal taxable income for the corporation or for the federal consolidated filing group of which the corporation is a member.

(b) The amount of property, payroll, and sales that would be assigned to the state under North Dakota Century Code chapter 57-38.1 and the rules adopted pursuant thereto.

(c) The amount of tangible personal property sales made or delivered to customers within the state.

d. A copy of pages one through four of the federal income tax return that was filed with the internal revenue service for each corporation listed in subdivision c.

4. The spreadsheet information must be filed on the forms provided by the commissioner. Data not submitted on the preapproved forms will be deemed incomplete.

5. If the information required to be reported on the spreadsheet is not available whenthe return is filed, a taxpayer may file the spreadsheet within six months after the due date of the return, including any extensions. If the aforementioned time deadlines cannot be met, a taxpayer shall file a written request for an extension of time with the commissioner within six months after the due date of the return, including any extensions. This request which will be deemed filed on the date it is sent by certified mail must state the grounds for the request. Within a reasonable time after receiving the request, the commissioner shall notify the taxpayer as to whether the request for additional time is granted. However, the commissioner will not grant an extension of time that exceeds one hundred twenty days.

6. A spreadsheet will be deemed complete when filed unless the commissioner notifies the taxpayer, within one hundred eighty days after the spreadsheet was filed, that the spreadsheet requirements have not been met. This notice must be sent by certified mail and it must inform the taxpayer as to why the spreadsheet was not properly completed. A taxpayer shall correct the deficiencies in its spreadsheet within ninety days after receiving the aforementioned notice of deficiency. If the ninety-day deadline cannot be met, a taxpayer shall file a written request for an extension of time with the commissioner within ninety days after receiving the notice of deficiency. This request which will be deemed filed on the date it is sent by certified mail must state the grounds for the request. Within a reasonable time after receiving the request, the commissioner shall notify the taxpayer as to whether the request for additional time is granted.

General Authority: NDCC 57-38-56

Law Implemented: NDCC 57-38.4-02

Disclaimer: These regulations may not be the most recent version. North Dakota may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.