North Dakota Administrative Code
Title 81 - Tax Commissioner
Article 81-03 - Income Taxes and Privilege Taxes Based on Income
Chapter 81-03-05.3 - Worldwide Method of Reporting
Section 81-03-05.3-03 - Elements of worldwide combined report

Universal Citation: ND Admin Code ยง 81-03-05.3-03

Current through Supplement No. 394, October, 2024

1. A taxpayer that is required to file using the worldwide method of reporting shall include the income and apportionment factors of the following unitary corporations in its combined report:

a. A parent corporation.

b. Any corporation incorporated in the United States.

c. Any corporation incorporated in a possession of the United States as described in Internal Revenue Code sections 931 through 936.

d. Any domestic international sales corporation as described in Internal Revenue Code sections 991 through 994.

e. Any foreign sales corporation as described in Internal Revenue Code sections 921 through 927.

f. Any export trade corporation as described in Internal Revenue Code sections 970 through 972.

g. Any foreign corporation which derived gain or loss from disposing of a United States real property interest but only to the extent the gain or loss was recognized under Internal Revenue Code section 897.

h. Any foreign corporation.

2. The factors used to apportion the income of the worldwide group must be determined pursuant to chapter 81-03-09 and North Dakota Century Code chapters 57-38.1 and 57-59, and the following subdivisions:

a. Transactions between members of the worldwide group must be eliminated.

b. Transactions between any member of the worldwide group and a corporation that has been excluded from the group must be included.

c. The property, payroll, and sales of a corporation that has been excluded from the worldwide combined report must not be included in the apportionment factors of the group.

d. When apportionable income includes income from a corporation's ownership interest in a general partnership, the corporate partner's share of the partnership's property, payroll, and sales must be included in the group's apportionment factors.

3. Income for the worldwide group must be computed using one of the following methods:

a. Method one.
(1) Begin with federal taxable income of the corporations included in the combined report which are required to file a federal income tax return.

(2) Add book income adjusted to conform to the provisions of the Internal Revenue Code of the corporations included in the combined report which are not required to file a federal income tax return.

(3) Eliminate transactions between members of the worldwide group.

(4) Add or subtract the adjustments provided for in North Dakota Century Code section 57-38-01.3.

(5) Add or subtract nonbusiness income and nonbusiness losses net of related expenses, unless allocable to North Dakota.

b. Method two.
(1) Begin with federal taxable income of the corporations included in the combined report which are required to file a federal income tax return.

(2) Add book income of those corporations included in the combined report which are not required to file a federal income tax return.

(3) Eliminate transactions between members of the worldwide group.

(4) Add or subtract the adjustments provided for in North Dakota Century Code section 57-38-01.3.

(5) Add or subtract nonbusiness income and nonbusiness losses net of related expenses, unless allocable to North Dakota.

General Authority: NDCC 57-38-56

Law Implemented: NDCC 57-38, 57-38.1, 57-59

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.
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