Rhode Island Code of Regulations
Title 280 - Department of Revenue
Chapter 20 - Division of Taxation
Subchapter 25 - Business Corporation Tax
Part 9 - Apportionment of Net Income (280-RICR-20-25-9)
Section 280-RICR-20-25-9.12 - Variation of Method of Apportioning Income

A. Tax Administrator's Authority to Vary Methods of Apportionment. If at any time the Tax Administrator, on his or her own motion or acting upon a complaint by a taxpayer, determines that the methods of apportionment provided are inequitable either to the state or to the taxpayer, the tax administrator, after affording the taxpayer reasonable opportunity to be heard, may apply any other method of apportionment that is equitable and, if necessary, shall re-determine the tax.

B. Disputes Regarding Applicable Methods of Apportionment. When a dispute arises between the Tax Administrator and a taxpayer with respect to the method of apportionment applied, both the taxpayer and the Tax Administrator shall be entitled to initiate an appeals process through an independent arbitrator who has specific expertise in state tax matters. In all cases, the arbitration process must be mutually agreed to by the parties, the arbitrator shall be selected by the taxpayer from a list of independent arbitrators approved by the American Arbitration Association, and all costs and fees of the arbitral tribunal shall be borne by the taxpayer, regardless of the outcome of the arbitration on the merits. Legal fees for the arbitration shall be borne separately by the respective parties, unless the outcome of the arbitration is in favor of the Tax Division, in which case all legal fees shall be borne by the taxpayer. For purposes of the independent appeals process described in this provision, the various methods of apportionment are set forth in §§ 9.8, 9.9, 9.1 and 9.11 of this Part. The independent appeals process described in this provision shall be available only for disputes where proper selection of the method of apportionment to be applied to the taxpayer, in any given year, is the sole issue in dispute. The independent appeals process is not intended to resolve disputes concerning composition of a combined group, determination of combined group net income, the actual determination of apportionment factors, or to any other matter arising before or after selection of the taxpayer's method of apportionment. The decision resulting from the independent appeals process shall not prohibit either party from pursuing any legal remedy otherwise available if the issue is not resolved as a result of the appeal process. The limited arbitration option set forth in this § 9.12 of this Part is not a necessary step for pursuing tax appeals. The decision resulting from the independent appeals process can be used as evidence.