Colo. Code Regs. 39-22-303.6-5
Current through Register Vol. 47, No. 23, December 10, 2024
Rule 39-22-303.6-5 - Calculating the Receipts FactorBasis and Purpose. The bases of this rule are §§ 39-21-112, 39-22-301, 39-22-303, and 39-22-303.6, C.R.S. The purpose of this rule is to provide guidance for determining which gross receipts are included in a taxpayer's receipts factor. Consistent with the General Assembly's adoption of § 39-22-303.6, C.R.S., these rules are intended to conform the state's income tax laws to the Multistate Tax Commission's model statute and regulation except when those model provisions are inconsistent with Colorado statute. See 2018 Colo. Sess. Laws, ch. 369, § 1(2).
(1)General Rule. All apportionable income of each trade or business of the taxpayer shall be apportioned to this state by use of the apportionment formula set forth in § 39-22-303.6(4), C.R.S. (a)Denominator. The denominator of the receipts factor shall include the gross receipts derived by the taxpayer from transactions and activity in the regular course of its trade or business, except gross receipts excluded under § 39-22-303.6, C.R.S., and these rules.(b)Numerator. The numerator of the receipts factor shall include the gross receipts attributable to Colorado and derived by the taxpayer from transactions and activity in the regular course of its trade or business, except gross receipts excluded under § 39-22-303.6, C.R.S., and these rules.(c)Exceptions. In some cases, certain gross receipts should be disregarded in determining the receipts factor in order that the apportionment formula will operate fairly to apportion to Colorado the income of the taxpayer's trade or business.(d) The receipts factor for an affiliated group of C corporations filing a combined return shall not include receipts from property delivered in Colorado by an includable C corporation that is not doing business in Colorado.(e)Consistency in Reporting.(i)Numerator and Denominator Consistency. In filing returns with Colorado, the taxpayer must use the same methodology in calculating both the numerator and the denominator of the receipts factor.(ii)Year-to-Year Consistency. In filing returns with Colorado, if the taxpayer departs from or modifies the basis for excluding or including gross receipts in the receipts factor used in returns for prior years, the taxpayer shall disclose in the return for the current year the nature and extent of the modification.(iii)State-to-State Consistency. If the returns or reports filed by the taxpayer with all states to which the taxpayer reports under § 39-22-303.6, C.R.S., Article IV of the Multistate Tax Compact, or the Uniform Division of Income for Tax Purposes Act are not uniform in the inclusion or exclusion of gross receipts, the taxpayer shall disclose in its return to Colorado the nature and extent of the variance.(2)Mediation. Whenever a taxpayer is subjected to different sourcing methodologies regarding intangibles or services by the Department and one or more other state taxing authorities, the taxpayer may petition for, and the Department may participate in, and encourage the other state taxing authorities to participate in, non-binding mediation in accordance with the alternative dispute resolution regulations promulgated by the Multistate Tax Commission from time to time, regardless of whether all the state taxing authorities are members of the Multistate Tax Compact.Colorado Register, Vol 37, No. 14. July 25, 2014, effective 8/14/201437 CR 18, September 25, 2014, effective 10/15/201437 CR 19, October 10,2014, effective 10/30/201437 CR 22, November 25, 2014, effective 12/16/201438 CR 04, February 25, 2015, effective 3/17/201538 CR 07, April 10, 2015, effective 4/30/201538 CR 11, June 10, 2015, effective 6/30/201538 CR 22, November 25, 2015, effective 12/15/201538 CR 24, December 25, 2015, effective 1/14/201638 CR 24, December 25, 2015, effective 1/19/201639 CR 01, January 10, 2016, effective 1/30/201639 CR 16, August 25, 2016, effective 9/14/201640 CR 08, April 25, 2017, effective 5/15/201740 CR 12, June 25, 2017, effective 7/15/201740 CR 16, August 25, 2017, effective 9/14/201740 CR 23, December 10, 2017, effective 1/1/201841 CR 14, July 25, 2018, effective 8/14/201841 CR 20, October 25, 2018, effective 11/14/201842 CR 02, January 25, 2019, effective 12/18/201842 CR 02, January 25, 2019, effective 12/18/2018, expires 4/17/201942 CR 06, March 25, 2019, effective 4/14/201943 CR 04, February 25, 2020, effective 3/16/202043 CR 13, July 10, 2020, effective 6/2/202043 CR 17, September 10, 2020, effective 9/30/202044 CR 03, February 10, 2021, effective 3/2/202144 CR 07, April 10, 2021, effective 4/30/202144 CR 08, April 25, 2021, effective 5/15/202145 CR 01, January 10, 2022, effective 1/30/202245 CR 04, February 25, 2022, effective 3/17/202245 CR 05, March 10, 2022, effective 3/30/202246 CR 11, June 10, 2023, effective 5/2/202346 CR 09, May 10, 2023, effective 5/30/2023