Section 12C-1.0152 - Other Methods of Apportionment(1)(a) A departure from the applicable method of apportionment required under the provisions of section 220.15 or 220.151, F.S., shall be permitted only where the method does not accurately and fairly reflect business activity in Florida. An alternative method may not be invoked, either by the Department of Revenue or the taxpayer, merely because it reaches a different apportionment percentage than the regularly applicable formula. However, if the applicable formula will lead to a grossly distorted result in a particular case, a fair and accurate alternative method is appropriate (see Norfolk and Western Railway Co. v. Missouri State Tax Commission, 390 U.S. 317, 88 S. Ct. 995, 19 L. Ed. 2d 1201 (1968), which is incorporated by reference in rule 12C-1.0511, F.A.C.).(b) A taxpayer seeking to utilize an alternative apportionment method must show by clear and cogent evidence that the regularly applicable formula would result in taxation of extraterritorial values (see Butler Bros. v. McColgan, 315 U.S. 501, 62 S.Ct. 701, 86 L. Ed. 991 (1942), which is incorporated by reference in rule 12C-1.0511, F.A.C.). This can be shown only if the regularly applicable formula is demonstrated to operate unreasonably and arbitrarily in apportioning to Florida a percentage of income which is out of all proportion to the business transacted in Florida and does not accurately and fairly reflect business activity in Florida (see Hans Rees' Sons, Inc. v. North Carolina ex rel Maxwell, 283 U.S. 123, 51 S. Ct. 385, 75 L. Ed 879 (1931), which is incorporated by reference in rule 12C-1.0511, F.A.C.).(2) The party seeking to use an alternative formula must prove that the alternative formula fairly and accurately apportions income to Florida based upon business activity in Florida.(3) A departure from the regularly applicable apportionment method will be authorized only in limited and specific cases where unusual fact situations (which ordinarily will be unique and nonrecurring) produce a result that is incongruous with the results of previous tax years under the regularly applicable apportionment method.(4) A taxpayer must petition the Department for a departure from the required apportionment method by filing, on or before the due date for filing of the return for the taxable year, with extension, either: a written request for a technical assistance advisement under section 213.22, F.S., and rule chapter 12-11, F.A.C.; or, a petition for a declaratory statement under section 120.565, F.S. (a) The taxpayer must file the request or petition with Technical Assistance and Dispute Resolution, P.O. Box 7443, Tallahassee, Florida 32314-7443.(b) The taxpayer's request or petition must include a summary of the evidence to support the taxpayer's contention that the applicable apportionment formula results in taxation of extraterritorial values and to demonstrate that the regular formula operates to unreasonably and arbitrarily attribute income to Florida far out of proportion to the business transacted in Florida. The taxpayer must also furnish evidence that the use of an alternative method fairly and accurately apportions income to Florida.Fla. Admin. Code Ann. R. 12C-1.0152
Rulemaking Authority 213.06(1), 220.51 FS. Law Implemented 220.15, 220.151, 220.152 FS.
New 5-17-94, Amended 3-18-96, 3-13-00.New 5-17-94, Amended 3-18-96, 3-13-00.