Section Rev 304.02 - Property Factor(a) The property factor shall include: (1) All the real and tangible personal property, as defined in Rev 301.26;(2) Property that is used, is available for use, or is capable of being used, during the taxable period in the regular course of the trade or business of the business organization;(3) Property used in the regular course of business until its permanent withdrawal from use;(4) Property, in transit with the property being included in the numerator of the destination state; and(5) The value of moveable or mobile property, such as construction equipment and common carrier vehicles, with the value being determined for purposes of the property factor on the total time or miles within a state during the period.(b) Property or equipment under construction during the tax period, except inventoriable goods in process, shall be excluded from the property factor until such property is used or available for use by the business organization in its regular trade or business.(c) Property, other than inventory, owned by the business organization shall be valued at its original cost and be the basis of the property for federal income tax purposes at the time of acquisition, prior to any federal adjustments, and adjusted by subsequent sale, exchange, abandonment, or other such disposition.(d) Inventory, owned by the business organization, shall be included in the property factor in accordance with the valuation method used for federal income tax purposes.(e) Property rented by a business organization shall be valued at 8 times the net annual rental rate.(f) The net annual rental rate shall be the annual rent paid or accrued by the business organization less the aggregate annual sub-rental rates accrued or received from sub-tenants.(g) Rent shall be the amount payable for the use of real or tangible property whether designated as a fixed sum or as a percentage of sales or profits, and includes any additional amounts due in lieu of rent such as interest and taxes which are required by the terms of the lease.(h) Business organizations renting property in the regular course of a trade or business shall not deduct such rental income as sub-rents.(i) Business organizations utilizing combined reporting shall:(1) Determine the property includible in the property factor after having eliminated all of the inter-group activity; and(2) Eliminate any intergroup profits from the valuation of property included in the property apportionment factor.(j) The beginning and ending average value of owned property shall be used for the property factor unless matrial distortions of the property factor are caused by:(1) Fluctuations in values existing during the period; or(2) The acquisition or disposition of significant property during the period.(k) Material distortions shall exist in instances where the property factor computed using monthly averages is 25% greater or lesser than the property factor computed using the beginning and ending average.(l) Business organizations having material distortions caused by the use of a beginning and ending average value shall calculate the value of their property for apportionment purposes using a monthly average.N.H. Code Admin. R. Rev 304.02
#2012, eff 5-5-82; ss by #2722, eff 5-23-84; ss by #4192, eff 12-23-86; amd by #4438, eff 6-22-88; ss by #5490, eff 10-19-92; amd by #5910, eff 10-14-94; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06 (formerly Rev 304.03 )
Amended byVolume XXXV Number 06, Filed February 12, 2015 , Proposed by #10758, Effective 1/16/2015, Expires1/16/2025.Amended by Volume XXXVII Number 37, Filed September 14, 2017, Proposed by #12361, Effective 8/9/2017, Expires 8/9/2027.