Section 81-03-05.2-06 - Failure to comply with water's edge election1. If a taxpayer fails to make a valid water's edge election, the taxpayer will be prohibited from using this method to apportion its income for the year in question. If this occurs, the taxpayer shall determine its income and resulting tax liability pursuant to North Dakota Century Code chapters 57-38, 57-38.1, and 57-59, which chapters include reporting on a worldwide combined basis. 2. A taxpayer's failure to file a spreadsheet or to correct deficiencies in its spreadsheet will constitute a failure to file a return. If this occurs, the tax liability computed under the water's edge method will be subject to penalty and interest pursuant to North Dakota Century Code section 57-38-45. 3. If a taxpayer fails to comply with the conditions in North Dakota Century Code section 57-38.4-02 and this chapter, the commissioner may rescind the taxpayer's water's edge election for the entire election period. If this occurs, the commissioner will require the taxpayer to apportion its income for the period to which the election applied pursuant to worldwide combination or any other method of reporting permitted under North Dakota Century Code chapter 57-38, 57-38.1, or 57-59. N.D. Admin Code 81-03-05.2-06
General Authority: NDCC 57-38-56
Law Implemented: NDCC 57-38, 57-38.1, 57-38.4, 57-38-45