N.D. Admin. Code 81-03-09-11

Current through Supplement No. 394, October, 2024

Section 81-03-09-11 - Taxable in another state - In general

Under both North Dakota Century Code section 57-38.1-02 and article IV(2) of North Dakota Century Code section 57-59-01, the taxpayer is subject to the allocation and apportionment provisions of North Dakota Century Code chapter 57-38.1 and article IV of North Dakota Century Code section 57-59-01 if it has income from business activity that is taxable both within and without this state. A taxpayer's income from business activity is taxable without this state if such taxpayer, by reason of such business activity, that is, the transactions and activity occurring in the regular course of a particular trade or business, is taxable in another state within the meaning of North Dakota Century Code section 57-38.1-03 or article IV(3) of North Dakota Century Code section 57-59-01. A taxpayer is taxable within another state if it meets either one of two tests.

1. If by reason of business activity in another state the taxpayer is subject to one of the types of taxes specified in subsection 1 of North Dakota Century Code section 57-38.1-03 or article IV(3)(a) of North Dakota Century Code section 57-59-01; namely, a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business, or a corporate stock tax; or

2. If by reason of such business activity another state had jurisdiction to subject the taxpayer to a net income tax, regardless of whether or not the state imposes such a tax on the taxpayer.

A taxpayer is not taxable in another state with respect to a particular trade or business merely because the taxpayer conducts activities in such other state pertaining to the production of nonbusiness income or business activities relating to a separate trade or business.

General Authority: NDCC 57-38-56

Law Implemented: NDCC 57-38.1-03, 57-59-01 (art.IV(3))

N.D. Admin Code 81-03-09-11