| Notice Filed with SOS |
04/12/2017 |
| Rule |
ProposedRuleAttach2017-00144.doc |
| Additional Information |
AddInfoAttach2017-00144.doc |
| Statutory Authority |
The statutory basis for this rule is § 39-21-112(1), § 39-22-301, § 39-22-303, and § 39-22-305, C.R.S. |
| Description of Subjects/Issues |
The purpose of this amendment is to clarify how an affiliated group required to file a combined report or choosing to file a consolidated return shall apportion and allocate their income if the commercial activities of the affiliated group require the use of more than one apportionment methodology. There was no previous guidance in the rule as to how to combine two apportionment methodologies. The Department also included a conclusive presumption in the rule. This presumption states that a commercial activity is conclusively de minimis if the sum of the gross sales of that commercial activity that requires the use of a different apportionment methodology amounts to less than one percent of the taxpayer’s total gross sales. In such cases, the taxpayer must apportion the income from the de minimis activity in the same ratio that it apportions its gross sales pursuant to the sales factor for the remainder of the commercial activity. The Department also states that a commercial activity that requires the use of a different apportionment methodology may be de minimis if the gross sales of the commercial activity amounts to less than five percent of the taxpayer’s total gross sales. |
| Purpose/Objective of Rule |
see attachment |
| Basis And Purpose |
BasisAndPurposeAttachment2017-00144.doc
|
| Submitted in response to issues raised by COLS/OLLS? |
No
|
| Is this rule adopted in response to recent legislation? |
No
|
| Hearing Date |
05/17/2017 |
| Hearing Time |
09:00 AM |
| Hearing Location |
1375 Sherman Rm 127 |
| Contact Name |
Phil Horwitz |
| Contact Title |
Director, Tax Policy Analysis |
| Contact Telephone |
303.205.8422 |
| Contact email |
phillip.horwitz@state.co.us |