39-22-303.5–9 Alternative Apportionment.

The provisions of this rule apply to income tax years commencing on or after January 1, 2009, but prior to January 1, 2019. (1) Section 39-22-303.5(7)(b), C.R.S., permits a departure from the allocation and apportionment provisions of § 39-22-303.5, C.R.S., (hereinafter “303.5”) only in limited and specific cases. Paragraph (7)(b) of 303.5 may be invoked only in specific cases where unusual fact situations (which ordinarily will be unique and nonrecurring) produce incongruous results under the apportionment and allocation provisions contained in section 303.5. (2) In the case of certain industries, the general rules under section 303.5 in respect to the apportionment formula do not set forth appropriate procedures for determining the apportionment factors. Nothing in § 39-22-303.5(7)(b), C.R.S., or in this Rule 39-22-303.5–9 shall preclude the executive director from establishing appropriate procedures under 303.5 and paragraph (7)(a) of 303.5 for determining the apportionment factors for each such industry, but such procedures shall be applied uniformly. (3) In the case of certain taxpayers, the general rules under §§ 39-22-303 and 303.5, C.R.S. do not set forth appropriate procedures for determining income or the apportionment factors. Nothing in § 39-22-303.5(7)(b), C.R.S., or in this Rule 39- 22-303.5–9 shall preclude the executive director from distributing or allocating income and deductions under § 39-22-303(6), C.R.S. (4) Special rules. (a) Where substantial amounts of gross receipts arise from an incidental or occasional sale of a fixed asset used in the regular course of the taxpayer's trade or business, such gross receipts shall be excluded from the sales factor. (b) Insubstantial amounts of gross receipts arising from incidental or occasional transactions or activities may be excluded from the sales factor unless such exclusion would materially affect the amount of income apportioned to this state. (c) Where business income from intangible property cannot readily be attributed to any particular income-producing activity of the taxpayer, and such income cannot be assigned to the numerator of the sales factor for any state, such income shall be excluded from the denominator of the sales factor. (d) Where the income-producing activity in respect to business income from intangible personal property can be readily identified, such income is included in the denominator of the sales factor and, if the income- producing activity occurs in this state, in the numerator of the sales factor as well.