(a) If a taxpayer is taxable both within and without the state, a tax shall be imposed on the base as provided in section 12-219, apportioned on the following basis: (1) The average monthly value of all investments other than stock of private corporations, and all cash, credits and other intangible assets of the taxpayer shall be divided between (A) those having a tax situs within the state and (B) those having a tax situs without the state; (2) the average monthly net book value of the tangible property held and owned by the taxpayer during the income year shall be divided between (A) that held within the state and (B) that held without the state; the numerator of the allocation fraction shall consist of the sum of subparagraph (A) of subdivision (1) of this subsection and subparagraph (A) of subdivision (2) of this subsection, and the denominator shall consist of the sum of subdivisions (1) and (2) of this subsection; which allocation fraction shall be multiplied by the amount of the unallocated tax base as computed under the terms of said section 12-219 to obtain the tax base for such taxpayer. For the purposes of this section, the intangible assets of a company having its principal place of business within the state shall be deemed to have a tax situs within the state unless it can be clearly established that some or all of such assets are held in connection with business conducted during the income year without the state, and a similar rule shall apply to intangible assets of a company having its principal place of business without the state. Such assets shall be reported by the taxpayer at the valuations at which they appear upon its books, provided the Commissioner of Revenue Services shall exercise the powers with respect to such valuations granted him under the terms of said section 12-219. For the purpose of apportionment of the base as provided in said section 12-219, a taxpayer is taxable in another state if in such state such taxpayer conducts business and is subject to 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 if such state has jurisdiction to subject such taxpayer to such a tax, regardless of whether such state does, in fact, impose such a tax.
(b) (1) Any company that is (A) a limited partner in a partnership, other than an investment partnership, that does business, owns or leases property or maintains an office within this state and (B) not otherwise carrying on or doing business in this state shall apportion the average value of its partnership interest within and without this state under the provisions of subsection (a) of this section, except that the numerator and the denominator of its apportionment fraction shall be its proportionate part of the partnership's apportionment factors. For purposes of this section, the partnership shall compute its apportionment fraction and the numerator and the denominator of its apportionment factors as if it were a company taxable both within and without this state. However, if the commissioner determines that the company and the partnership are, in substance, parts of a unitary business engaged in a single business enterprise, or, if the company is a member of a combined group that files a combined unitary tax return, the company shall be taxed in accordance with the provisions of subdivision (3) of this subsection and not in accordance with the provisions of this subdivision.
(2) Any company that is (A) a limited partner (i) in an investment partnership or (ii) in a limited partnership, other than an investment partnership, that does business, owns or leases property or maintains an office within this state and (B) otherwise carrying on or doing business in this state shall apportion its additional tax base, including the average value of its partnership interest, within and without the state under the provisions of subsection (a) of this section, except that the numerator and the denominator of its apportionment factors shall include its proportionate part of the numerator and the denominator of the partnership's apportionment factors. For purposes of this section, the partnership shall compute its apportionment fraction and the numerator and the denominator of its apportionment factors, as if it were a company taxable both within and without this state.
(3) Any company that is a general partner in a partnership that does business, owns or leases property or maintains an office within this state shall, whether or not it is otherwise carrying on or doing business in this state, apportion its additional tax base, including the average value of its partnership interest, within and without the state under the provisions of subsection (a) of this section, except that the numerator and the denominator of its apportionment factors shall include its proportionate part of the numerator and the denominator of the partnership's apportionment factors. For purposes of this section, the partnership shall compute its apportionment fraction and the numerator and the denominator of its apportionment factors, as if it were a company taxable both within and without this state.
(c) This section shall not apply to insurance companies.
(d) The additional tax base of taxable and nontaxable members of a combined group required to file a combined unitary tax return pursuant to section 12-222 shall be apportioned as provided in subsection (g) of section 12-218e.
(P.A. 73-350, S. 12, 27; 73-616, S. 53, 67; P.A. 75-501, S. 2, 3; P.A. 77-539, S. 2, 3; 77-614, S. 139, 610; P.A. 96-197, S. 7, 11; P.A. 15-244, S. 154; June Sp. Sess. P.A. 15-5, S. 139, 148.)
History: P.A. 73-350 effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973; P.A. 73-616 made previous provisions applicable to taxpayer maintaining continuous place of business without the state and provided that entire additional tax base is subject to tax if permanent or continuous place of business not maintained without the state, effective June 1, 1973, and applicable to income years beginning on or after January 1, 1973; P.A. 75-501 made provisions applicable to taxpayer who “is taxable both within and without the state” and defined what is meant by the term “taxable in another state”, effective July 3, 1975, and applicable to income years ending on or after that date; P.A. 77-539 included in terms of definition above taxpayers conducting business in another state as well as being subject to taxes; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 96-197 made existing section Subsec. (a) and added new Subsec. (b) re apportionment of net income re companies that are limited partners in a partnership and made technical changes, effective June 3, 1996, and applicable to income years commencing on or after January 1, 1996; P.A. 15-244 added Subsec. (d) re apportionment of additional tax base of taxable and nontaxable members of combined group required to file combined unitary tax return, effective June 30, 2015, and applicable to income years commencing on or after January 1, 2015; June Sp. Sess. P.A. 15-5 changed effective date of P.A. 15-244, S. 154, from June 30, 2015, and applicable to income years commencing on or after January 1, 2015, to January 1, 2016, and applicable to income years commencing on or after that date, effective June 30, 2015, and amended Subsec. (b)(1) to require company that is a member of a combined group that files combined unitary tax return to be taxed under Subsec. (b)(3), effective January 1, 2016, and applicable to income years commencing on or after that date.
Cited. 43 CS 42.