Taxation of Railroad and Public Service Corporations; Computation of Net Income Where Business Is Within and Outside State; Net Income for All Other Such Corporations

  1. Law
  2. Georgia Code
  3. Revenue and Taxation
  4. Income Taxes
  5. Imposition, Rate, and Computation; Exemptions
  6. Taxation of Railroad and Public Service Corporations; Computation of Net Income Where Business Is Within and Outside State; Net Income for All Other Such Corporations

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  1. When the business of any corporation engaged in the operation of a railroad, express service, telephone or telegraph business, or other form of public service is partly within and partly outside the state, the net income of the corporation for the purpose of this chapter shall be that amount ascertained by apportioning to the state the sum of the net income of the corporation including, but not limited to, dividend income that may legally be taxed by the state (exclusive of income from tax-exempt securities and without any deduction for federal and state income taxes), as shown by the corporation's records kept in accordance with the standard classification of accounts prescribed by the Interstate Commerce Commission when the standard classification of accounts includes in net income rents from all sources; and when the standard classification does not include all rents, then such rents shall be included in net income in the proportion that the total gross operating revenues from business done wholly within the state plus the equal mileage proportion within the state of all gross operating revenues from interstate business of the company, wherever done, bear to the total gross operating revenues from all business done by the company. If any such corporation keeps its records of operating revenues and operating expenses on a state basis in accordance with the standard classification of accounts prescribed by the Interstate Commerce Commission and in a manner which includes in net income for the state the effect of all intrastate and interstate business applicable to the state, the state records may be used by the taxpayer under the supervision of the commissioner in reporting the net taxable income within the state.
  2. All other corporations engaged in the business of operating a railroad, express service, telephone or telegraph business, or other form of public service, whether or not the corporation is required to make reports to the Interstate Commerce Commission, shall keep records according to the standard classifications of accounting of the Interstate Commerce Commission. The net income of the corporation including, but not limited to, dividend income that can legally be taxed by the state (exclusive of tax-exempt securities and without any deduction for federal and state income taxes) shall be determined in accordance with such records. If any such corporation keeps its records of operating revenues and operating expenses on a state basis in accordance with the standard classification of accounts prescribed by the Interstate Commerce Commission and in a manner which includes in net income for the state the effect of all intrastate and interstate business applicable to the state, the state records may, with the consent of the commissioner, be used by the taxpayer in reporting the net taxable income within the state.

(Ga. L. 1931, Ex. Sess., p. 24, § 18; Ga. L. 1931, p. 7, § 85; Code 1933, § 92-3116; Code 1933, § 91A-3614, enacted by Ga. L. 1978, p. 309, § 2; Ga. L. 1979, p. 5, § 112A; Ga. L. 1987, p. 191, § 2.)

Editor's notes.

- Ga. L. 1987, p. 191, § 10, not codified by the General Assembly, provides that this Act is applicable to taxable years ending on or after March 11, 1987, and that a taxpayer with a taxable year ending on or after January 1, 1987, and before March 11, 1987, may elect to have the provisions of that Act apply.

Ga. L. 1987, p. 191, § 10, not codified by the General Assembly, also provided that tax, penalty, and interest liabilities and refund eligibility for prior taxable years shall not be affected by that Act.

Ga. L. 1987, p. 191, § 10, not codified by the General Assembly, also provided that provisions of the federal Tax Reform Act of 1986 and of the Internal Revenue Code of 1986 which as of January 1, 1987, were not yet effective become effective for purposes of Georgia taxation on the same dates as they become effective for federal purposes.

JUDICIAL DECISIONS

Scope of commissioner's discretion.

- Discretion of the commissioner, if any, allowed by this section refers to the method of computation and records of corporations which keep records on a state basis, and does not refer to the method and records in the other parts of the section. Atlanta, Birmingham & Coast R.R. v. Forrester, 69 Ga. App. 369, 25 S.E.2d 581 (1943).

RESEARCH REFERENCES

Am. Jur. 2d.

- 71 Am. Jur. 2d, State and Local Taxation, § 327 et seq.

C.J.S.

- 85 C.J.S., Taxation, § 1979 et seq.

ALR.

- What constitutes doing business, business done, or the like, outside the state for purposes of allocation of income under tax laws, 167 A.L.R. 943.


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