Property Factor: In General (Rule 460)

Section 63-3027(16)(a), Idaho Code 01. In General. The property factor of the apportionment formula for each trade or business of the taxpayer includes all real and tangible personal property owned or rented by the taxpayer and used during the taxable year in the regular course of its trade or business. The term real and tangible personal property includes land, buildings, fixtures, inventory, equipment, and other property of a tangible nature, but does not include coin or currency. (4-6-23) 02. Nonapportionable Income. Property used in connection with the production of nonapportionable income is to be excluded from the property factor. Property used both in the regular course of the taxpayer’s trade or business and in the production of nonapportionable income is to be included in the factor only to the extent the property is used in the regular course of the taxpayer’s trade or business. The method of determining that portion of the value to be included in the factor depends on the facts of each case. (4-6-23) 03. Average Value. The property factor is to reflect the average value of property includable in the factor. See Rule 490 of these rules. (4-6-23) 04. Denominator. The denominator of the factor may not exceed the sum of all the numerators. IDAHO ADMINISTRATIVE CODE IDAPA 35.01.01 Idaho State Tax Commission Income Tax Administrative Rules Section 465 Page 64 (4-6-23) 461. -- 464. (RESERVED) 465. PROPERTY FACTOR: PROPERTY USED FOR THE PRODUCTION OF APPORTIONABLE INCOME (RULE 465). Section 63-3027(16)(a), Idaho Code 01. In General. (4-6-23) a. Property is to be included in the property factor if it is used, is available for use, or capable of being used during the taxable year in the regular course of the taxpayer’s trade or business. Property held as reserves or standby facilities or property held as a reserve source of materials is to be included in the factor. For example, a plant temporarily idle or raw material reserves not currently being processed are includable in the factor. (4-6-23) b. Property or equipment under construction during the taxable year, except inventoriable goods in process, is to be excluded from the factor until the property is used in the regular course of the taxpayer’s trade or business. (4-6-23) c. If the property is partially used in the regular course of the taxpayer’s trade or business while under construction, the value of the property is to be included in the property factor to the extent used. (4-6-23) d. Property used in the regular course of the taxpayer’s trade or business is to remain in the property factor until it is permanently withdrawn by an identifiable event such as its sale, abandonment, or any event or circumstance that renders the property incapable of being used in the regular course of the taxpayer’s trade or business. (4-6-23) 02. Examples. (4-6-23) a. A taxpayer closed its manufacturing plant in State X and held the property for sale. The property remained vacant until its sale one (1) year later. The value of the manufacturing plant is included in the property factor until the plant is sold. (4-6-23) b. Assume the same facts as in Subsection 465.02.a., except the property was rented until the plant was sold. The plant is included in the property factor until the plant is sold. (4-6-23) 466. -- 469. (RESERVED)