HAR § 18-235-29-02 — Apportionment formula; denominator of zero

If the denominator of the property factor, payroll factor, or sales factor is zero, then the denominator of the fraction in section 235-29, HRS, shall be reduced by the number of factors with a zero denominator, and the numerator of that fraction shall not include any factor with a zero denominator. Example: X is a company that provides data entry services to United States companies. X performs its services exclusively through employees of F, its foreign parent that does no business HRS §235-23 HRS §235-29 HRS §235-29 §18-235-29-04 in the United States. X has no employees of its own. X’s property factor is 5 per cent, its sales factor is 17 per cent, and its payroll factor has a zero denominator. X’s apportionment percentage is 11 per cent (5 per cent plus 17 per cent, divided by 2).