IDAPA 35.01.01.332 — APPORTIONABLE AND NONAPPORTIONABLE INCOME DEFINED: TRANSACTIONAL

TEST (RULE 332).
Section 63-3027(1)(a), Idaho Code
01.
In General. Apportionable income includes income arising from transactions and activity in the
regular course of the taxpayer's trade or business.
(4-6-23)
02.
Apportionable Income for Idaho. If the transaction or activity is in the regular course of the
taxpayer's trade or business, part of which trade or business is conducted within Idaho, the resulting income of the
transaction or activity is apportionable income for Idaho. Income may be apportionable income even though the
actual transaction or activity that gives rise to the income does not occur in Idaho.
(4-6-23)
03.
Regular Course of the Taxpayer's Trade or Business. For a transaction or activity to be in the
IDAHO ADMINISTRATIVE CODE
IDAPA 35.01.01
Idaho State Tax Commission
Income Tax Administrative Rules
Section 333
Page 51
regular course of the taxpayer's trade or business, the transaction or activity need not be one that frequently occurs in
the trade or business. Most, but not all, frequently occurring transactions or activities will be in the regular course of
that trade or business and will, therefore, satisfy the transactional test. It is sufficient to classify a transaction or
activity as being in the regular course of a trade or business, if it is reasonable to conclude transactions of that type are
customary in the kind of trade or business being conducted or are within the scope of what that kind of trade or
business does. However, even if a taxpayer frequently or customarily engages in investment activities, if those
activities are for the taxpayer's mere financial betterment rather than for the operations of the trade or business, such
activities do not satisfy the transactional test. The transactional test includes, but is not limited to, income from sales
of inventory, property held for sale to customers, and services that are commonly sold by the trade or business. The
transactional test also includes, but is not limited to, income from the sale of property used in the production of
apportionable income of a kind that is sold or replaced with some regularity, even if replaced less frequently than
once a year.
(4-6-23)