IDAPA 35.01.01.565 — SPECIAL RULES: PROPERTY FACTOR (RULE 565)

Section 63-3027(18), Idaho Code
IDAHO ADMINISTRATIVE CODE
IDAPA 35.01.01
Idaho State Tax Commission
Income Tax Administrative Rules
Section 570
Page 86
01.
Subrents.
(4-6-23)
a.
In General. If the subrents taken into account in determining the net annual rental rate pursuant to
Rule 485 of these rules produce a negative or clearly inaccurate value for any item of property, another method that
properly reflects the value of rented property may be required by the Tax Commission or requested by the taxpayer.
The value may not be less than an amount that bears the same ratio to the annual rental rate paid by the taxpayer for
the property as the fair market value of that portion of the property used by the taxpayer bears to the total fair market
value of the rented property.
(4-6-23)
b.
Example. A taxpayer rents a ten (10) story building at an annual rental rate of one million dollars
($1,000,000). The taxpayer occupies two (2) stories and sublets eight (8) stories for one million dollars ($1,000,000)
a year. The taxpayer's net annual rental rate may not be less than two-tenths (0.2) of the taxpayer's annual rental rate
for the entire year, or two hundred thousand dollars ($200,000).
(4-6-23)
02.
Market Rental Rate. If property owned by others is used by the taxpayer at no charge or rented by
the taxpayer for a nominal rate, the net annual rental rate for the property is determined based on a reasonable market
rental rate for the property.
(4-6-23)