North Dakota Administrative Code Title 81 — Tax Commissioner
N.D. Admin. Code § 81-03-09-03
Business and nonbusiness income defined
Subsection 1 of North Dakota Century Code section 57-38.1-01 and article IV(1)(a) of North Dakota Century Code section 57-59-01 define "business income" as income arising from transactions and activity in the regular course of the taxpayer's trade or business and includes income from tangible and intangible property if the acquisition, management, and disposition of the property constitute integral parts of the taxpayer's regular trade or business operations. In essence, all income which arises from the conduct of trade or business operations of a taxpayer is business income. For purposes of administration of North Dakota Century Code chapter 57-38.1 and North Dakota Century Code chapter 57-59, the income of the taxpayer is business income unless clearly classifiable as nonbusiness income. Nonbusiness income means all income other than business income. The classification of income by the labels occasionally used, such as manufacturing income, compensation for services, sales income, interest, dividends, rents, royalties, gains, operating income, nonoperating income, and so forth, is of no aid in determining whether income is business or nonbusiness income. Income of any type or class and from any source is business income if it arises from transactions and activity occurring in the regular course of a trade or business. Accordingly, the critical element in determining whether income is "business income" or "nonbusiness income" is the identification of the transactions and activity which are the elements of a particular trade or business. In general, all transactions and activities of the taxpayer which are dependent upon or contribute to the operations of the taxpayer's economic enterprise as a whole constitute the taxpayer's trade or business and will be transactions and activity arising in the regular course of and will constitute integral parts of a trade or business. See sections 81-03-09-04 and 81-03-09-08 for further explanation of a trade or business.
Amendment history
History: Amended effective November 1, 1991. General Authority: NDCC 57-38-56 Law Implemented: NDCC 57-38.1-01(1), 57-59-01 (art.IV(1)(a))
Source: view the official PDF
In this article (40 sections)
- 81-03-05.4-02 · Use of this rule
- 81-03-05.4-03 · Computation - Part I
- 81-03-05.4-04 · Computation - Part II
- 81-03-05.4-05 · Additional provisions
- 81-03-05.5-01 · Credit for North Dakota alternative minimum tax
- 81-03-05.5-02 · Deduction for federal alternative minimum tax
- 81-03-09-01 · General
- 81-03-09.1-01 · Special rules - Financial institutions
- 81-03-09.1-02 · Definitions
- 81-03-09.1-03 · Apportionment and allocation - Property factor
- 81-03-09.1-04 · Apportionment and allocation - Receipts factor
- 81-03-09.1-05 · Apportionment and allocation - Payroll factor
- 81-03-09.1-06 · Taxable years
- 81-03-09-02 · Definitions
- 81-03-09.2-01 · Definitions
- 81-03-09.2-02 · Sales factor weighting election
- 81-03-09.2-03 · Sales factor weighting election applicability
- 81-03-09.2-04 · Rescission of a sales factor weighting election
- 81-03-09.2-05 · Provisions of income tax laws applicable
- 81-03-09.2-06 · Taxable years
- 81-03-09-03 · Business and nonbusiness income defined
- 81-03-09-04 · Two or more businesses of a single taxpayer
- 81-03-09-05 · Business and nonbusiness income - Application of…
- 81-03-09-06 · The numerator of the revenue factor is the total revenue…
- 81-03-09-07 · Apportionment
- 81-03-09-08 · Combined report
- 81-03-09-09 · Allocation
- 81-03-09-10 · Consistency and uniformity in reporting
- 81-03-09-11 · Taxable in another state - In general
- 81-03-09-12 · Taxable in another state - When a taxpayer is "subject…
- 81-03-09-13 · Taxable in another state - When a state has jurisdiction…
- 81-03-09-14 · Apportionment formula
- 81-03-09-15 · Property factor - In general
- 81-03-09-16 · Property factor - Property used for the production of…
- 81-03-09-17 · Property factor - Consistency in reporting
- 81-03-09-18 · Property factor - Numerator
- 81-03-09-19 · Property factor - Valuation of owned property
- 81-03-09-20 · Property factor - Valuation of rented property
- 81-03-09-21 · Property factor - Averaging property values
- 81-03-09-21.1 · Property factor - Intangible drilling costs