N.D.C.C. § 57-38-14 — General provisions relating to corporate income

The following principles may be applied in determining North Dakota income:
1. Any corporation organized under the laws of North Dakota and subject to a tax under
the provisions of this chapter, which maintains no regular place of business outside
this state, except a statutory office, must be taxed upon its entire income.
2. Corporations engaged in business within and without this state may be taxed only on
such income as is derived from business transacted and property located within this
state. The amount of such income apportionable to North Dakota must be determined
as provided in chapter 57-38.1.
3. Any corporation liable to report under this chapter and owning or controlling, either
directly or indirectly, substantially all of the voting capital stock of another corporation,
or of other corporations, may be required to make a consolidated report showing the
combined income, such assets of the corporation as are required for the purposes of
this chapter, and such other information as the tax commissioner may require, but
excluding intercorporate stock holdings and intercorporate accounts.
4. Any corporation liable to report under this chapter and owned or controlled either
directly or indirectly by another corporation may be required to make a report
consolidated with the owning company, showing the combined income, such assets of
the corporation as are required for the purposes of this chapter, and such other
information as the tax commissioner may require, but excluding intercorporate stock
holdings and intercorporate accounts.
5. In case it appears to the tax commissioner that any arrangement exists in such a
manner as to reflect improperly the business done, the segregable assets, or the
entire income earned from business done in this state, the tax commissioner is
authorized and empowered, in such manner as the tax commissioner may determine,
to adjust the tax equitably.
6. The tax commissioner may permit or require the filing of a combined report if
substantially all the voting capital stock of two or more corporations liable to report
under this chapter is owned or controlled by the same interests. The tax commissioner
may impose the tax provided by this chapter as though the combined entire income
and segregated assets were those of one corporation, but in the computation,
dividends received from any corporation whose assets, as distinguished from shares
of stock, are included in the segregations may not be included in the income.
7. When any corporation required to make a return under this chapter conducts the
business, whether under agreement or otherwise, in such manner as directly or
indirectly to benefit the members or stockholders of the corporation, or any of them, or
any person or persons, directly or indirectly interested in such business, by selling its
products, or the goods or commodities in which it deals, at less than a fair price which
might be obtained therefor, or if such a corporation, a substantial portion of whose
capital stock is owned either directly or indirectly by another corporation, acquires and
disposes of the products of the corporation owning the substantial portion of its capital
stock, in such manner as to create a loss or improper income, the tax commissioner
may require such facts as the tax commissioner deems necessary for the proper
computation provided by this chapter, and for the purposes of this chapter may
determine the amount which must be deemed to be the entire income, of the business
of such corporation for the calendar or fiscal year. In determining such entire income,
the tax commissioner shall have regard to the fair profits which, but for any agreement,
arrangement, or understanding, might be or could have been obtained from dealing in
such products, goods, or commodities.
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8. If it appears to the tax commissioner that the segregation of assets shown by any
report made under this chapter does not reflect properly the corporate activity or
business done, or the income earned from corporate activity, or from business done in
this state because of the character of the corporation's business and the character and
location of its assets, the tax commissioner is authorized and empowered to adjust the
tax equitably.
9. Notwithstanding any other provision of law, two or more North Dakota domestic
corporations, affiliated as parent and subsidiary, and filing a federal consolidated tax
return, shall file a combined report and consolidated return for income tax under this
chapter.