Neb. Admin. Code § 316-24-305 — Apportionment Formula

305.01 Corporations or Partnerships; Apportionment Formula. The federal taxable income, as adjusted under Reg-24-155, Nebraska Adjustments to Taxable Income, of a corporation or partnership operating both within and outside Nebraska is apportioned to Nebraska by using the sales factor of the corporation or partnership. The income of the taxpayer apportioned to Nebraska is determined by calculating the ratio of the taxpayer's sales in Nebraska compared to the total sales of the taxpayer and applying the computed ratio to the federal taxable income, as adjusted, of the taxpayer. 305.02 Unitary Group. The federal taxable income, as adjusted under Reg-24-155, Nebraska Adjustments to Taxable Income, of a unitary group operating both within and outside Nebraska is apportioned to Nebraska by using the sales factor of the unitary business. 305.03 Unitary Group; Apportionment Formula. When part of a unitary business is conducted in Nebraska by one or more members of the unitary group, the income of the taxpayer apportioned to Nebraska is determined by calculating the ratio of the unitary group's sales in Nebraska compared to the total sales of the entire unitary group and applying the computed ratio to the federal taxable income, as adjusted, of the unitary group. 305.03A In computing the factor, only those business entities that are subject to the IRC are included in the calculation and in the taxpayer's filing. 305.03B Sales of only those business entities with nexus in Nebraska are included in the numerator of the computed apportionment factor. 305.04 Unitary Group; Combined Return. Each unitary group must file only one income tax return for the group for each tax year, even if more than one member of the unitary group is taxable in Nebraska. 305.05 Unitary Group; S Corp Included in Apportionment. If a unitary group includes an S Corp, the apportionment formula in Reg-24-305.03 will be calculated for the entire unitary group and applied to the federal taxable income of the corporate taxpayer and separately to the federal taxable income of the S Corp which is taxable to its owners. 305.06 Unitary Group; Business Entities Excluded. Inactive business entities may not be included in the unitary group. Any business entity that is required or has received permission to use a special apportionment formula under Reg-24-381, Special Apportionment, cannot be included in the unitary group. If more than one affiliated or related company of a unitary group is properly using the same special apportionment formula, these business entities must use the combined income approach and must file a single return. (Neb. Rev. Stat. §§ 77-2734.01, 77-2734.05, 77-2734.14, 77-2734.15, and 77-2734.16. December 27, 2015.)