Neb. Admin. Code § 316-24-335 — Sales Factor; Sales Other Than Sales of Tangible Personal Property in Nebraska; Intangible Property

335.01 Sales of Intangible Property. Sales of intangible property are attributable to Nebraska if the buyer uses the intangible property at a location in Nebraska, even if the buyer's customers are located in another state. 335.01A If the buyer uses the intangible property within and outside Nebraska, the sales are attributable to Nebraska in proportion to the use of the intangible property in Nebraska and the use everywhere during the tax period. 335.01A(1) Marketing Intangible. If the intangible is used by the buyer in marketing its products, the use of the intangible in Nebraska is the share of the receipts that reflects the sales of the buyer within and outside Nebraska. If this cannot be determined, the use of the intangible in Nebraska is the share of the receipts that reflects the population of Nebraska relative to the population everywhere the buyer markets the product using the intangible. Examples of a marketing intangible include licensing of a service mark, trademark, or trade name. 335.01A(2) Production Intangible. If the intangible is used by the buyer to produce its products, the use of the intangible in Nebraska is the share of the production which occurs in Nebraska using the intangible relative to the production of the product using the intangible everywhere. Examples of a production intangible include licensing of patents or copyrights. 335.01A(3) Service Intangible. If the intangible is used by the buyer like a good or service, or used by the business itself, the sales are attributable to Nebraska using the rules for sales of services in Reg-24-333. Examples of a service intangible include licensing use of a legal research service. 335.01A(4) Mixed Intangible. If the intangible is used by the buyer in more than one of the ways listed in Reg-24-335.01A(1), (2), or (3), and the fees charged for each type of use are separately stated in the license, the separate uses are attributable to Nebraska separately. If the intangible is used by the buyer in more than one of the ways listed in Reg-24-335.01A(1), (2), or (3), and the fees charged for each type of use are not separately stated in the license, the sales are attributable to Nebraska based on which use is most predominant. 335.01B If the location of use cannot be determined, the sale of intangible property is attributable to Nebraska if the buyer's billing address is in Nebraska. 335.02 Income from Intangible Assets Used in a Treasury Function. 335.02A Income from intangible assets held in connection with a treasury function is attributable to Nebraska: 335.02A(1) To the extent that intangible asset income is included in taxable income; and 335.02A(2) To the extent the investment, management, and record-keeping activities associated with corporate investments occur in Nebraska. 335.02B This section does not include net gains from the sale or redemption of marketable securities or hedging transactions. 335.03 Income from Loans Secured by Real or Tangible Personal Property. Loans secured by real property or tangible personalproperty are attributable to Nebraska if the property securing the loan is located in Nebraska. This income includes gross interest, fees, points, charges, and penalties from loans, net gains from the sale of loans, and loan servicing fees derived from loans owned by the taxpayer or another person, including loans under a participation agreement. 335.03A If the real property or tangible personal property securing a loan is located within and outside Nebraska, the sale is attributable to Nebraska in proportion to the annual average amortized loan balance of the loan secured by the real property or tangible personal property located in Nebraska compared to the annual average amortized loan balance of the loan. 335.03A(1) If a loan is secured by property that is located both inside and outside Nebraska, the average amortized loan balance is attributable to Nebraska based on the ratio of the value of the property securing the loan that is in Nebraska compared to the total value of all property securing the loan. 335.03A(2) If a loan is secured by mobile property that is in Nebraska only part of the time, the average amortized loan balance is attributable to Nebraska in proportion to the time the property was physically present or was used in Nebraska compared to the total time or use of the property everywhere during the tax period. 335.04 Loans Not Secured by Real or Tangible Personal Property. A loan not secured by real property or tangible personal property is attributable to Nebraska if the borrower is in Nebraska based upon the borrower's billing address. This income includes gross interest, fees, points, charges, and penalties from loans, net gains from the sale of loans, and loan servicing fees from loans owned by the taxpayer or another person, including loans under a participation agreement. 335.05 Credit Cards. For credit cards; the gross interest, fees, points, charges, and penalties from credit card receivables and gross receipts from annual fees and other fees charged to credit card holders are attributable to Nebraska if the billing address of the credit card holder is in Nebraska. 335.06 Credit Card Receivables. Net gains from the sale of credit card receivables are attributed to Nebraska if the billing address of the credit card holder is in Nebraska. The net gains cannot be less than zero. (Neb. Rev. Stat. § 77-2734.14. December 27, 2015.)