Neb. Admin. Code § 316-24-341 — Special Apportionment Rules; All Tax Years; Airline

341.01 Scope. This regulation governs the apportionment of taxable income of an airline that has income from sources both within and outside Nebraska. 341.02 Definitions. The following definitions are applicable to the terms used in the apportionment factor descriptions. 341.02A Aircraft ready for flight are aircraft owned or acquired through rental or lease (but not interchange) which are in the possession of the taxpayer and are available for service on the taxpayer routes. 341.02B Cost of aircraft by type is the average original cost or value of aircraft by type which are ready for flight. 341.02C Departures are all takeoffs, whether they are regularly-scheduled or charter flights, that occur during revenue service. 341.02D Original cost is the initial federal tax basis of the property plus the value of capital improvements to the property, except that, for this purpose, it is assumed that safe harbor leases are not true leases and do not affect the original initial federal tax basis of the property. 341.02E Net annual rental rate is the annual rental rate paid by the taxpayer. 341.02F Revenue service is using aircraft ready for flight for producing revenue. 341.02G Transportation revenue is flight revenue earned by transporting passengers, freight, and mail as well as revenue earned in connection with providing transportation, including, but not limited to, food, beverage, and media sales made on the plane; pet crate rentals, baggage fees, etc. 341.02H Value of rented real and tangible personal property is the product of eight times the net annual rental rate. 341.03 Sales Factor: Numerator. The numerator is the revenue other than transportation revenue as calculated in Reg-24-341.03A plus the result of the calculation of the transportation revenue in Reg-24-341.03B. 341.03A Revenue Other than Transportation Revenue. The gross receipts of the taxpayer, other than transportation revenue, are included in the sales factor numerator in accordance with Reg-24-301 through Reg-24-340. 341.03B Transportation Revenue. The gross receipts of the transportation revenue that is included in the numerator is the total revenue of the taxpayer in Nebraska during the income year. To compute the total transportation revenue of the taxpayer in Nebraska during the income year: 341.03B(1) Calculate the ratio of departures of aircraft in this state weighted as to the cost and value of aircraft by type, compared to total departures also weighted as to the cost and value of the aircraft by type; and 341.03B(2) Multiply this ratio by the total transportation revenue. 341.04 Sales Factor; Denominator. The denominator is revenue derived from all transactions and activities in the regular course of the trade or business of the taxpayer, including both the revenue that is other than transportation revenue and the transportation revenue. 341.05 Income Excluded from the Factors. Investment income items such as interest, rental income, dividends, or proceeds or net gains or losses from the sale of aircraft will not be included in either the numerator or the denominator. 341.06 Unitary Group. An airline must be included in a unitary group with business entities which are not airlines. 341.07 Records. The taxpayer must maintain the records necessary to determine departures by type of aircraft as described in these regulations. These records are subject to review by the Department. (Neb. Rev. Stat. §§ 77-2734.14, 77-2734.15, and 77-2734.16. December 27, 2015.)