Property Factor; Valuation of Leased or Rented Property

365.01 Leased or Rented Property. Property that is leased or rented by the taxpayer during the tax year is valued at eight times its annual lease or rental payment. The annual lease or rental payment for any items of rented property is the total amount paid to lease or rent the property for the year. Subleases or subrents are not deducted when the amounts received are apportionable income. 365.01A If a taxpayer has leased or rented property for a term of 12 or more months and the current tax period is less than 12 months (due, for example, to a reorganization or change of accounting period), the amount payable for the short tax period must be annualized. The payment is not annualized if the lease or rental term expires during the tax period. 365.01B If property is leased or rented for less than a 12-month period, or the term remaining during the tax year is less than 12 months, the amount paid for the period is substituted for the annual lease or rental payment for the tax period. The payment is not annualized if the lease or rental term expires during the tax period. 365.02 Day to Day Rentals; Excluded. Leased or rented property does not include incidental day-to-day rentals, for example, hotel or motel accommodations, or daily rental of automobiles. 365.03 Annual Lease or Rental Payment. The annual lease or rental payment is the total amount of money or other consideration payable, directly or indirectly, for the use of the property and includes: 365.03A Any amount payable for using some or all of any real or tangible personal property, whether designated as a fixed sum of money or as a percentage of sales, profits, or another measure; and 365.03B Any amount payable as additional rent or in lieu of rent (for example, interest, taxes, insurance, repairs, or any other items which are required to be paid by the terms of the lease or other arrangement). These additional amounts do not include amounts payable as service charges (for example, utilities or janitor services). If a payment includes rent and service charges but the service charges are not separately stated, the annual lease or rental payment is the fair market value of the lease or rent excluding the other charges. (Neb. Rev. Stat. § 77-2734.12. December 27, 2015.)