Sourcing of Rail Carrier Transportation Services

# (1)

(1) *Definition.* For purposes of this rule, "rail carrier" means a person providing railroad transportation of persons or property for compensation.

# (2)

(2) *In General*. Amounts realized from rail carrier transportation services are sourced to this state if and to the extent the service is delivered to a location in this state. A transportation service is delivered to a location in this state to the extent that the transportation occurs within the borders of the state.

# (3)

(3) The total commercial activity sourced to this state during the tax period from rail carrier transportation services includes:

(a) All receipts realized from any rail carrier transportation service which both originates and terminates within this state; and

(b) That portion of the receipts realized from each movement or shipment passing through, into, or out of this state as determined by the ratio which the miles traveled by such movement or shipment in this state bears to the total miles traveled by such movement or shipment from points of origin to destination. Per diem and mileage charges that are collected by the taxpayer are excluded from both the numerator and denominator of the ratio.

# (4)

(4) Notwithstanding section (3), receipts sourced to this state may not include receipts from transportation services to the extent sourcing such receipts to this state is prohibited by the Constitution or laws of the United States, including, but not limited to, 49 U.S. Code § 24301(l).