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(1) Domestic international sales corporations (DISCs), as defined in sections 991 through 994 of the IRC, export trade corporations, as described in sections 970 and 971 of the IRC, and foreign sales corporations, as defined in sections 921 through 927 of the IRC, are included in a water's-edge return. DISCs are specifically taxable notwithstanding the general exempt language of 15-31-102, MCA.

(2) A corporation incorporated outside the United States, if over 50 percent of the voting stock is owned directly or indirectly by a member of the includable group and if more than 20 percent of the average of its payroll and property, including payroll and property from disregarded entities and its pro rata share of unitary partnerships' payroll and property, is assignable to a location inside the United States, is included in a water's-edge return. For purposes of computing this average, the payroll factor provided for by 15-31-308, MCA, and the property factor as provided for by 15-31-306, MCA, shall be added together and divided by two, or by one if the denominator of either the property or payroll factor is zero.

(3) A corporation incorporated in the United States, if the denominator of both the property and payroll factor is zero, is included in a water's-edge return.

(4) If a corporation is "engaged in business" or "doing business" pursuant to 15-31-101, MCA, in this state, it is included in a water's-edge return.

(5) A corporation that is in a unitary relationship with the taxpayer and that is incorporated in a tax haven is included in a water's-edge return. 


History: 15-31-501, MCA; IMP, 15-31-322, MCA; NEW, 1988 MAR p. 278, Eff. 2/12/88; TRANS, from 42.26.225 and AMD, 2001 MAR p. 2469, Eff. 12/21/01; AMD, 2004 MAR p. 1034, Eff. 4/23/04; AMD, 2011 MAR p. 2053, Eff. 9/23/11; AMD, 2016 MAR p. 2198, Eff. 11/26/16; AMD, 2020 MAR p. 395, Eff. 2/29/20.

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