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D.C. Municipal Regulations (Last Updated: September 13, 2017) |
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Title 9. TAXATION AND ASSESSMENTS |
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Chapter 9-1. INCOME AND FRANCHISE TAXES |
Section 9-126. PROPERTY FACTOR
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126.1The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property owned by or rented to the taxpayer and used by the taxpayer in the District during the taxable year; and the denominator of which is the average value of all the taxpayer's real and tangible personal property owned by or rented to the taxpayer and used by the taxpayer during the taxable year; except that neither the numerator nor the denominator of the property factor shall include property, or any portion of property, which is not used to produce business income.
126.2In the case of transportation companies, the numerator of the property factor, in addition to other property described in § 126.1, shall include that portion of the average value of vehicles, rolling stock, aircraft, watercraft of all kinds, and other equipment used by the taxpayer during the taxable period to transport persons and property within and outside the District as the total miles per unit of equipment traveled in the District by each class of the property bear to the total miles per unit of equipment traveled everywhere by each respective class of property. In the case of railroad companies, the "classes of property" shall be those classes required to be reported for District personal property tax purposes pursuant to the Act of December 15, 1945 (D.C. Code § 47-1215).
126.3If the property is used in any activities the income from which is allocable or apportionable partly under this section and partly under another section or paragraph of this chapter, the taxpayer may employ (subject to the approval of the Deputy Chief Financial Officer) or the Deputy Chief Financial Officer may require the use of any method which will reflect properly the portion of the average value of the property to be used in arriving at the property factor under this section.
126.4Property owned by the taxpayer shall be valued at its original cost to the taxpayer plus the cost of additions and improvements.
126.5If the original cost of any property to the taxpayer is not determinable or is zero ($ 0.00), that property shall be valued by the Deputy Chief Financial Officer at an amount equal to its market value at the time of acquisition by the taxpayer.
126.6Property rented to the taxpayer shall be valued at eight (8) times the net annual rental rate which is the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from subrentals; Provided, that the rental and sub-rental rates are reasonable.
126.7Payments for leased property capitalized in accordance with federal provisions are not considered rent.
126.8The capitalized value of the property shall be included in the computation of a property factor.
126.9The term "net annual rental rate" includes amounts paid or accrued for the use or rental of the property or facilities of another whether paid as rent, reasonable compensation for use or by any other designation, and whether paid pursuant to statutory enactment, lease or rental agreement of any kind, contract, or otherwise.
126.10If the Deputy Chief Financial Officer determines that any net annual rental rate or sub-rental rate is unreasonable, or if a nominal or zero rate is charged, the Deputy Chief Financial Officer may determine and apply a rental rate that will reasonably reflect the value of the property rented by the taxpayer.
126.11The average value of property shall be determined by averaging the values at the beginning and end of the tax period; but the taxpayer may use (subject to the approval of the Deputy Chief Financial Officer), or the Deputy Chief Financial Officer may require the averaging of monthly or quarterly values during the tax period if reasonably necessary to reflect properly the average value of the taxpayer's property.