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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 9-129. ALLOCATION AND APPORTIONMENT APPLICABLE TO FINANCIAL INSTITUTIONS
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129.1The District shall impose on a financial institution a franchise tax measured by net income, determined by multiplying the financial institution's base by an apportionment fraction, the numerator of which is the sum of the payroll factor and the gross income factor and the denominator of which is 2. For this purpose the base to which the apportionment fraction is applied shall be the financial institution's net income for that taxable year as defined under Title III of the Act.
129.2The payroll factor is a fraction, the numerator of which is the total amount paid or accrued in the District by the financial institution as compensation and the denominator of which is the total amount paid or accrued everywhere by the financial institution as compensation during the taxable year.
129.3Compensation shall be paid in the District if paid to any employee considered to be located or as having regular presence therein.
129.4All compensation paid by a financial institution to an employee located in a State in which the financial institution is not taxable shall be deemed to have been paid in the District of Columbia, if the financial institution has its principal office located in the District of Columbia.
129.5The gross income factor is a fraction, the numerator of which is the financial institution's gross income located in the District during the taxable year and the denominator of which is the total gross income of the financial institution during the taxable year.
129.6All gross income described in §§ 129.9 through 129.11 which is located in a jurisdiction in which the financial institution is not subject to a "doing business tax" shall be deemed to be located in the District of Columbia if the principal office of the financial institution is located in the District.
129.7A financial institution whose commercial domicile is in the District and who is subject to a "doing business tax" in another jurisdiction, shall include in the numerator of the income factor for the District any income not required by the other jurisdiction to be included in the numerator of an income factor.
129.8[Deleted] 32 DCR 1354, 1358 (March 8, 1985).
129.9The interest, loan placement fees, discount and net gain from each unsecured loan and each loan secured primarily by tangible or intangible personal property, or any participating interest therein, shall be located in the District if the loan is originated in the District.
129.10In the case of a financial institution whose commercial domicile is in the District, income from securities, investments, money market instruments or from any other source not required to be apportioned outside the District shall be located in the District.
129.11The income referred to in § 129.10 shall include, but not be limited to, interest, dividends and net gains.
129.12Except as provided for in § 129.7, fees, commissions, service charges, and other forms of gross income from the sales of depository or financial services shall be located in the District if the service is performed therein.
129.13Sales or services rendered in two (2) or more taxing jurisdictions shall for the purposes of the numerator be included in the numerator of the jurisdiction in which the greater portion of the income-producing activity is performed, based on costs of performance.
129.14Gross income from the lease of tangible property shall be considered to be located in the District if the property is located therein.
129.15Except as otherwise provided in this section, tangible property, including real property which is security for a loan, shall be considered to be located in the jurisdiction in which the property is physically situated.
129.16Tangible personal property which is characteristically moving property, such as motor vehicles, rolling stock, aircraft, vessels, mobile equipment, and the like, and which is leased to others for use, shall be considered to be located in the District if the following conditions are met:
(a) The operation of the property by the lessee is entirely within the District, or the operation without the District is occasional or incidental to its operation within the District; or
(b) The operation of the property by the lessee is in two (2) or more jurisdictions, but the principal base of operations from which the property is sent out by the lessee is in the District.