Sec. 12-218b. Apportionment of net income of financial service companies.
Sec. 12-218b. Apportionment of net income of financial service companies. (a)
For purposes of this section:
(1) "Administrative services" includes, but is not limited to, clerical, fund or investment or account holder accounting, participant record keeping, transfer agency, bookkeeping, data processing, custodial, internal auditing, legal and tax services performed
for an investment entity, pension fund or retirement account but only if the provider of
such service or services during the income year in which such service or services are
provided also provides, or is a related person of a person that provides, management or
distribution services to such an investment entity, pension fund or retirement account.
(2) "Billing address" means the location indicated in the books and records of the
taxpayer or, as applicable, the investment entity, pension fund or retirement fund on the
first day of the taxable year or on such later date in the taxable year when the relationship
with the customer or, in the case of an investment entity, pension fund or retirement
account, investor or participant began as the address where any notice, statement or bill
relating to a customer's, investor's or participant's account is mailed.
(3) "Borrower located in this state" means (A) a borrower that is engaged in a trade
or business which maintains its commercial domicile in this state, or (B) a borrower
that is not engaged in a trade or business whose billing address is in this state.
(4) "Commercial domicile" means the headquarters of the trade or business, that
is, the place from which the trade or business is principally managed and directed.
(5) "Distribution services" means the services of advertising, servicing, marketing
or selling interests in an investment entity, pension fund or retirement account, but, in
the case of advertising, servicing or marketing interests, only where such service is
performed by a person that is, or, in the case of a closed-end company, was, either
engaged in the service of selling such interests or a related person of a person that is
engaged in the service of selling such interests.
(6) "Financial service company" means:
(A) Any corporation or other business entity registered under the laws of any state
as a bank holding company or registered under the federal Bank Holding Company Act
of 1956, as amended, or registered as a savings and loan holding company under the
federal National Housing Act, as amended;
(B) A national bank organized and existing as a national bank association pursuant
to the provisions of the National Bank Act, 12 USC Section 21 et seq.;
(C) A savings association or federal savings bank, as defined in the Federal Deposit
Insurance Act, 12 USC 1813(b)(1);
(D) Any bank, banking association, trust company, savings and loan association or
thrift institution incorporated or organized under the laws of any state, or any other
corporation or other business entity, the deposits or accounts of which are insured under
the Federal Deposit Insurance Act or by the Federal Deposit Insurance Corporation;
(E) Any corporation organized under the provisions of 12 USC 611 to 631;
(F) Any foreign bank that has an agency or branch, as defined in 12 USC 3101;
(G) A credit union organized under the laws of any state the loan assets of which
exceed fifty million dollars as of the first day of its income year;
(H) A production credit association organized under the federal Farm Credit Act
of 1933, all of whose stock held by the Federal Production Credit Corporation has been
retired;
(I) Any company whose voting stock is more than fifty per cent owned, directly
or indirectly, by any person described in subparagraphs (A) to (H), inclusive, of this
subdivision or by an insurance company, other than an insurance company or a company
that has more than fifty per cent of its gross income from one or more of the following
sources other than from sales to a related person: Manufacturing, construction, mining,
transportation and public utilities, retail or wholesale trade, other than the retail or wholesale delivery of the services described in subparagraph (J) of this subdivision, or agriculture, forestry and fishing;
(J) (i) Any company, other than an insurance company or a real estate broker, which
derives fifty per cent or more of its gross income from one or more of the following
sources or activities: Loans; letters of credit and acceptance of drafts; underwriting,
purchase, placement, sale or brokerage of securities, commodities contracts or other
financial instruments or contracts on its own account or for the account of others; exchanges, exchange clearinghouses and other services allied with the exchange of securities or commodities contracts; investment advisory or management services; investment
banking services, corporate trust and escrow services; securities information processing;
securities and financial rating agency services; transfer agent, clearing agent, securities
custodial and depository services; securities exchange or quotation services; any of the
services described in subsection (f) of section 12-218; any of the services described in
subsection (g) of section 12-218; management, distribution or administrative services
to or on behalf of an investment entity; management, distribution or administrative
services to or on behalf of pension funds or retirement accounts; leasing or acting as an
agent, broker or adviser in connection with leasing real and personal property that is
the functional equivalent of an extension of credit and that transfers substantially all of
the benefits and risks incident to the ownership of property, including any direct financing lease or leverage lease that meets the criteria of Financial Accounting Standards
Board Statement No. 13, "Accounting for Leases" or any other lease that is accounted
for as a financing by a lessor under generally accepted accounting principles; activities
of a Morris plan company; credit card activities; third party insurance administration
services, claim administration services, claim adjusting services, premium billing and
collection services, or employee benefit plan administration services; insurance underwriting or policy issuance services; actuarial services; trust company services; financial
planning services; insurance brokerage services; or risk management services;
(ii) Any company which derives fifty per cent or more of its gross income from an
activity in which a person described in subparagraphs (B) to (H), inclusive, of this
subdivision is authorized to transact;
(iii) Whether a company is classified as a financial service company for any income
year by virtue of this subparagraph shall be determined based upon the sources of such
taxpayer's gross income, other than gross income from nonrecurring, extraordinary
transactions, for such income year, except that any taxpayer classified as a financial
service company solely by virtue of this subparagraph for any income year shall continue
to be classified as a financial service company until the second consecutive year the
taxpayer would not otherwise qualify as a financial service company;
(K) (i) Any person described in subparagraph (J) of this subdivision may submit
a petition in writing to the commissioner for permission to apportion its income without
regard to the provisions of this section not later than sixty days prior to the due date of
the return to which the petition applies, determined with regard to any extension of time
for filing such return, and said commissioner shall grant or deny such permission before
said due date. The commissioner shall grant such permission only in the event that the
petitioner has proved, by clear and convincing evidence, that the income-producing
activity of the petitioner is not in substantial competition with a financial service company without regard to subparagraph (I) of this subdivision;
(ii) Any person may submit a petition in writing to the commissioner for permission
to apportion its income in accordance with the provisions of this section not later than
sixty days prior to the due date of the return to which the petition applies, determined
with regard to any extension of time for filing such return, and said commissioner shall
grant or deny such permission before said due date. The commissioner shall grant such
permission only in the event that the petitioner has proved, by clear and convincing
evidence, that the income-producing activity is substantially similar to the income-producing activities of a financial service company without regard to subparagraph (I) of
this subdivision.
(7) "Gross rents" means the actual sum of money or other consideration payable
for the use or possession of property, including, but not be limited to, (A) any amount
payable for the use or possession of real property or tangible property whether designated
as a fixed sum of money or as a percentage of receipts, profits, or otherwise, (B) any
amount payable as additional rent or in lieu of rent, such as interest, taxes, insurance,
repairs or any other amount required to be paid by the terms of a lease or other arrangement, and (C) a proportionate part of the cost of any improvement to real property made
by or on behalf of the taxpayer which reverts to the owner or lessor upon termination
of a lease or other arrangement. The amount to be included in gross rents is the amount
of amortization or depreciation allowed in computing the taxable income base for the
income year, provided where a building is erected on leased land by or on behalf of the
taxpayer, the value of the land is determined by multiplying the gross rent by eight and
the value of the building is determined in the same manner as if owned by the taxpayer.
"Gross rents" shall not include reasonable amounts payable as separate charges for
water and electric service furnished by the lessor, reasonable amounts payable as service
charges for janitorial services furnished by the lessor, reasonable amounts payable to
storage, provided such amounts are payable for space not designated and not under the
control of the taxpayer, and that portion of any rental payment which is applicable to
the space subleased from the taxpayer and not used by it.
(8) "Insurance company" means any corporation, limited liability company, association, partnership or combination of persons doing any kind or form of insurance business other than a fraternal benefit society, including a receiver, trustee or other fiduciary
of any insurance company when the context reasonably permits.
(9) "Investment entity" means (A) an investment partnership, a real estate investment trust, as defined in Section 856 of the Internal Revenue Code, a real estate mortgage
investment conduit, as defined in Section 860D of the Internal Revenue Code, a financial
asset securitization investment trust, as defined in Section 860L of the Internal Revenue
Code, or a similar investment entity which is exempt from, or is not subject to, federal
income tax, or (B) a separate account of an insurance company.
(10) "Loan" means any extension of credit resulting from direct negotiations between the taxpayer and its customer, or the purchase or receipt, in whole or in part, of
such extension of credit from another. Loans include participations, syndications, and
leases treated as loans for federal income tax purposes. Loans shall not include: (A)
Futures or forward contracts; (B) options; (C) notional principal contracts such as swaps;
(D) credit card receivables, including purchased credit card relationships; (E) non-interest-bearing balances due from depository institutions; (F) cash items in the process of
collection; (G) federal funds sold; (H) securities purchased under agreements to resell;
(I) assets held in a trading account; (J) securities; (K) interests in a real estate mortgage
investment conduit, as defined in Section 860D of the Internal Revenue Code or other
mortgage-backed or asset-backed security; and (L) other similar items.
(11) "Loan secured by real property" means that fifty per cent or more of the aggregate value of the collateral used to secure a loan or other obligation, when valued at fair
market value as of the time the original loan or obligation was incurred, was real property.
(12) "Management services", when performed on behalf of an investment entity,
pension fund or retirement account, means the rendering of investment advice directly
or indirectly to an investment entity, pension fund or retirement account, making determinations as to when sales and purchases of property are to be made on behalf of the
investment entity, pension fund or retirement account, or the selling or purchasing of
property constituting assets of an investment entity, pension fund or retirement account
and related activities, but only where such activity or activities are performed (A) pursuant to a contract with the investment entity, pension fund or retirement account, (B) for
a person that has entered into such contract with the investment entity, pension fund or
retirement account, or (C) for a person that is a related person of a person that has entered
into such contract with an investment entity, pension fund or retirement account.
(13) "Participation" means an extension of credit in which an undivided ownership
interest is held on a pro rata basis in a single loan or pool of loans and related collateral. In
a loan participation, the credit originator initially makes the loan and then subsequently
resells all or a portion of it to other lenders. The participation may or may not be known
to the borrower.
(14) "Pension fund or retirement fund" means any fund, trust, plan, account, annuity
or contract referred to in subsection (a) of section 52-321a, or other fund, trust, plan,
account, annuity or contract established pursuant to the Internal Revenue Code or any
other federal or state statute, including, but not limited to, funds held in an insurance
company general or separate account, which is designed to provide pension or retirement
benefits.
(15) "Principal base of operations", with respect to transportation property, means
the place of more or less permanent nature from which said property is regularly directed
or controlled.
(16) "Real property owned" and "tangible personal property owned" means real
and tangible personal property, respectively, (A) on which the taxpayer may claim depreciation for federal income tax purposes, or (B) property to which the taxpayer holds
legal title and on which no other person may claim depreciation for federal income tax
purposes or could claim depreciation if subject to federal income tax. Real and tangible
personal property does not include coin, currency or property acquired in lieu of or
pursuant to a foreclosure.
(17) "Regular place of business" means an office at which the taxpayer carries on
its business in a regular and systematic manner and which is continuously maintained,
occupied and used by employees of the taxpayer.
(18) "Related person" means (A) a corporation, limited liability company, partnership, association or trust controlled by the taxpayer, (B) an individual, corporation,
limited liability company, partnership, association or trust that is in control of the taxpayer, (C) a corporation, limited liability company, partnership, association or trust
controlled by an individual, corporation, limited liability company, partnership, association or trust that is in control of the taxpayer, or (D) a member of the same controlled
group as the taxpayer. For purposes of this subdivision, "control", with respect to a
corporation, means ownership, directly or indirectly, of stock possessing fifty per cent
or more of the total combined voting power of all classes of the stock of such corporation
entitled to vote. "Control", with respect to a trust, means ownership, directly or indirectly, of fifty per cent or more of the beneficial interest in the principal or income of
such trust. The ownership of stock in a corporation, of a capital or profits interest in a
partnership or association or of a beneficial interest in a trust shall be determined in
accordance with the rules for constructive ownership of stock provided in Section 267(c)
of the Internal Revenue Code other than paragraph (3) of said section.
(19) "State" means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States or any foreign
country.
(20) "Syndication" means an extension of credit in which two or more persons fund
and each person is at risk only up to a specified percentage of the total extension of
credit or up to a specified dollar amount.
(21) "Transportation property" means vehicles and vessels capable of moving under
their own power, such as aircraft, trains, water vessels and motor vehicles, as well as
any equipment or containers attached to such property, such as rolling stock, barges,
trailers or the like.
(b) (1) Except as otherwise specifically provided, a financial service company
whose business activity is taxable within this state, whether or not it is taxable outside
this state, shall apportion its net income from business carried on within this state in
accordance with this section. The net income of a financial service company shall be
apportioned to this state by multiplying such income by the receipts factor. The receipts
factor for a financial service company is a fraction, the numerator of which is the receipts
of the taxpayer in this state during the income year and the denominator of which is the
receipts of the taxpayer within and without this state during the income year. The method
of calculating receipts for purposes of the denominator is the same as the method used
in determining receipts for purposes of the numerator.
(2) Any receipts attributable to an international banking facility, as defined in section 12-217, shall not be included in the numerator or denominator of the receipts factor.
In lieu of such exclusion of receipts attributable to an international banking facility, the
taxpayer, pursuant to the provisions of subdivision (3) of this subsection, may, on or
before the due date or, if applicable, the extended due date, of its corporation business
tax return, make an election on its corporation business tax return, to exclude receipts
attributable to an international banking facility from the numerator of its receipts factor
and to include such receipts in the denominator of its receipts factor.
(3) If the taxpayer makes the election under subdivision (2) of this subsection, the
taxpayer may not, in arriving at its net income, deduct the gross income attributable to the
international banking facility from its gross income, but expenses or losses attributable to
the international banking facility, to the extent deductible under the Internal Revenue
Code, may be deducted from its gross income. The election, if made by the taxpayer,
shall be irrevocable for, and applicable for, five successive income years.
(c) The numerator of the receipts factor includes receipts from the lease or rental
of real property owned by the taxpayer if the property is located within this state and
receipts from the sublease of real property if the property is located within this state.
(d) (1) Except as described in subdivision (2) of this subsection, the numerator of
the receipts factor includes receipts from the lease or rental of tangible personal property
owned by the taxpayer if the property is located within this state when it is first placed
in service by the lessee.
(2) Receipts from the lease or rental of transportation property owned by the taxpayer are included in the numerator of the receipts factor to the extent that the property
is used in this state. The extent an aircraft will be deemed to be used in this state and
the amount of receipts that is to be included in the numerator of this state's receipts
factor is determined by multiplying all the receipts from the lease or rental of the aircraft
by a fraction, the numerator of which is the number of landings of the aircraft in this
state and the denominator of which is the total number of landings of the aircraft. If the
extent of the use of any transportation property within this state cannot be determined,
the property shall be deemed to be used wholly in the state in which the property has
its principal base of operations. A motor vehicle shall be deemed to be used wholly in
the state in which it is registered.
(e) (1) The numerator of the receipts factor includes interest and fees or penalties
in the nature of interest from loans secured by real property if the property is located
within this state. If the property is located both within this state and one or more other
states, the receipts described in this subsection are included in the numerator of the
receipts factor if more than fifty per cent of the fair market value of the real property is
located within this state. If more than fifty per cent of the fair market value of the real
property is not located within any one state, the receipts described in this subsection
shall be included in the numerator of the receipts factor if the borrower is located in
this state.
(2) The determination of whether the real property securing a loan is located within
this state shall be made as of the time the original agreement was made and all subsequent
substitutions of collateral shall be disregarded.
(f) The numerator of the receipts factor includes interest and fees or penalties in the
nature of interest from loans not secured by real property if the borrower is located in
this state.
(g) (1) The numerator of the receipts factor includes net gains from the sale of
loans. Net gains from the sale of loans includes income recorded under the coupon
stripping rules of Section 1286 of the Internal Revenue Code.
(2) The amount of net gains, but not less than zero, from the sale of loans secured
by real property included in the numerator is determined by multiplying such net gains
by a fraction the numerator of which is the amount included in the numerator of the
receipts factor pursuant to subsection (e) of this section and the denominator of which
is the total amount of interest and fees or penalties in the nature of interest from loans
secured by real property.
(3) The amount of net gains, but not less than zero, from the sale of loans not secured
by real property included in the numerator is determined by multiplying such net gains
by a fraction the numerator of which is the amount included in the numerator of the
receipts factor pursuant to subsection (f) of this section and the denominator of which
is the total amount of interest and fees or penalties in the nature of interest from loans
not secured by real property.
(h) (1) The numerator of the receipts factor includes loan servicing fees derived
from loans secured by real property multiplied by a fraction the numerator of which is
the amount included in the numerator of the receipts factor pursuant to subsection (e)
of this section and the denominator of which is the total amount of interest and fees or
penalties in the nature of interest from loans secured by real property.
(2) The numerator of the receipts factor includes loan servicing fees derived from
loans not secured by real property multiplied by a fraction the numerator of which is
the amount included in the numerator of the receipts factor pursuant to subsection (f)
of this section and the denominator of which is the total amount of interest and fees or
penalties in the nature of interest from loans not secured by real property.
(3) In circumstances in which the taxpayer receives loan servicing fees for servicing
either the secured or the unsecured loans of another, the numerator of the receipts factor
shall include such fees if the borrower is located in this state.
(i) (1) Interest, dividends, net gains, but not less than zero, and other income from
investment assets and activities and from trading assets and activities shall be included
in the receipts factor. Investment assets and activities and trading assets and activities
include, but are not limited to, investment securities, trading account assets, federal
funds, securities purchased and sold under agreements to resell or repurchase, options,
futures contracts, forward contracts, notional principal contracts such as swaps, equities,
and foreign currency transactions. With respect to the investment and trading assets and
activities described in subparagraphs (A) and (B) of this subdivision, the receipts factor
shall include the amounts described in said subparagraphs (A) and (B).
(A) The receipts factor shall include the amount by which interest from federal
funds sold and securities purchased under resale agreements exceeds interest expense
on federal funds purchased and securities sold under repurchase agreements.
(B) The receipts factor shall include the amount by which interest, dividends, gains
and other income from trading assets and activities, including, but not limited to, assets
and activities in the matched book, in the arbitrage book, and foreign currency transactions, exceed amounts paid in lieu of interest, amounts paid in lieu of dividends and
losses from such assets and activities.
(2) The numerator of the receipts factor includes interest, dividends, net gains, but
not less than zero, and other income from investment assets and activities and from
trading assets and activities described in subdivision (1) of this subsection that are attributable to this state.
(A) The amount of interest, dividends, net gains, but not less than zero, and other
income from investment assets and activities in the investment account to be attributed
to this state and included in the numerator is determined by multiplying all such income
from such assets and activities by a fraction, the numerator of which is the average value
of such assets which are properly assigned to a regular place of business of the taxpayer
within this state and the denominator of which is the average value of all such assets.
(B) The amount of interest from federal funds sold and purchased and from securities purchased under resale agreements and securities sold under repurchase agreements
attributable to this state and included in the numerator is determined by multiplying the
amount described in subparagraph (A) of subdivision (1) of this subsection from such
funds and such securities by a fraction, the numerator of which is the average value of
federal funds sold and securities purchased under agreements to resell which are properly
assigned to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such funds and such securities.
(C) The amount of interest, dividends, gains and other income from trading assets
and activities, including, but not limited to, assets and activities in the matched book,
in the arbitrage book and foreign currency transactions, but excluding amounts described
in subparagraph (A) or (B) of this subdivision, attributable to this state and included in
the numerator is determined by multiplying the amount described in subparagraph (B)
of subdivision (1) of this subsection by a fraction, the numerator of which is the average
value of such trading assets which are properly assigned to a regular place of business
of the taxpayer within this state and the denominator of which is the average value of
all such assets.
(D) For purposes of this subdivision, the average value of property owned by the
taxpayer is computed on an annual basis by adding the value of the property on the first
day of the income year and the value on the last day of the income year and dividing
the sum by two. If averaging on this basis does not properly reflect average value, the
commissioner may require averaging on a more frequent basis. The taxpayer may elect
to average on a more frequent basis. When averaging on a more frequent basis is required
by the commissioner or is elected by the taxpayer, the same method of valuation must
be used consistently by the taxpayer with respect to property within and without this
state and on all subsequent returns unless the taxpayer receives prior permission from the
commissioner or the commissioner requires a different method of determining average
value.
(3) In lieu of using the method set forth in subdivision (2) of this subsection, the
taxpayer may elect, or the commissioner may require in order to fairly represent the
business activity of the taxpayer in this state, the use of the method set forth in this
subdivision.
(A) The amount of interest, dividends, net gains, but not less than zero, and other
income from investment assets and activities in the investment account to be attributed
to this state and included in the numerator is determined by multiplying all such income
from such assets and activities by a fraction, the numerator of which is the gross income
from such assets and activities which are properly assigned to a regular place of business
of the taxpayer within this state and the denominator of which is the gross income from
all such assets and activities.
(B) The amount of interest from federal funds sold and purchased and from securities purchased under resale agreements and securities sold under repurchase agreements
attributable to this state and included in the numerator is determined by multiplying the
amount described in subparagraph (A) of subdivision (1) of this subsection from such
funds and such securities by a fraction, the numerator of which is the gross income from
such funds and such securities which are properly assigned to a regular place of business
of the taxpayer within this state and the denominator of which is the gross income from
all such funds and securities.
(C) The amount of interest, dividends, gains and other income from trading assets
and activities, including, but not limited to, assets and activities in the matched book,
in the arbitrage book and foreign currency transactions, but excluding amounts described
in subparagraph (A) or (B) of this subdivision, attributable to this state and included in
the numerator is determined by multiplying the amount described in subparagraph (B)
of subdivision (1) of this subsection by a fraction, the numerator of which is the gross
income from such trading assets and activities which are properly assigned to a regular
place of business of the taxpayer within this state and the denominator of which is the
gross income from all such assets and activities.
(4) If the taxpayer elects or is required by the commissioner to use the method set
forth in subdivision (3) of this subsection, it shall use this method on all subsequent
returns unless the taxpayer receives prior permission from the commissioner to use, or
the commissioner requires a different method.
(5) The taxpayer shall have the burden of proving that an investment asset or activity
or trading asset or activity was properly assigned to a regular place of business outside
of this state by demonstrating that the day-to-day decisions regarding the asset or activity
occurred at a regular place of business outside this state. Where the day-to-day decisions
regarding an investment asset or activity or trading asset or activity occur at more than
one regular place of business and one such regular place of business is in this state and
one such regular place of business is outside this state, such asset or activity shall be
considered to be located at the regular place of business of the taxpayer where the investment or trading policies or guidelines with respect to the asset or activity are established.
Unless the taxpayer demonstrates to the contrary, such policies and guidelines shall be
presumed to be established at the commercial domicile of the taxpayer.
(j) (1) The numerator of the receipts factor includes receipts received for management, distribution and administrative services performed on behalf of an investment
entity in an amount equal to the product of such receipts for the income year multiplied
by a fraction (A) the numerator of which shall be the average of (i) the fair market value
of the interests in the investment entity issued and outstanding on the first day of such
investment entity's taxable year for federal income tax purposes, which ends within or
at the same time as the income year of the financial service company, that are owned
by investors in such investment entity if the billing address of such investors is in this
state, and (ii) the fair market value of the interests in the investment entity issued and
outstanding on the last day of such investment entity's taxable year for federal income
tax purposes, which ends within or at the same time as the income year of the financial
service company, that are owned by investors in such investment entity if the billing
address of such investors is in this state; and (B) the denominator of which shall be the
average of the fair market value of the interests in the investment entity issued and
outstanding that are owned by investors in such investment entity on such dates.
(2) The numerator of the receipts factor includes receipts received for management,
distribution and administrative services performed on behalf of a pension fund or retirement account in an amount equal to the product of such receipts for the income year
multiplied by a fraction (A) the numerator of which shall be the average of (i) the number
of participants with an interest in the pension fund or retirement account on the first day
of the pension fund or retirement account taxable year, for federal income tax purposes,
which ends within or at the same time as the income year of the financial service company, whose billing address is in this state, and (ii) the number of participants with an
interest in the pension fund or retirement account on the last day of the pension fund or
retirement account taxable year, for federal income tax purposes, which ends within or
at the same time as the income year of the financial service company, whose billing
address is in this state; and (B) the denominator of which shall be the total number of
participants with an interest in the pension fund or retirement account on such dates. In
lieu of using the billing addresses of the participants with an interest in the pension fund
or retirement account as provided in this subdivision, the taxpayer may elect to determine
receipts in the manner provided for in this subsection based upon the average of the
fair market value of funds under management in each income year allocated to the
commercial domicile of the sponsor of the pension fund or retirement account and,
where there is no sponsor for a particular pension fund or retirement account, the billing
address of the participant. The election, if made by the taxpayer, shall be irrevocable
for, and applicable for, five successive income years and shall be applicable to all receipts
from the rendering of management, distribution or administrative services performed
for any pension fund or retirement account.
(3) In the case of a separate account of an insurance company, to the extent that
both subdivisions (1) and (2) of this subsection may be applicable, then subdivision (2)
shall apply.
(k) This section shall not apply to net income from services or activities described
in subsection (f), (g) or (j) of section 12-218 which income shall be apportioned in
accordance with said subsection (f), (g) or (j), whether or not the taxpayer is taxable
outside this state, or, for income years commencing prior to January 1, 2002, in the case
of net income from activities described in said subsection (j) that is earned by a taxpayer
that is either not eligible to make the election described in said subsection (j) or does
not make the election described in said subsection (j) which income shall be apportioned
in accordance with subsection (b) of said section 12-218.
(l) For all other receipts not otherwise sourced by this subsection, the numerator of
the receipts factor includes all other receipts if the billing address of the customer is in this
state; otherwise the numerator will include all other receipts pursuant to the provisions of
section 12-218.
(P.A. 98-110, S. 11, 27; P.A. 99-121, S. 5, 28; June Sp. Sess. P.A. 01-6, S. 24, 85.)
History: P.A. 98-110 effective May 19, 1998, and applicable to income years commencing on or after January 1, 1999;
P.A. 99-121 amended Subsec. (a)(12) to limit "management services" to when performed on behalf of an investment entity,
pension fund or retirement account, effective June 3, 1999, and applicable to income years commencing on or after January
1, 1999; June Sp. Sess. P.A. 01-6 amended Subsec. (a)(6)(K) to add provisions re the submission and grant or denial of
written petition for permission to apportion net income, effective July 1, 2001, and applicable to income years commencing
on or after January 1, 2001, with respect to petitions filed on or after October 1, 2001.