48-7-31

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48-7-31.
(a) The tax imposed by this chapter shall apply to the entire net income, as defined in this article, received by every foreign or domestic corporation owning property within this state, doing business within this state, or deriving income from sources within this state to the extent permitted by the United States Constitution. A corporation shall be deemed to be doing business within this state if it engages within this state in any activities or transactions for the purpose of financial profit or gain whether or not:
(1) The corporation qualifies to do business in this state;
(2) The corporation maintains an office or place of doing business within this state; or
(3) Any such activity or transaction is connected with interstate or foreign commerce.
(b)(1) If the entire business income of the corporation is derived from property owned or business done in this state, the tax shall be imposed on the entire business income.
(2) If the business income of the corporation is derived in part from property owned or business done in this state and in part from property owned or business done outside this state, the tax shall be imposed only on that portion of the business income which is reasonably attributable to the property owned and business done within this state, such portion to be determined as provided in subsections (c) and (d) of this Code section.
(c)(1) Interest received on bonds held for investment and income received from other intangible property held for investment are not subject to apportionment. All expenses connected with such investment income shall be applied against the investment income. The net investment income from intangible property shall be allocated to this state if the situs of the corporation is in this state or if the intangible property was acquired as income from property held in this state or as a result of business done in this state.
(2) Rentals received from real estate held purely for investment purposes and not used in the operation of any business are not subject to apportionment. All expenses connected with such investment income shall be applied against the investment income. The net investment income from tangible property located in this state shall be allocated to this state.
(3) Gains from the sale of tangible or intangible property not held, owned, or used in connection with the trade or business of the corporation nor held for sale in the regular course of business shall be allocated to this state if the property sold is real or tangible personal property situated in this state or intangible property having an actual situs or a business situs within this state. Otherwise, the gains shall not be allocated to this state.
(d) Net income of the classes described in subsection (c) of this Code section having been separately allocated and deducted, the remainder of the net business income shall be apportioned as follows:
(1) Where the net business income of the corporation is derived principally from the manufacture, production, or sale of tangible personal property, the portion of net income therefrom attributable to property owned or business done within this state shall be taken to be the portion arrived at by application of the following formula:
(A) Property factor. The property factor is a fraction, the numerator of which is the average value of the taxpayeŕs real and tangible personal property owned or rented and used in this state during the tax period and the denominator of which is the average value of all the taxpayeŕs real and tangible personal property owned or rented and used during the tax period;
(i) Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from subrentals;
(ii) The average value of property shall be determined by averaging the values at the beginning and end of the tax period, except that the commissioner may require the averaging of monthly values during the tax period if such averaging is reasonably required to reflect properly the average value of the taxpayeŕs property;
(B) Payroll factor. The payroll factor is a fraction, the numerator of which is the total amount paid in this state during the tax period by the taxpayer for compensation and the denominator of which is the total compensation paid everywhere during the tax period. The term 'compensation' means wages, salaries, commissions, and any other form of remuneration paid to employees for personal services. Payments made to an independent contractor or any other person not properly classified as an employee are excluded. Compensation is paid in this state if:
(i) The employeés service is performed entirely within this state;
(ii) The employeés service is performed both within and outside this state and the service performed outside this state is incidental to the employeés service within this state; or
(iii) Some of the service is performed in this state and either the base of operations, or the place from which the service is directed or controlled, is in this state or the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed but the employeés residence is in this state;
(C) Gross receipts factor.
(i) The gross receipts factor is a fraction, the numerator of which is the total gross receipts from business done within this state during the tax period and the denominator of which is the total gross receipts from business done everywhere during the tax period. For the purposes of this subparagraph, receipts shall be deemed to have been derived from business done within this state only if the receipts are received from products shipped to customers in this state, or from products delivered within this state to customers. In determining the gross receipts within this state, receipts from sales negotiated or effected through offices of the taxpayer outside this state and delivered from storage in this state to customers outside this state shall be excluded;
(ii) Where a taxpayeŕs gross receipts are also derived from activities described in paragraph (2) of this subsection, gross receipts shall also include the gross receipts from the activities described in paragraph (2) of this subsection and shall be attributed to Georgia based upon division (2)(C)(i) of this subsection;
(D) Apportionment formula. The property factor, the payroll factor, and the gross receipts factor shall be determined separately and an apportionment fraction shall be calculated using the following formula:
(i) The property factor shall represent 5 percent of the fraction;
(ii) The payroll factor shall represent 5 percent of the fraction; and
(iii) The gross receipts factor shall represent 90 percent of the fraction.
The net income of the corporation shall be apportioned to this state according to such fraction;
(2) Except as otherwise provided in paragraph (2.1) or (2.2) of this subsection, where the net business income is derived principally from business other than the manufacture, production, or sale of tangible personal property, the net business income of the corporation shall be determined by applying the following three-factor formula:
(A) Property factor. The property factor is a fraction, the numerator of which is the average value of the taxpayeŕs real and tangible personal property owned or rented and used in this state during the tax period and the denominator of which is the average value of all the taxpayeŕs real and tangible personal property owned or rented and used during the tax period;
(i) Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from subrentals;
(ii) The average value of property shall be determined by averaging the values at the beginning and end of the tax period, except that the commissioner may require the averaging of monthly values during the tax period if such averaging is reasonably required to reflect properly the average value of the taxpayeŕs property;
(B) Payroll factor. The payroll factor is a fraction, the numerator of which is the total amount paid in this state during the tax period by the taxpayer for compensation and the denominator of which is the total compensation paid everywhere during the tax period. The term 'compensation' means wages, salaries, commissions, and any other form of remuneration paid to employees for personal services. Payments made to an independent contractor or any other person not properly classified as an employee are excluded. Compensation is paid in this state if:
(i) The employeés service is performed entirely within this state;
(ii) The employeés service is performed both within and outside this state and the service performed outside this state is incidental to the employeés service within this state; or
(iii) Some of the service is performed in this state and either the base of operations or the place from which the service is directed or controlled is in this state or the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed but the employeés residence is in this state;
(C) Gross receipts factor.
(i) The gross receipts factor is a fraction, the numerator of which is the total gross receipts from business done within this state during the tax period and the denominator of which is the total gross receipts from business done everywhere during the tax period. For purposes of this subparagraph, the term 'gross receipts' means all gross receipts received from activities which constitute the taxpayeŕs regular trade or business. Gross receipts are in this state if the receipts are derived from customers within this state or if the receipts are otherwise attributable to this statés marketplace;
(ii) Where a taxpayeŕs gross receipts are also derived from activities described in paragraph (1) of this subsection, gross receipts shall also include the gross receipts from the activities described in paragraph (1) of this subsection and shall be attributed to Georgia based upon division (1)(C)(i) of this subsection;
(D) Apportionment formula. The property factor, payroll factor, and the gross receipts factor shall be determined separately and an apportionment fraction shall be calculated using the following formula:
(i) The property factor shall represent 5 percent of the fraction;
(ii) The payroll factor shall represent 5 percent of the fraction; and
(iii) The gross receipts factor shall represent 90 percent of the fraction.
The net income of the corporation shall be apportioned to this state according to such fraction;
(E) If the allocation and apportionment provisions provided for in this paragraph do not fairly represent the extent of the taxpayeŕs business activity in this state, the taxpayer may petition the commissioner for, or the commissioner may by regulation require, with respect to all or any part of the taxpayeŕs business activity, if reasonable:
(i) Separate accounting;
(ii) The exclusion of any one or more of the factors;
(iii) The inclusion of one or more additional factors that will fairly represent the taxpayeŕs business activity within this state; or
(iv) The employment of any other method to effectuate an equitable allocation and apportionment of the taxpayeŕs income.
The denial of a petition under this subparagraph shall be appealable pursuant to either Code Section 48-2-59 or 50-13-12;
(2.1)(A) Except as otherwise provided in this paragraph, all terms used in this paragraph shall have the same meaning as such terms are defined in 49 U.S.C. Section 1301 and the United States Department of Transportatiońs Uniform System of Accounts and Reports for Large Certificated Air Carriers, 14 C.F.R. Part 241, as now or hereafter amended.
(B) Where the net business income of the corporation is derived principally from transporting passengers or cargo in revenue flight, the portion of the net income therefrom attributable to property owned or business done within this state shall be taken to be the portion arrived at by application of the following three-factor formula:
(i) Revenue air miles factor. The revenue air miles factor is a fraction, the numerator of which shall be equal to the total, for each flight stage which originates or terminates in this state, of revenue passenger miles by aircraft type flown in this state and revenue cargo ton miles by aircraft type flown in this state and the denominator of which shall be equal to the total, for all flight stages flown everywhere, of total revenue passenger miles by aircraft type and total revenue cargo ton miles by aircraft type;
(ii) Tons handled factor. The tons handled factor is a fraction, the numerator of which shall be equal to the total of revenue passenger tons by aircraft type handled in this state and revenue cargo tons by aircraft type handled in this state and the denominator of which shall be equal to the total of revenue passenger tons by aircraft type flown everywhere and revenue cargo tons by aircraft type flown everywhere. For purposes of this division, the term 'handled' means the product of 60 percent multiplied by the revenue passenger tons flown on each flight stage which originates in this state or 60 percent multiplied by the revenue cargo tons flown on each flight stage which originates in this state;
(iii) Originating revenue factor. The originating revenue factor is a fraction, the numerator of which shall be equal to the total of passenger and cargo revenue by aircraft type which is attributable to this state and the denominator of which shall be the total of passenger and cargo revenue by aircraft type everywhere. For purposes of this division, passenger or cargo revenue which is attributable to this state shall be equal to the product of passenger or cargo revenue everywhere by aircraft type multiplied by the ratio of revenue passenger miles or revenue cargo ton miles in this state to total revenue passenger miles everywhere or total revenue cargo ton miles everywhere for each aircraft type as separately determined in division (i) of this subparagraph. If records of total passenger revenue everywhere by aircraft type or total cargo revenue everywhere by aircraft type are not maintained, then for purposes of this division, total passenger revenue everywhere for all aircraft types or total cargo revenue everywhere for all aircraft types shall be allocated to each aircraft type based on the ratio of total revenue passenger miles everywhere for that aircraft type to all aircraft types or total revenue cargo ton miles everywhere for that aircraft type to all aircraft types;
(iv) The revenue air miles factor, the tons handled factor, and the originating revenue factor shall be separately determined and an apportionment fraction shall be calculated using the following formula:
(I) The revenue air miles factor shall represent 25 percent of the fraction;
(II) The tons handled factor shall represent 25 percent of the fraction; and
(III) The originating revenue factor shall represent 50 percent of the fraction.
The net income of the corporation shall be apportioned to this state according to such average fraction;
(2.2)(A) As used in this paragraph, the term:
(i) 'Credit card data processing and related services' shall include, but not be limited to, the provision of infrastructure services for bank credit card and private label card issuers, such as new account application processing, international and domestic clearing, statement preparation, point-of-sale authorization processing, card embossing, and other related processing services for managing cardholder accounts.
(ii) 'Customer' means the banks and institutions to whom credit card data processing and related services are provided.
(iii) 'Gross receipts factor' means a fraction, the numerator of which is the total gross receipts from the taxpayeŕs customers during the tax period, if the principal office of the customeŕs credit card operation is in this state or if the principal office of the taxpayeŕs customer is in this state, and the denominator of which is the total gross receipts from all of the taxpayeŕs customers during the tax period.
(B) Where more than 60 percent of the total gross receipts of a corporation are derived from the provision of credit card data processing and related services to banks and other institutions, the portion of the net income attributable to business done in this state shall be determined by multiplying the corporatiońs net income by the gross receipts factor in division (iii) of subparagraph (A) of this paragraph;
(3) For the purposes of this subsection, the term 'sale' shall include, but not be limited to, an exchange, and the term 'manufacture' shall include, but not be limited to, the extraction and recovery of natural resources and all processes of fabricating and curing.
(e) The net income of a domestic or foreign corporation which is a subsidiary of another corporation or which is closely affiliated with another corporation by stock ownership shall be determined by eliminating all payments to the parent corporation or affiliated corporation in excess of fair value and by including fair compensation to the domestic business corporation for its commodities sold to or services performed for the parent corporation or affiliated corporation. For the purposes of determining net income as provided in this subsection, the commissioner may equitably determine the net income by reasonable rules of apportionment of the combined income of the subsidiary, its parent, and affiliates, or any combination of the subsidiary, its parent, and any one or more of its affiliates.