North Dakota Corporation Income Tax Instructions - 2011 Page 8
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122011 North Dakota Corporation Income Tax Return Instructions
Page 4
c1. Water’s Edge Method
b1. Combined Report Method
If a North Dakota consolidated tax return is
Consolidated Return
Consolidated Return
being fi led to report the tax liability of more
Mark the “Water’s Edge Method Consolidated
than one corporation engaged in business in or
Mark the “Combined Report Method Consol.
Return” circle if:
having sources of income from North Dakota:
Return” circle if the corporation is fi ling one
consolidated North Dakota return using the
• The members of a worldwide unitary
1. Do not complete lines 5-19 of Form 40,
combined report method.
business group of corporations elect to fi le a
page 1 until Schedule CR has been
consolidated tax return using the water’s edge
completed.
Two or more apportioning corporations may
method, and
fi le one North Dakota consolidated return if the
2. Complete Schedule CR, Parts I, II and III
• If two or more apportioning corporations in the
corporations are required to use the combined
on pages 6, 7 and 8 and enter the totals on
combined report have a fi ling requirement in
report method and more than one of the
Form 40, page 1.
North Dakota.
corporations has a fi ling requirement in North
3. Complete Form 40, page 1.
Dakota.
If circle c1 is marked:
4. Attach the completed Schedule CR to
If circle b1 is marked:
Form 40 when fi led.
1. If part of the same unitary group, fi le the
return using the same taxpayer name and
1. If part of the same unitary group, fi le the
federal identifi cation number as previously
Line 5
return using the same taxpayer name and
fi led returns if that entity has activity in North
Apportionment factor
federal identifi cation number as previously
Dakota in 2011. If not, fi le using the name
fi led returns if that entity has activity in North
If a corporation has business income from activity
and federal identifi cation number of another
Dakota in 2011. If not, fi le using the name
solely within this state, enter 1.000000 on this line.
affi liate having activity in North Dakota in
and federal identifi cation number of another
2011.
Corporations not fi ling a consolidated return, enter
affi liate having activity in North Dakota in
the apportionment factor from Schedule FACT,
2011.
2. Complete Schedule WE on page 5 and enter
line 14.
the amount from line 13 on Form 40 line 1.
2. Complete Schedule WW on page 4 and enter
Attach the completed Schedule WE to Form 40
Corporations completing Schedule CR must enter
the amount from line 11 on Form 40, line 1.
when fi led.
the apportionment factor from Schedule CR,
Attach the completed Schedule WW to
Part II, line 15a.
Form 40 when fi led.
3. Complete North Dakota Schedule CR, Parts I,
II and III only for companies that apportion
It is required that the supporting schedule FACT or
3. Complete North Dakota Schedule CR, Parts I,
income to North Dakota.
CR, Part II, whichever is applicable, be completed,
II and III only for companies that apportion
and that the 6-digit factor from the supporting
income to North Dakota. If a corporation
4. Answer “Yes” to question #7 on page 2 of
schedule be carried to Form 40, page 1, line 5.
does not have property, payroll, and/or sales
Form 40.
in North Dakota, it will not be listed on
Schedule CR.
If the supporting schedule is not completed, the
d. Other
return will be considered incomplete and mailed
4. Answer “Yes” to question #7 on page 2 of
Mark the “Other” circle if the corporation has
back.
Form 40.
received written permission from the Offi ce of
State Tax Commissioner to fi le a North Dakota
Line 7
return using a fi ling method other than those
c. Water’s Edge Method
Income allocated to North Dakota
specifi ed above.
Mark the “Water’s Edge Method” circle if:
Enter nonbusiness income allocated to North
• The corporation is a member of a worldwide
Other fi ling methods are contained in N.D.C.C.
Dakota less related expenses. Nonbusiness
unitary business group of corporations, and
§ 57-38.1-18 (for example, separate accounting or
income is allocated to North Dakota if the income
a method using an apportionment factor different
is attributable to North Dakota.
• The corporation elects to fi le a North Dakota
from that computed on Schedules FACT or CR).
tax return using the water’s edge method, and
Expenses must be attributed to nonbusiness
• No other corporations in the combined report
If the circle entitled “Other” is marked:
income in a manner which fairly distributes all of
have a fi ling requirement in North Dakota, if
the corporation’s expenses to its various types of
1. Attach a copy of the letter from the Offi ce of
more than one, see C1 method below.
income.
State Tax Commissioner granting permission to
If circle c is marked:
use, or requiring the use of, this fi ling method.
Corporations completing Schedule CR must enter
the total nonbusiness income for all corporations
1. The return should be fi led using the taxpayer
2. Attach a worksheet substantiating and
having activity within North Dakota.
name and federal identifi cation number of the
explaining the computation of income.
entity having activity in North Dakota.
Line 9
3. Enter the income from the worksheet on
2. Complete Schedule WE on page 5 and enter
Form 40, line 1.
Exemption for new and expanding
the amount from line 13 on Form 40, line 1.
business
Attach the completed Schedule WE to Form 40
Line 4
If the corporation received a new and expanding
when fi led.
North Dakota apportionable income
business exemption from the State Board of
3. Answer “No” to question #7 on page 2 of
Equalization, enter the amount of exempt
If completing Schedule CR, enter the amount from
Form 40.
income computed pursuant to N.D. Admin. Code
Form 40, page 1, line 4 on Schedule CR, Part I,
§ 81-03-01.1-06.
line 4 (enter the same amount for each company)
and complete Parts I, II and III of Schedule CR.
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