TITLE 44

Taxation

CHAPTER 44-14

Taxation of Banks

SECTION 44-14-14.2



   § 44-14-14.2  Definitions applicable to

§§ 44-14-14.1 – 44-14-14.5. –

As used in §§ 44-14-14.1 – 44-14-14.5, unless the context

otherwise requires:



   (a) "Billing address" means the location indicated in the

books and records of the taxpayer on the first day of the taxable year (or on

such later date in the taxable year when the customer relationship began) as

the address where any notice, statement and/or bill relating to a customer's

account is mailed.



   (b) "Borrower or credit card holder located in this state"

means:



   (1) A borrower, other than a credit card holder, that is

engaged in a trade or business which maintains its commercial domicile in this

state; or



   (2) A borrower that is not engaged in a trade or business or

a credit card holder whose billing address is in this state.



   (c) "Commercial domicile" means:



   (1) The headquarters of the trade or business, that is, the

place from which the trade or business is principally managed and directed; or



   (2) If a taxpayer is organized under the laws of a foreign

country, or of the Commonwealth of Puerto Rico, or any territory or possession

of the United States, the taxpayer's commercial domicile shall be deemed for

the purposes of this section to be the state of the United States or the

District of Columbia from which the taxpayer's trade or business in the United

States is principally managed and directed. It shall be presumed, subject to

rebuttal, that the location from which the taxpayer's trade or business is

principally managed and directed is the state of the United States or the

District of Columbia to which the greatest number of employees are regularly

connected or out of which they are working, irrespective of where the services

of the employees are performed, as of the last day of the taxable year.



   (d) "Compensation" means wages, salaries, commissions and any

other form of remuneration paid to employees for personal services that are

included in the employee's gross income under the federal Internal Revenue

Code. In the case of employees not subject to the federal Internal Revenue Code

e.g., those employed in foreign countries the determination of whether the

payments would constitute gross income to the employees under the federal

Internal Revenue Code shall be made as though the employees where subject to

the federal Internal Revenue Code.



   (e) "Credit card" means credit, travel or entertainment card;



   (f) "Credit card issuer's reimbursement fee" means the fee a

taxpayer receives from a merchant's bank because one of the persons to whom the

taxpayer has issued a credit card has charged merchandise or services to the

credit card.



   (g) "Employee" means, with respect to a particular taxpayer,

any individual who, under the usual common-law rules applicable in determining

the employer-employee relationship, has the status of an employee of that

taxpayer.



   (h) "Financial institution" means entities as defined in

§ 44-14-2(2).



   (i)(1) "Gross rents" means the actual sum of money or other

consideration payable for the use or possession of property. "Gross rents"

shall include, but shall not be limited to:



   (i) 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;



   (ii) 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



   (iii) 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 taxable year. 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 (8) and the value of the

building is determined in the same manner as if owned by the taxpayer.



   (2) The following are not included in the term "gross rents";



   (i) Reasonable amounts payable as separate charges for water

and electric service furnished by the lessor;



   (ii) Reasonable amounts payable as service charges for

janitorial services furnished by the lessor;



   (iii) Reasonable amounts payable for storage, provided the

amounts are payable for space not designated and not under the control of the

taxpayer; and



   (iv) That portion of any rental payment which is applicable

to the space subleased from the taxpayer and not used by it.



   (j) "Loan" means any extension of credit resulting from

direct negotiating between the taxpayer and its customer, and/or the purchase,

in whole or in part, of the extension of credit from another. Loans include

participations, syndications, and leases treated as loans for federal income

tax purposes. Loans shall not include: properties treated as loans under

Section 595 of the federal Internal Revenue Code, 26 U.S.C. § 595

[repealed in 1996]; futures or forward contracts; options; national

principal contracts such as swaps; credit card receivables, including purchased

credit card relationships; non-interest bearing balances due from depository

institutions; cash items in the process of collection; federal funds sold;

securities purchased under agreements to resell; assets held in a trading

account; securities; interests in a REMIC, or other mortgage-backed or

asset-backed security; and other similar items.



   (k) "Loan secured by real property" means that fifty percent

(50%) 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.



   (l) "Merchant discount" means the fee (or negotiated

discount) charged to a merchant by the taxpayer for the privilege of

participating in a program whereby a credit card is accepted in payment for

merchandise or services sold to the cardholder.



   (m) "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.



   (n) "Person" means individual, estate, trust, partnership,

corporation and any other business entity.



   (o) "Principal base of operations" with respect to

transportation property, means the place of more or less permanent nature from

which the property is regularly directed or controlled. With respect to an

employee, the "principal base of operations" means the place of more or less

permanent nature from which the employee regularly:



   (1) States his or her work and to which he or she customarily

returns in order to receive instruction from his or her employer; or



   (2) Communicates with his or her customers or other persons;

or



   (3) Performs any other functions necessary to the exercise of

his or her trade or profession at some other point or points.



   (p) "Real property owned" and "tangible personal property

owned" mean real and tangible personal property, respectively;



   (1) On which the taxpayer may claim depreciation for federal

income tax purposes; or



   (2) 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 do not include coin, currency, or property acquired

in lieu of or pursuant to a foreclosure.



   (q) "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.



   (r) "State" means a state of the United State, the District

of Columbia, the Commonwealth of Puerto Rico, any territory or possession of

the United States or any foreign country.



   (s) "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.



   (t) "Taxable" means either:



   (1) A taxpayer is subject in another state to a net income

tax, a franchise tax measured by net income, a franchise tax for the privilege

of doing business, a corporate stock tax (including a bank shares tax), a

single business tax, or an earned surplus tax, or any tax which is imposed upon

or measured by net income; or



   (2) Another state has jurisdiction to subject the taxpayer to

any of the taxes regardless of whether, in fact, the state does or does not.



   (u) "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

the property, such as rolling stock, barges, trailers or the like.



History of Section.

(P.L. 1995, ch. 370, art. 34, § 5.)