PDF document

- 1 -

    1                                                                                                                                                                                 1
    2                                                                                                                                                                                 2
1 2 3  3 5 6 7 8 910  12  14  16  18  20  22  24  26  28  30  32  34  36  38  40  42  44  46  48  50  52  54  56  58  60  62  64  66  68  70  72  74  76  78  80                      3  84
                  11  13  15  17  19  21  23  25  27  29  31  33  35  37  39  41  43  45  47  49  51  53  55  57  59  61  63  65  67  69  71  73  75  77  79  81  83  85
    4
                  CORPORATION INCOME TAX RETURN
    5                                                                                                                                                                                 5
                  NORTH DAKOTA OFFICE OF STATE TAX COMMISSIONER
    6                                                                                                                                                                                 6
                  SFN 28740 (12-2022)                                                                                                        FORM 40
    7                                                                                                                                                                                 7
    8                                                                                                                                              2022                               8
    9        Mark one:             X                    Calendar Year  (Jan. 1, 2022 - Dec. 31, 2022)                                                                                 9
    10                             X                    Fiscal Year     Beginning    MM/DD/2022              and ending MM/DD/YYYY                                                    10
    11     If yes, must attachHave a federal extension? Name                                                                               Federal EIN*                               11
    12       X   Yes          X No                      XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX                                          9999999999999                              12
    13     Date of incorporation                        Mailing address                                                                    Is this a farming or ranching corporation? 13
    14       MM/DD/YYYY                                 XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX                                          X Yes        X No                          14
    15     Final return                                 City, State, Zip Code                                           Phone Number       Business Code (see instructions)           15
    16       X   Yes          X No                      XXXXXXXXXXXXXXXXXXXXXXXXXXXXX                                   999-999-9999       999999                                     16
    17   Computation of tax liability                                                                                                              Round off to dollars               17
    18                                                                                                                                                                                18
    19     1   Income from (Mark the ONE box that identifies the filing method - see instructions)                                         (LA) 1 99999999999999                      19
    20            a.          X    b.                   XXXb1.              c.             c1. X         d. X                                                                         20
    21            Single Corp      Combined                  Combined         Water's Edge Water's Edge  Other                                                                        21
                  Entity           Report                    Report Method    Method       Method Consol.
    22                             Method                    Consol. Return                Return                                                                                     22
    23     2   Total additions (Enter amount from Schedule SA, line 7)                                                                     (LB) 2 99999999999999                      23
    24     3   Total subtractions (Enter amount from Schedule SA, line 16)                                                                 (LC) 3 99999999999999                      24
    25     4   North Dakota apportionable income (subtract line 3 from the sum of lines 1 and 2)                                             4 99999999999999                         25
    26     5   Apportionment Factor (Factor from Schedule FACT or Schedule CR)                                                             (LE) 5              9.999999               26
    27     6   Income apportioned to North Dakota (Line 4 multiplied by line 5)                                                              6 99999999999999                         27
    28     7   Income allocated to North Dakota                       999999999                less related expenses 999999999             (LF) 7 99999999999999                      28
    29     8   North Dakota income (Add lines 6 and 7)                                                                                       8 99999999999999                         29
    30     9   Exemption for new and expanding business (Attach worksheet - for consolidated return, amount from Sch. CR)                  (CL) 9 99999999999999                      30
    31     10 Renaissance zone income exemption (Amount from Sch. RZ - for consolidated return, amount from Sch. CR)                       (RE) 10 99999999999999                     31
    32     11 North Dakota income after income exemptions (Subtract lines 9 and 10 from line 8)                                            11 99999999999999                          32
    33     12 North Dakota loss carryforward (Attach worksheet - for consolidated return, amount from Sch. CR)                             (LH) 12 99999999999999                     33
    34     13 Subtotal (Subtract line 12 from line 11                   )                                                                  13 99999999999999                          34
    35     14 Gross proceeds allocated to North Dakota from sale of research tax credit (See instructions)                                 (EF) 14 99999999999999                     35
    36     15 North Dakota taxable income (See instructions)                                                                               (LI) 15 99999999999999                     36
    37     16 Income tax due (See rates below)                                                                                             (EE) 16 99999999999999                     37
    38     17 Surtax on water's edge method election (3.5% of line 15 - Water's edge filers only)                                          (ST) 17 99999999999999                     38
    39     18 Total income tax due (Add lines 16 and 17)                                                                                   (LJ) 18 99999999999999                     39
    40     19 Tax credits (Enter amount from Schedule TC, line 24)                                                                         (AZ) 19 99999999999999                     40
    41                                                                                                                                                                                41
             Balance due or overpayment
    42     20 Net income tax liab. (Subtract line 19 from line 18 - for consolidated return, amount from Sch. CR, Part 1, line 20a)        20 99999999999999                          42
    43     21 2022 estimated income tax payments and payment with extension                                                                (LN) 21 99999999999999                     43
    44     22 North Dakota income tax withheld on oil and gas royalties (Attach 1099-MISC)                                           (LW) 22 99999999999999                           44
    45     23 Total payments and amount withheld (Add lines 21 and 22)                                                                     23 99999999999999                          45
    46     24 If line 20 is greater than line 23, enter difference as BALANCE DUE (Enter $0 if less than $5)                               (LR) 24 99999999999999                     46
    47         a. Interest and penalty for balance due on line 24                                                                    (LQ) 24a 99999999999999                          47
    48         b. Interest on underpayment of estimated tax (Attach Form 40-UT)                                                      (UT) 24b 99999999999999                          48
    49         c. Total payment due (Add lines 24, 24a, and 24b - Pay to ND State Tax Commissioner)                                        24c 99999999999999                         49
    50     25 If line 23 is greater than line 20, enter difference less line 24b, as OVERPAYMENT                                                                                      50
    51         (Enter $0 if less than $5)                                                                                                  (LV) 25 99999999999999                     51
    52         a. Amount of line 25 to be credited to 2023 estimated tax (Minimum $5)                                                (AI) 25a 99999999999999                          52
    53         b. Amount of line 25 to be REFUNDED (Subtract line 25a from line 25 - no refund under $5)                                   25b 99999999999999                         53
    54   I declare that this return is correct and complete to the best of my knowledge and belief.                     *Privacy Act Notice - see instructions X I authorize          54
    55                                                                                                                                                         the North Dakota       55
    56   Date:                  Signature of Officer:                                      Title:                                                              Office of State Tax    56
    57                                                                                                                                                         Commissioner to        57
         Date:                  Signature of Preparer:                                     Address:                                  FEIN:                     discuss this return
    58     Mail to: Office of State Tax Commissioner, 600 E. Boulevard Ave.  Dept 127, Bismarck, North Dakota  58505-0599                                      with the preparer.     58
    59                                                                                                                               PLEASE DO NOT WRITE IN THIS SPACE                59
                                                        Tax Rate Table
    60                        $0 - $25,000...............1.41% of North Dakota taxable income                                                                                         60
    61                        $25,000 - $50,000......$352.50 + 3.55% of amount over $25,000                                                                                           61
    62                        Over $50,000.............$1,240.00 + 4.31% of amount over $50,000                                                                                       62

                                                                                                                     NACTP
1 2 3  645 6 7 8 910  12  14  16  18  20  22  24  26  28  30  32  34  36  38  40  42  44  46  48  50  52 CIT54  56  58  60  62  64  66  68  70  72  74  76  78  80                    64 84
                  11  13  15  17  19  21  23  25  27  29  31  33  35  37  39  41  43  45  47  49  51  53  55  57  59  61  63  65  67  69  71  73  75  77  79  81  83  85
    65                                                                                                                                                                                65
    66                                                                                                                                                                                66

- 2 -

                  CORPORATION INCOME TAX RETURN
                  NORTH DAKOTA OFFICE OF STATE TAX COMMISSIONER
                  SFN 28740 (12-2022)                                                                                                         FORM 40

                                                                                                                                              2022
   Mark one:                              Calendar Year  (Jan. 1, 2022 - Dec. 31, 2022)
                                          Fiscal Year           Beginning                              and ending
 IfHaveyes, musta federalattach extension?Name                                                                                       Federal EIN*
              Yes               No
 Date of incorporation                    Mailing address                                                                            Is this a farming or ranching corporation?
                                                                                                                                     
                                                                                                                                             Yes          No
 Final return                             City, State, Zip Code                                                  Phone Number        Business Code (see instructions)
                                                                                                                                     
              Yes               No
Computation of tax liability                                                                                                                     Round off to dollars

 1   Income from (Mark theONE box that identifies the filing method - see instructions                           )                   (LA) 1
                  a.              b.                   b1.            c.           c1.           d.
                  Single Corp     Combined             Combined       Water's Edge Water's Edge  Other
                  Entity          Report               Report Method  Method       Method Consol.
                                  Method               Consol. Return              Return
 2   Total additions (Enter amount from Schedule SA, line 7)                                                                         (LB) 2
 3   Total subtractions (Enter amount from Schedule SA, line 16)                                                                     (LC) 3
 4   North Dakota apportionable income (subtract line 3 from the sum of lines 1 and 2)                                                       4
 5   Apportionment Factor (Factor from Schedule FACT or Schedule CR)                                                                 (LE) 5
 6   Income apportioned to North Dakota (Line 4 multiplied by line 5)                                                                        6
 7   Income allocated to North Dakota                                                  less related expenses                         (LF) 7
 8   North Dakota income (Add lines 6 and 7)                                                                                                 8
 9   Exemption for new and expanding business (Attach worksheet - for consolidated return, amount from Sch. CR)                      (CL) 9
 10 Renaissance zone income exemption (Amount from Sch. RZ - for consolidated return, amount from Sch. CR)                          (RE) 10
 11 North Dakota income after income exemptions (Subtract lines 9 and 10 from line 8)                                                11
 12 North Dakota loss carryforward (Attach worksheet - for consolidated return, amount from Sch. CR)                                (LH) 12
 13 Subtotal (Subtract line 12 from line 11)                                                                                         13
 14 Gross proceeds allocated to North Dakota from sale of research tax credit (See instructions)                                     (EF) 14
 15 North Dakota taxable income (See instructions)                                                                                   (LI) 15
 16 Income tax due (See rates below)                                                                                                 (EE) 16
 17 Surtax on water's edge method election (3.5% of line 15 - Water's edge filers only)                                              (ST) 17
 18 Total income tax due (Add lines 16 and 17)                                                                                       (LJ) 18
 19 Tax credits (Enter amount from Schedule TC, line 24)                                                                            (AZ) 19
   Balance due or overpayment
 20 Net income tax liab. (Subtract line 19 from line 18 - for consolidated return, amount from Sch. CR, Part 1, line 20a)            20
 21 2022 estimated income tax payments and payment with extension                                                                   (LN) 21
 22 North Dakota income tax withheld on oil and gas royalties (Attach 1099-MISC)                                              (LW) 22
 23 Total payments and amount withheld (Add lines 21 and 22)                                                                         23
 24 If line 20 is greater than line 23, enter difference as BALANCE DUE (Enter $0 if less than $5)                                  (LR) 24
        a. Interest and penalty for balance due on line 24                                                                    (LQ) 24a
        b. Interest on underpayment of estimated tax (Attach Form 40-UT)                                                      (UT) 24b
        c. Total payment due (Add lines 24, 24a, and 24b - Pay to ND State Tax Commissioner)                                         24c
 25 If line 23 is greater than line 20, enter difference less line 24b, as OVERPAYMENT
        (   Enter $0 if less than $5)                                                                                               (LV) 25
        a. Amount of line 25 to be credited to 2023 estimated tax (Minimum $5)                                                (AI) 25a
        b. Amount of line 25 to be REFUNDED (Subtract line 25a from line 25 - no refund under $5)                                    25b
 I declare that this return is correct and complete to the best of my knowledge and belief.                        *Privacy Act Notice - see instructions   I authorize
                                                                                                                                                            the North Dakota
Date:                           Signature of Officer:                              Title:                                                                   Office of State Tax
                                                                                                                                                            Commissioner to
Date:                           Signature of Preparer:                             Address:                                   FEIN:                         discuss this return
 Mail to: Office of State Tax Commissioner, 600 E. Boulevard Ave.  Dept 127, Bismarck, North Dakota  58505-0599                                             with the preparer.
                                                                                                                              PLEASE DO NOT WRITE IN THIS SPACE
                                           Tax Rate Table
                                $0 - $25,000...............1.41% of North Dakota taxable income
                                $25,000 - $50,000......$352.50 + 3.55% of amount over $25,000
                                Over $50,000.............$1,240.00 + 4.31% of amount over $50,000

                                                                                                                    CIT

- 3 -

    2022 Form 40
    SFN 28740 (12-2022), Page 2
    Schedule SA:  Statutory adjustments
    This schedule is to be used by all corporations regardless of filing method.
    Additions
1.  Federal net operating loss deduction (Federal Form 1120, line 29a)                                         (CA) 1
2.  Special deductions (Federal Form 1120, line 29b)                                                           (CB) 2
3.  All income taxes, franchise or privilege taxes measured by income                                          (CC) 3
4.  Interest on state and local obligations (Excluding North Dakota obligations)                               (CF) 4
5.  Contribution to endowment fund credit adjustment                                                           (CD) 5
6.  Other additions (Attach worksheet)                                                                         (CG) 6
7.  Total additions (Add lines 1 through 6. Enter amount here and on page 1, line 2)                                 7
    Subtractions
8.  Tax refunds received in 2022 (Attach worksheet)                                                            (CH) 8
9.  Foreign Derived Intangible Income Deduction (See instructions)                                             (CJ) 9
10. Interest on United States obligations (Attach statement regarding obligations)                             (CI) 10
11. Allocable income (Attach worksheet)                                                  (LS) 11
12. Related expenses (Attach worksheet)                                                  (LT) 12
13. Balance (Subtract line 12 from line 11)                                                                    (LD) 13
14. IC-DISC distribution to a non-corporate owner (See instructions)                                           (CM) 14
15. Others subtractions (Attach worksheet)                                                                     (CO) 15
16. Total subtractions (Add lines 8, 9, 10, 13, 14 and 15. Enter amount here and on page 1, line 3)                  16

                                 The following questions must be answered
1.  Has the IRS issued a Final Determination that affects a previously filed North Dakota return                            Yes No
     that has not been reported to North Dakota?                                                                        1
2.  Is this return for a tax-exempt organization required to report unrelated business taxable income?                  2
3.  Is this return for a foreign corporation filing Federal Form 1120-F?                                                3
4.  Has this corporation filed as a cooperative, a Foreign Sales Corporation, or a Domestic International
    Sales Corporation for federal purposes?                                                                             4
5.  Is this return for an entity, or does the return include an entity, that filed a Financial Institution Tax return
    (Form 35) for 2012? If yes, mark the circle to indicate if this is an S corporation.                               5
6.  Does this corporation use the combined report method in any other states? If yes, attach a statement
    showing all states where the combined report method is used                                                         6
7.  Does this corporation file its federal income tax return as a member of a
    consolidated group? If yes, please enter the Federal Employer I.D. No.
    under which the consolidated return is filed.                            (AM)                                       7
8.  Does the numerator of the apportionment factor on page 1, line 5 include the property, payroll and/or sales
    of more than one corporation required to file in this state? If yes:                                                8
    Filing method circle on page 1, line 1 must have been marked b1 or c1.
     How many corporations are included in the numerator?    
     Complete North Dakota Schedule CR, Parts I, II and III reporting the activities of
     each company apportioning income to North Dakota.
9.  If this return is filed using the water's edge method, indicate which year of the five-year election this
    return represents. (List number: 1 through 5) 
10. Is this a limited liability company?                                                                              10
11. Are any single member LLC's with business activity or apportionment factors in North Dakota that are
    treated as disregarded entities included in this return? (If yes, attach schedule with names and FEIN)            11
12. Is this corporation or any of its affiliates included in this return a captive real estate investment trust
(REIT)? (If yes, attach schedule with names and Federal I.D. numbers of all captive REITS)                           12
13. Has this corporation changed names, been involved in a merger, reorganization or
    takeover during this tax year? If so, provide former name and details of change.       
                                                                                                               (former name)

- 4 -

2022 Form 40
SFN 28740 (12-2022), Page 3

Schedule FACT: Apportionment factor for corporations NOT filing a
consolidated North Dakota return

This schedule is for corporations that are NOT filing a consolidated North Dakota return, i.e., corporations
using filing method a, b, c, or d on page 1, line 1.

Corporations that are filing a consolidated North Dakota return—i.e., corporations using filing method b1 or
c1 on page 1, line 1— must use Schedule CR, Part II, on page 7. Do not use this schedule.

If a sales factor weighting election applies, skip lines 1-8 and complete lines 9-12, 15 and 16.

Property factor: Average value at original cost of
real and tangible personal property. 1. Total 2. North Dakota 3. Factor
1. Inventories 1 (Use 6-digit
decimal only)
2. Buildings and other fixed depreciable assets 2
3. Depletable assets 3 (North Dakota
divided by Total
4. Land 4 = Factor)
5. Other assets (Attach detail) 5
6. Rented property (Annual rental x 8) 6 (BL)
7. Total property (Add lines 1 through 6) (BH) 7 (BA)

Payroll factor:
8. Wages, salaries, commissions, and other
compensation of employees (BJ) 8 (BC)

Sales factor:
9. Gross receipts or sales (less returns and
allowances, if applicable) 9
10. Sales delivered, shipped, or assignable to North Dakota destinations (BM) 10
11. Sales shipped from North Dakota to the U.S. Government,
or to purchasers in a state or foreign country where the taxpayer
was not subject to a tax measured by net income 11
12. Total sales (Add lines 9 through 11) (BK) 12 (BE)
13. Sum of factors (Add factors in column 3, lines 7, 8 and 12) 13
14. Apportionment factor—If a sales factor weighting election applies, skip this line and go to line 15.
Otherwise, divide line 13 by the number of factors having an amount greater than zero in column 1
on lines 7, 8, and 12. Enter factor here and on page 1, line 5 14

Sales factor weighting election—If a sales factor weighting election applies, skip lines 1-8 and
complete lines 15 and 16. See instructions.
15. a. Sales factor weighting election (Mark box) (BS) b. Year of election period (1-5) (BO)
16. Apportionment factor—Enter the amount from line 12, column 3. Enter factor here and on
page 1, line 5 16

- 5 -

    2022 Form 40
    SFN 28740 (12-2022), Page 4
Schedule TC:  Tax credits
This schedule is to be used by all corporations to report the total allowable credit(s) regardless of filing method.
Corporations filing a consolidated North Dakota tax return, i.e., those corporations using filing method b1 or c1 on page 1,
line 1, report each corporation's separate credits on Schedule CR, Part I, line 19 under each corporation's separate column,
and on Schedule CR, Part III - Tax Credits.
If a credit is being claimed on lines 6-14, 16-18, or 21, a property tax clearance is required for each county the corporation has 50% or
more interest in real property in North Dakota. The tax clearance requirement also applies to any officer responsible for the
corporation's state tax filing or payment obligations. Failure to attach a copy of the property tax clearance for each county
identified below may result in a credit being disallowed. See instructions for details.
Does this requirement apply?       Yes         No  If yes, enter county name(s)
County name(s): _____________________________________________________________________   (GS)
 1.  Contributions to nonprofit private colleges credit                                                 (LK) 1
2.  Contributions to nonprofit private high schools credit                                              (LL) 2
3.  Contributions to nonprofit private primary schools credit                                           (EL) 3
4.  Geothermal, solar, wind, biomass energy device credits carried forward (Attach worksheet)           (LM) 4
5.  Employment of individuals with developmental disabilities or severe mental illness credit           (LX) 5
6.  Research and experimental expenditure credits generated by taxpayer (Attach worksheet)              (LY) 6
7.  Research and experimental expenditure credits purchased by taxpayer (Attach worksheet)              (TO) 7
8.  Renaissance Zone credits (Enter amount from Schedule RZ and attach)                                 (RC) 8
9.  Biodiesel or green diesel fuel production credit (Attach worksheet)                                 (LO) 9
10. Soybean and canola crushing equipment costs credit (Attach worksheet)                               (TB) 10
11. Seed capital business investment credit (Attach documentation)                                      (TS) 11
12. Biodiesel or green diesel fuel blending credit (Attach worksheet)                                   (TD) 12
13. Biodiesel or green diesel fuel sales equipment costs credit (Attach worksheet)                      (TF) 13
14. Agricultural commodity processing facility investment credit (Attach documentation)                 (TE) 14
15. Endowment fund contribution credit (Attach documentation)                                           (TG) 15
16. Internship employment credit (Attach worksheet)                                                     (TI) 16
17. Angel fund investment credit prior to July 1, 2017 carried forward (Attach documentation)           (TJ) 17
18. Workforce recruitment credit (Attach worksheet) Number of qualified employees hired (TT)________    (TW) 18
19. Wages paid to a mobilized military employee credit (Attach Schedule ME)                             (TQ) 19
20. Housing Incentive Fund credit carried forward (Attach documentation)                                (TU) 20
21. Automation tax credit earned prior to January 1, 2018, carried forward (Attach documentation)       (TX) 21
22. Automation tax credit - only for credits attributable to purchases made on or after January 1, 2019 (TZ) 22
23. Contributions to Rural Leadership ND scholarship tuition program credit                             (TY) 23
24. Total tax credits (Add lines 1 through 23. Enter amount here and on page 1, line 19)                24

Schedule WW:  Combined report method income schedule
This schedule is to be used by all corporations using filing methods b or b1 on Page 1, Line 1.
1.  Federal taxable income (Consolidated Federal Form 1120, line 30)                                    (LP) 1
2.  Taxable income or loss included on line 1 from nonunitary corporations (Attach worksheet)           (WN) 2
3.  Balance (Subtract line 2 from line 1)                                                               3
4.   Taxable income or loss not included on line 1 from unitary U.S. corporations required to file
     a federal income tax return (Attach worksheet)                                                     (WU) 4
5.  Book income before income taxes of unitary foreign corporations (Attach worksheet)                  5
6.   Optional:  Book to tax reconciliation (Attach worksheet)                                           6
7.  Subtotal (Add lines 5 and 6)                                                                        (WF) 7
8.  Income or loss from Foreign Sales Corporations, Interest Charge DISCs, and affiliated corporations
     incorporated in a Possession of the U.S. (Attach worksheet)                                        8
9.  Intercompany eliminations for members of the unitary group (Attach worksheet)                       9
10.  Total income (Add lines 3, 4, 7, and 8, and then subtract line 9 from result. Enter amount
     here and on Form 40, page 1, line 1, and mark circle b or b1 on page 1, line 1)                    (WW) 10

- 6 -

2022 Form 40
SFN 28740 (12-2022), Page 5

Schedule WE: Water's edge method income schedule
Worksheets
1. Federal taxable income (Consolidated Federal Form 1120, line 30) (LZ) 1 containing
details of lines 2
2. Income or loss not included in line 1 from affiliated U.S. corporations required to through 7 and
file a federal income tax return (Attach worksheet) 2 10 are required
3. Total income or loss from Foreign Sales Corporations, Interest Charge DISCs,
affiliated corporations incorporated in a Possession of the U.S., and includable
foreign affiliates (Attach worksheet) 3
4. Reversal of intercompany eliminations between water's edge corporations and
non-water's edge corporations (Attach worksheet) 4
5. Intercompany eliminations for water's edge group corporations (Attach worksheet) 5
6. Total foreign dividends included in lines 1 through 4 (Attach worksheet) 6
7. Taxable income or loss included on lines 1 or 2 from 80/20 corps. (Attach worksheet) 7
8. Balance (Add lines 1 through 4, and then subtract lines 5, 6 and 7 from result) 8
9. Foreign dividends to be included in water's edge income (Multiply line 6 by 30%) 9
10. Total net book income of 80/20 corporations (Attach worksheet) 10
11. Net book income of 80/20 corporations to be included in water's edge income
(Multiply line 10 by 30%) 11
12. Total water's edge income (Add lines 8, 9, and 11. Enter amount here and on Form 40,
page 1, line 1, and mark circle c or c1 on page 1, line 1) (WE) 12

Water's edge method election instructions
A corporation required to file its North Dakota • Returns for years two through five are then • Any affiliated unitary foreign or domestic
return using the worldwide unitary combined required to be filed under the water's edge corporation that has income from North
report method must do so unless it elects to method, and circle C or C1 should be marked Dakota sources and is excluded from the
apportion its income using the water's edge for each year. water's edge group because it has less
method. • Marking the circle for years two through five than twenty percent of its average
does NOT constitute new, rolling five-year property and payroll inside the U.S. is
A corporation elects the water's edge method covered by the water's edge election and
by marking the circle entitled "Water's Edge elections. must file its water's edge return computing
Method" (C or C1) on page 1, line 1, for the first • Marking the circle for a sixth year is a new its income based on its single company pro
year of a five-year election. five-year election. forma federal taxable income.
• An election must be made on the return as • If an election is not made for year six, the A corporation electing the water's edge method
originally and timely filed. prior five-year election period lapses, and must include only the apportionment factors
the filing method would be the worldwide and statutory adjustments of the water's edge
unitary combined report method. group.

Schedule WE general definitions
"Water's edge group" includes a U.S. parent "Intercompany eliminations for water's amount of global intangible low taxed income
corporation, affiliated corporations incorporated edge group corporations" are eliminations of under IRC section 951A is considered a foreign
in the U.S. (excluding 80/20 corporations), intercompany transactions between companies dividend. IRC section 78 gross up is not a
affiliated corporations incorporated in a included in the water's edge group. foreign dividend.
possession of the U.S., IC DISCs, FSCs, export
trade corporations and foreign affiliated "80/20 corporation" is a corporation that is "Net book income of an 80/20
corporations which meet a defined minimum of incorporated in the U.S., is eligible to be corporation" means net book income after
U.S. activity. included in the federal consolidated return as taxes for financial statement purposes.
defined in N.D.C.C. § 57-38.4-01(5) and has 20 However, a corporation's net book income
"Affiliated corporation" means a parent percent or less of its average property and cannot be offset by a net book loss from
corporation and any corporation of which more payroll for the tax year assigned to locations another 80/20 corporation.
than fifty percent of the voting stock is owned inside the fifty states, the District of Columbia,
directly or indirectly by the parent corporation and possessions of the United States. "Rescission of a water's edge election". A
or another member of the water's edge group. corporation's water's edge election is rescinded
"Foreign dividends" means any dividend if:
"Reversal of intercompany eliminations received by a member of the water's edge group
between water's edge corporations and from any affiliated corporation incorporated • It has had more than 50% of its voting
80/20 corporations" means the reversal of outside the fifty states and District of Columbia, stock acquired by a nonaffiliated
eliminations made between water's edge including amounts included in income computed corporation;
corporations and 80/20 corporations that are under sections 951 through 954 of the Internal • It was formed as the result of a
included in the federal consolidated return. Revenue Code (IRC) of 1986, as amended. The reorganization or spinoff and is no longer a
Dividends, interest, royalties, capital gains and member of the water's edge group; or
losses, intercompany profit on sales, etc.
between water's edge corporations and 80/20 • It is completely liquidated. The water's
corporations that have been eliminated in edge election of any corporation receiving
preparing the consolidated federal return must liquidated assets is not affected.
be reversed.

Additional Information Regarding The Water's Edge Method Is Contained In N.D.C.C. ch. 57-38.4 and N.D. Admin. Code ch. 81-03-05.2

- 7 -

    2022 Form 40
    SFN 28740 (12-2022), Page 6

Schedule CR, Part I:  Computation of tax due for corporations included in a North Dakota consolidated return
                      Corporation  Name of corporation                                            Federal Employer I.D.
List corporations
apportioning income to   A
North Dakota with a                                                                             
factor greater than -0-
first. Also list each    B                                                                      
company it declares to
have filed a North       C                                                                      
Dakota tax return. See
instructions.                                                                  Corporation A    Corporation B Corporation C
                                                                             ______________  ______________   ______________
                                                                                   (name)        (name)       (name)
                                                                             ______________  ______________   ______________
                                                                                   FEIN           FEIN        FEIN
                                                                            ______________ ______________ ______________
                                                                             Business Code      Business Code Business Code
 4. North Dakota apportionable income (Enter amount in
    Columns A, B & C from Form 40, page 1, line 4)                   (CX) 4
 5. Apportionment factor (Enter factor from Part II, line 14 or 16)  (LE) 5
 6. Income apportioned to North Dakota (Line 4 multiplied by line 5)        6
 7. Income allocated to North Dakota $ ______________ less
    related expenses $ ______________                                (LF) 7
 8. North Dakota income (Add lines 6 and 7)                                 8
9.  Exemption for new and expanding business (Attach worksheet)      (CL) 9
10. Renaissance zone income exemption                                (RE) 10
11. ND income after income exemptions (Subtract lines 9 and 10
    from line 8)                                                     11
12. North Dakota loss carryforward (Attach worksheet)                (LH) 12
13. Subtotal (Subtract line 12 from line 11)                         13
14. Gross proceeds allocated to ND from sale of research tax
    credit (See instructions)                                        (EF) 14
15. North Dakota taxable income   (See instructions)                 (LI) 15
16. Income tax due (See tax rate table on Form 40, page 1)           (EE) 16
17. Surtax on water's edge method election (3.5% of line 15)         (ST) 17
18. Total income tax due (Add lines 16 and 17)                       (LJ) 18
19. Tax credits (Enter each company's credits from Schedule CR,
    Part III, line 24)                                               (AZ) 19
20. Net income tax liability (Subtract line 19 from line 18)         20
    a. Net income tax due (Add amounts on line 20, for all corporations. Enter total here and on
    page 1, line 20 and complete lines 21 through 23, on page 1)                                  (GA) 20a

                      Instructions for consolidated return using the combined report method

All corporations filing a consolidated       space is needed for additional               Schedule CR has been designed so the
North Dakota return (i.e. unitary groups     corporations having activity within North    instructions for Form 40 in the booklet
including more than one company on this      Dakota, additional copies of Schedule CR     also apply to the line numbers on
return) must complete the three parts of     can be obtained by photocopying both         Schedule CR. For example, the
Schedule CR and attach the completed         parts of this original schedule or by        instructions for page 1, lines 5-20 also
schedule to                                  printing additional copies from our          apply to Schedule CR, part I, lines 5-20.
Form 40 when filed.                          website at www.tax.nd.gov/forms.
                                                                                          After completing Schedule CR, part I,
Space has been provided for three            Complete page 1, lines 1-4 before            total lines 5 through 19 and enter each
corporations (corporations A, B & C)         starting to complete Schedule CR,            total on the corresponding line on
having activity within North Dakota. If      part I.                                      page 1.

- 8 -

2022 Form 40
SFN 28740 (12-2022), Page 7
Schedule CR, Part II: Computation of factor for corporations filing a North Dakota
consolidated return
Note: When dividing numbers, carry the result All Combined Corporation A Corporation B Corporation C
Corporations
out to six decimal places If a sales factor ______________ ______________ ______________
weighted election applies, skip lines 1-8 and (Name) (Name) (Name)
complete lines 9-12, 15 and 16
______________ ______________ ______________
FEIN FEIN FEIN
Property Factor: Everywhere
Average value at original cost of real and Average Property North Dakota Average Property
tangible personal property
1. Inventories 1
2. Buildings and other depreciable assets 2
3. Depletable assets 3
4. Land 4
5. Other assets (Attach detail) 5
6. Rented property (Annual rent x 8) 6 (BL)
7. Total average property
(Add lines 1 through 6) (BH) 7 (BA)
a. Property factor (Divide ND property by Everywhere property) 7a
b. Total property factor (Add amounts on line 7a, columns A, B, and C) 7b
Payroll Factor:
Wages, salaries, commissions and other
compensation of employees Everywhere Payroll North Dakota Payroll
8. Payroll (BJ) 8 (BC)
a. Payroll factor (Divide ND payroll by Everywhere payroll) 8a
b. Total payroll factor (Add amounts on line 8a, columns A, B, and C) 8b

Sales Factor:
Gross receipts or sales (less returns and allowances,
if applicable) Everywhere Sales North Dakota Sales
9. Everywhere sales 9
10. Sales delivered, shipped, or assignable to ND destinations (BM) 10
11. Sales shipped from ND to the U.S. Government, or to
purchasers in a state or foreign country where the taxpayer
was not subject to a tax measured by net income 11
12. Total sales (Add lines 9 through 11) (BK) 12 (BE)
a. Sales factor (Divide ND sales by Everywhere sales) 12a
b. Total sales factor (Add amounts on line 12a, columns A, B, and C) 12b
13. Sum of the factors (Add lines 7a, 8a and 12a) 13
14. Apportionment factor—If a sales factor weighting election
applies, skip lines 14 and 14a and go to line 15. Otherwise,
divide line 13 by the number of factors having an amount greater
than zero in the Everywhere column on lines 7, 8, and 12.
Enter factor here and on Schedule CR, Part I, line 5 14
a. Total factor (Add amounts on line 14, columns A, B, and C). Enter result here and on page 1, line 5 14a

Sales factor weighting election—If a sales factor weighting election applies, skip lines 1-8 and complete lines 15a-16a.
See instructions.
15. a. Sales factor weighting election (Mark box) (BS) b Year of election period (1-5) (BO)________
16. Apportionment factor- Enter the amount from line 12a.
Enter the factor here and on Schedule CR, Part I, line 5 16
a. Total factor (Add amounts on line 16, columns A, B, and C). Enter result here and on page 1, line 5 16a

- 9 -

    2022 Form 40
    SFN 28740 (12-2022), Page 8

Schedule CR, Part III:  Tax credits for corporations filing a North Dakota consolidated
                                return using the combined report method

If a credit is being claimed on lines 6-14, 16-18, or 21, a property tax
clearance is required for each county the corporation has 50% or more interest
in real property in North Dakota. The tax clearance requirement also applies to
any officer responsible for the corporation's state tax filing or payment
obligations.  Failure to attach a copy of the property tax clearance for
each county identified below may result in a credit being disallowed.
See instructions for details. Does this requirement apply?     Yes         No
If yes, enter county name(s).
                                                                                Corporation A Corporation B Corporation C
County name(s): ___________________________________________  (GS)
                                                                                __________    __________    __________
                                                                                (name)        (name)        (name)
                                                                                __________    __________    __________
                                                                                FEIN          FEIN          FEIN

1. Contributions to nonprofit private colleges credit                    (LK) 1
2. Contributions to nonprofit private high schools credit                (LL) 2
3. Contributions to nonprofit private primary schools credit             (EL) 3
4. Geothermal, solar, wind, biomass energy device credits
    carried forward (Attach worksheet)                                   (LM) 4
5. Employment of individuals with developmental disabilities or
    severe mental illness credit                                         (LX) 5
6. Research and experimental expenditure credits generated by
    taxpayer (Attach worksheet)                                          (LY) 6
7. Research and experimental expenditure credits purchased
    by taxpayer (Attach worksheet)                                       (TO) 7
8. Renaissance Zone credits (Enter amount from Schedule RZ
    and attach)                                                          (RC) 8
9. Biodiesel or green diesel fuel production credit (Attach worksheet)   (LO) 9
10. Soybean and canola crushing equipment costs credit
    (Attach worksheet)                                                   (TB) 10
11. Seed capital business investment credit (Attach documentation)       (TS) 11
12. Biodiesel or green diesel fuel blending credit (Attach worksheet)    (TD) 12
13. Biodiesel or green diesel fuel sales equipment costs credit
    (Attach worksheet)                                                   (TF) 13
14. Agricultural commodity processing facility investment credit
    (Attach documentation)                                               (TE) 14
15. Endowment fund contribution credit (Attach documentation)            (TG) 15
16. Internship employment credit (Attach worksheet)                      (TI) 16
17. Angel fund investment credit prior to July 1, 2017 carried
    forward (Attach documentation)                                       (TJ) 17
18. Workforce recruitment credit (Attach worksheet)                      (TW) 18
    a. Number of qualified employees hired (TT)_____________
19. Wages paid to a mobilized military employee credit
 (Attach Sch. ME)                                                        (TQ) 19
20. Housing incentive fund credit carried forward
 (Attach documentation)                                                  (TU) 20
21. Automation tax credit earned prior to January 1, 2018
    carried forward                                                      (TX) 21
22. Automation tax credit - only for credits attributable to
 purchases made on or after January 1, 2019                              (TZ) 22
23. Contributions to Rural Leadership ND scholarship tuition
 program credit                                                          (TY) 23
24. Total tax credits (Add lines 1 through 23. Enter amount here
    and on page 6, line 19)                                              24

PDF file checksum: 734361584

(Plugin #1/9.12/13.0)