Special rules - Airlines.

81-03-09-36. Special rules - Airlines. The following special rules are established with respect to airlines: 1. In general. Where an airline has income from sources both within and without this state, the amount of business income from sources within this state shall be determined pursuant to 24 North Dakota Century Code chapter 57-38.1 and article IV of North Dakota Century Code section 57-59-01 of the multistate tax compact, except as modified by this section. 2. Apportionment of business income. a. General definitions. The following definitions are applicable to the terms used in the apportionment factor descriptions: (1) "Value" of owned real and tangible personal property means its original cost. See North Dakota Century Code section 57-38.1-11 and article IV(11) of North Dakota Century Code section 57-59-01 and section 81-03-09-19. (2) "Cost of aircraft by type" means the average original cost or value of aircraft by type which are ready for flight. (3) "Original cost" means the initial federal tax basis of the property plus the value of capital improvements to such property, except that, for this purpose, it must be assumed that safe harbor leases are not true leases and do not effect the original initial federal tax basis of the property. See section 81-03-09-19. (4) "Average value" of property means the amount determined by averaging the values at the beginning and ending of the income year, but the office of the state tax commissioner may require the averaging of monthly values during the income year if such averaging is necessary to reflect properly the average value of the airline's property. See North Dakota Century Code section 57-38.1-12 and article IV(12) of North Dakota Century Code section 57-59-01 and section 81-03-09-21. (5) The "value" of rented real and tangible personal property means the product of eight times the net annual rental rate. See North Dakota Century Code section 57-38.1-11 and article IV(11) of North Dakota Century Code section 57-59-01 and section