¹ See News Notes, “AJCA,” 36 The Tax Adviser 4 (January 2005) and Morris, Tax Clinic, “The AJCA’s FAS No. 109 Implications,” 36 The Tax Adviser 255 (May 2005).

² See IRC Sec. 199(b)(1). Typically, expenses will be apportioned to DPGR using the IRC Sec. 861 sourcing rules.

³ Generally, this is a Federal affiliated group with the ownership threshold reduced to 50%.

⁴ Additional first-year depreciation was provided by the Jobs and Growth Tax Relief Reconciliation Act of 2003.

⁵ More than 20 states decoupled from Federal bonus depreciation.

⁶ Charlotte Cuno v. DaimlerChrysler, Inc., 6th Cir., 9/2/04.

⁷ Georgia’s HB 488 moved its IRC conformity date to Jan. 1, 2005, except for IRC Sec. 199’s DPAD provision. A provision of HB 343 moved Maine’s conformity date to Dec. 31, 2004, but requires taxpayers to add back the Federal deduction taken for IRC Sec. 199 domestic production activity. Massachusetts’ HB 5156 decoupled from the Federal production activity deduction as “necessary for the immediate preservation of the public convenience.” North Dakota’s HB 1108 requires adding back the deduction taken under IRC Sec. 199 to the extent taken in determining Federal taxable income. West Virginia’s SB 614 disallows an IRC Sec. 199 deduction.

⁸ See “Most States Will Conform to Sec. 199 Qualified Production Activity Income Deduction, Results of Survey of Tax Administrators,” FTA Bulletin B-25/05 (6/7/05), available at www.taxadmin.org, under “State Comparisons.”

⁹ See id. (AL, AZ, CO, CT, FL, ID, IA, KS, KY, MO, MT, NM, OH, OK, UT and  VA).

¹⁰ See id. (AK, DE, IL, LA, MI, NE, NY, OR, PA, VT and WI).

¹¹ See id. (AR, DC, GA, HI, IN, ME, MD, MA, MS, NC, ND, TN, TX and WV).

¹² See id. (CA, MN, NH, NJ, RI and SC).

¹³ S.C.C.A. 12-6-50(7).            

¹⁴ M.S. 290A.03.3(b)(xiv).

¹⁵ N.J.S.A. 54:10A-4(k)(2)(J).

¹⁶ Except in the case of flowthrough entities.

¹⁷ See IRC Sec. 199(d)(4)(B).

¹⁸ AL, DE, IA, KY, LA, MO, OK, PA, VT and WI.