Colorado – Alternative apportionment allowed for a bank’s investment and trading receipts

April 2013

Overview

In a Private Letter Ruling, the Colorado Department of Revenue allowed a bank to utilize a market-based alternative apportionment method to source receipts derived from investing and trading activities. The regulatory apportionment method sources such receipts to the location of day-to-day decisions regarding the investment or trading activity. The Department found that this method is not an accurate reflection of the market giving rise to the receipts. Accordingly, the Department authorized the bank to source investment and trading receipts to the location of its customers that provided the taxpayer the funds to invest and trade. This ruling may provide guidance to Colorado taxpayers requesting an alternative apportionment method. [Colorado Department of Revenue Private Letter Ruling No. PLR13-001 (1/24/13)]

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Peter Michalowski
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