The Southdale Mall in Minnesota was the subject of a different assessment decision against business enterprise value.(15) In this case, the court rejected the owner's argument that a large portion of the income stream was attributable to intangible personal property
. This case epitomizes one of the most significant problems relating to BEV theory: No one has been able to prove it exists.
During its December 5 meeting with the Department of Finance, TEI raised concerns about zero-rating for intangible personal property
under the Excise Tax Act and harmonization of the various sales tax systems in Canada.
This provides (in part) that, when the income-producing activity for business income from intangible personal property
can be readily identified, the DOR may adjust the apportionment formula if the application of the standard (three-factor) formula does not fairly represent a taxpayer's New Mexico business activities.
The current edition of The Appraisal of Real Estate defines business enterprise value (BEV) as a value enhancement that results from items of intangible personal property
such as marketing and management skill, an assembled work force, working capital, trade unions, franchises, patents, trademarks, non-realty related contracts/leases, and some operating agreements.(1) The text also demonstrates how BEV might be estimated, and offers important information on the issues surrounding BEV.
Is the Department of Finance considering implementing any changes to the zero-rating provisions for intangible personal property
or services to take into account issues arising from the increased use of electronic commerce?
In addition, the DOR's treatment of intangible personal property
is in lieu of the MTC Statement's "unprotected activities," under which nexus is created by entering into franchising or licensing agreements and by selling or otherwise disposing of franchises and licenses.
Going-concern value refers to the total value of a property, including both real property and intangible personal property
attributed to business value.
Excise tax issues included in the Department of Finance agenda related to the zero rating of intangible personal property
to take into account electronic commerce issues, harmonization of provincial sales taxes, and the need to simplify and expand the rules for tax-free transfers of business assets.
The sales factor normally includes (but is not limited to) gross sales (less returns and allowances), fees and commissions received from the performance of services, rents and lease payments received from renting real or tangible property, proceeds from the disposition of other tangible and intangible assets, and royalties and other payments received from the sale, assignment or licensing of intangible personal property
(such as patents and copyrights).
Intangible personal property
is exempt from tax in about 30 states, but the specific applicability of this exemption may vary.
The second and fifth Guideline provisions essentially provide that maintenance of intangible personal property
in the taxing state is sufficient to create enough "physical presence" to justify imposition of sales or use tax.
Effective December 1, 1994, the Department will treat the software component of imported licensed custom software as intangible personal property
, which will be taxed in one of two ways: