|(a) Effective date. This section applies to reports originally due on or after January 1, 1994. (b) Presumption. All income is presumed to be unitary income. Factors in determining whether income is unitary are: centralization of management, functional integration, and economies of scale. Income may only be allocated when the income is in the nature of an investment, rather than operational. (c) Allocation. (1) If it is determined that an item of income is non-unitary, with the exception of dividends and interest, it will be allocated to Texas net of related expenses, rather than apportioned, if Texas is the corporation's commercial domicile. (2) If it is determined that an item of income is non-unitary and it is allocated, rather than apportioned, but not to Texas because the corporation's commercial domicile is not in Texas, the allocation must be net of related expenses.
(3) Non-unitary income and its related expenses must be excluded in determining apportioned earned surplus.