If an airline has income from sources both within and outside this state, the amount of business income from sources within this state must be determined in accordance with 15 AAC 19.1100 - 15 AAC 19.1190. In such cases, the first step is to determine which portion of the airline's income constitutes "business" income and which portion constitutes "nonbusiness" income under AS 43.19.010, Article IV.1 and under 15 AAC 19.011 and 15 AAC 19.031. Nonbusiness income is directly allocable to specific states under the provisions of AS 43.19.010, Article IV.5 - .8. Business income is apportioned among the states in which the business is conducted in accordance with the property, payroll and sales apportionment factors set out in this chapter. The sum of (1) the items of nonbusiness income directly allocated to this state, plus (2) the amounts of business income attributable to this state constitutes the amount of the taxpayer's entire net income which is subject to tax by this state.

(Eff. 3/31/82, Register 81)