1. 1. Averaging of monthly values will generally be required if substantial fluctuations in the values of the property exist during the tax period or if property is acquired after the beginning of the tax period or disposed of before the end of the tax period.

   Example: The monthly value of the taxpayer’s property is as follows:

   January	$2,000	July	$15,000
   February	$2,000	August	$17,000
   March	$3,000	September	$23,000
   April	$3,500	October	$25,000
   May	$4,500	November	$13,000
   June	$10,000	December	$2,000
   Subtotal	$25,000	Subtotal	$95,000
   		Total	$120,000

   The average monthly value of the taxpayer’s property includable in the property factor for the income year is $10,000 (120,000 divided by 12).

2. 2. Rented property is averaged by determining the net annual rental rate of the property.

The Department may require or allow averaging of monthly values if that method is required to properly reflect the average value of a taxpayer’s property for the tax period. The Department shall not require the averaging of monthly values if that method has a de minimis effect on a taxpayer’s Arizona tax liability for the tax period.

Historical Note

Recodified at 6 A.A.R. 2308, filed in the Office of the Secretary of State June 2, 2000 (Supp. 00-2). Amended by final rulemaking at 7 A.A.R. 4973, effective October 5, 2001 (Supp. 01-4).