NAC706.401977. Account for accrued federal income taxes.

     1. The account for accrued federal income taxes must include the amount of federal income taxes accrued during the accounting period. Concurrent charges for tax accruals must be made to the account for federal income taxes on earnings described in subsection 2 of NAC 706.401995. As the exact amount of taxes becomes known, the current tax accruals must be adjusted accordingly. Payments of income taxes must be charged to the account for accrued federal income taxes so that it may reflect as accurately as possible the actual taxes payable.

     2. Accruals for federal income taxes must not include any amounts for interest or penalties on tax deficiencies, payments or refunds. Interest received on refunds must be credited to the account for interest earned described in subsection 1 of NAC 706.401993, and interest paid on deficiencies must be charged to the account for interest expense described in subsection 1 of NAC 706.401994. Penalties must be charged to the account for miscellaneous other expenses described in subsection 4 of NAC 706.401994.

     3. Each entry credited to the account must be supported by work papers or records showing in detail how the income tax liability was determined and the necessary accruals.

     4. As used in this section, “actual taxes payable” means the amount of tax calculated for the purposes of federal income tax. The term includes those expenses or deductions not allowable as operating revenue deductions for regulatory purposes but allowed or allowable as deductions for the purposes of federal income tax taken by the company, as elected by the company or as required by law, in computing the income tax of the company, including, without limitation, by accelerated depreciation, additional first-year depreciation, interest expense, donations, nonrecurring or extraordinary charges, investment credit and other similar items.

     (Added to NAC by Transportation Serv. Auth. by R040-02, eff. 9-20-2002)