Sec.  36.412   Apportionment procedures.

   (a) For apportionment purposes, the expenses in this account are segregated
   into two groups as follows: (1) Operating Federal, State and local income
   taxes and (2) all other operating taxes.

   (b) Operating Federal, State and local income taxes are apportioned among
   the operations on the basis of the approximate net taxable income (positive
   or negative) applicable to each of the operations. The approximate net
   taxable income from each of the operations is the summation of the following
   amounts apportioned to each operation by means of the procedures set forth
   in this Manual:

   (1) Operating revenues,

   (2) Less operating expenses,

   (3) Less operating taxes except the net income tax being apportioned and
   except any other tax not treated as a deductible item in the determination
   of taxable net income for this purpose.

   (4) Less operating fixed charges.

   (i) The amount of fixed charges attributable to the operations is obtained
   by subtracting the tax component (positive or negative) attributable to
   other than the operating fixed charges, i.e., fixed charges on non-operating
   investments are that proportion of total fixed charges which non-operating
   net investments are of total operating and non-operating net investments.

   (ii) Operating fixed charges including interest on Rural Telephone Bank
   Stock are apportioned among the operations on the basis of the separation of
   the cost of telephone plant less appropriate reserves.

   (c) Other operating taxes should be directly assigned to the appropriate
   jurisdiction where possible, e.g., Local Gross Receipts may be directly
   identified as applicable to one jurisdiction. Where direct assignment is not
   feasible, these expenses should be apportioned among the operations on the
   basis  of  the  separation  of the cost of Telecommunications Plant in
   Service—Account 2001.

Equal Access Expenses