200404085th Response of Avista to Staff Part II.pdf

Form 3115
(ReY. "'Y 1999)Application for Change in Accounting Method OMB No. 1545-0152
cepanmenta, III. Tr..sury
Inlern" ".....nue Se...,e See page' of the instructions for Autol)'atic Change Procedures.
Name of applic3nt (If joint retum is filed, also gIVe spouse s name.Identifying number (See page 3 of the instructions.
Avista Corporation 91-0462470
Huma.', rtr..~ In~ 'aam or lu~e no. (/II P.o. ba., Ie. paso 3 01111. InllNctiDnl.Tax year of change begins (mo., day, yr.and ends (mo., day, yr.
E 14' 1 Mission Avenue 1/112002 to 12/3112002
City or town, state, and ZIP code District director s office having jurisdiction
Spokane, WA 99202 LMSB
Name or p...an to .anlact (/I not III. Ipplicln~ , power 0' Illarnay mull b. suOmftiea.Contact person s telephone number Fax number
Jan Skelton [phone] [phone]
Check the appropriate box to indicate Check the appropriate box to indicate the type ofwho is filing this form. DPartnershiP accounting method change being requested.
Individual S Corporation (See page 3 of the instructions.
CD Corporation D'nsu",n.. Co. (5..: 816(a))
DCooperative (Sec. '38')D'nsu",n.. CD. (5... 831)Depreciation .or Amortization
DOualified Personal Service Corp.DOther (specify)Financial Products and/or Financial Activities of
(Sec. 448(d)(2))Financial Institutions
Exempt organization. Enter code section (KJOther (specify) - Sec. 263A - Indirect Costs
;;'cJot f-~
Part I EliQibili To Re uest Chan ,'Alr IPpticlnt..ampl.te Parts I Ihrauph 1V.)(See page2arth. Inswc:tiDnl.
Is the applicant changing its method 01 accounting under a revenue procedure Dr published guidance that
provides for an automatic change? (See page' of the instructions.
) . . . .' . . . . . . . . . . . . . . . , . . . '' . .
If "Yes: enter the citation of the revenue procedure or other published guidance Rev. Proc. 2002.9 App Sec 4.
Is the applicant changing its method of accounting under sections 263A, 447, 448, 460, or S85(c) for the first tax year
theapplicantisrequiredtochange7
. .
If "Yes " the applicant is required to make the change in accounting method under the automatic change procedures
set forth in the applicable regulations.
3a Does the applicant have any Federal income tax returns under examination by the IRS? See section 3.07 of Rev.
Proc.g7-'997.'C.680.
If ""Y'es," complete line 3b.
b Is the method of accounting the applicant is requesting to change: (i) an issue under consideration or (ii) an issue
placedinsuspensebytheexaminingagent(s)?Seesections3.08p)and6.0'ofRev.Proc.97-2 .
. . .... . . "
If .Yes," the applicant is not .eligible to request the change in accounting method. If "No," complete lines 3c through 3e.
c Indicate the "window period" the applicant is filing under or state if the change is being requested with the .consent ofthe district director. See section 6.0' of Rev. Proc. 97-27.
d Has a copy of this Form 3"5 been provided to the examining agent(s) for all examinations that are in process? See
section6.0'ofRev.Proc.97-
. ....
e Enter the name(s) and telephone number(s) of the examining agent(s).
See section 6.01 of Rev. Proc. 97-27.
4a Is the applicant before an appeals office with respect to any Federal income tax return issue?
If "Yes " complete line 4b.
b Is the method of accounting the applicant is requesting to change an issue under consideration by the appeals
office? See sections 3.08(2) and 6.02 of Rev. Proc. 97-27 . N/A. . . .
. . . . . . . . . . . . . . . . . . .
If "Yes," the applicant is not eligible to request the change in accounting method. If "" complete lines 4c and 4d.
C Has a copy of this Form 3'15 been provided to the appeals officer? See section 6.02 of Rev. Proc. 97-27 N/A.
. . . . ., . . . .
d Enter the name and telephone number of the appeals officer. N/A
See section 6.02 of Rev. Proc. 97-27.
. . . . . . . . . . . . . .. . . . . .
Signature - All Applicants (See page 3 of the instructions.
Under penalties of perjury, I d!,~lere thaI I heve examined this appli~ation, including accompanying documents, end
. '
to the best 01 my knC'NIedge and belief, the
appli~ation ~ontains eilltle relevenl ta~s relating 10 the appli~alion, and suCh facts are true, ~orrecl, and complete De~lanltion of prepare' (other than appli~ant) is
besed on all information of which preparer has any knowledge.
Applicant
.......
it. 6...il.L~
.....................
2._
:..
t.:..
(!...
2.............
Officers signature and date
./JJ?)iq.'!2
~~_
.A.r.Lt.-I..e.ni.Gji!.c
-'7'
;d title (print or type)
~~;;
~;;f,;;?~.--
For Paperwork Reduction Act Notice, see page' of the instructions,
Parent corporation (if applicable)
.....-.........................-..............................-.............-..............-......-................-
Parent olfl~ers signature and date
-.--.-...................-...oo.......................................oo........oo........-........................
Name and title (print or type)
Oeloitte & Touche, LLP.-.......-...............oo..............oo..oo.........oo.........oo...............................................-...
Name of firm preparing the appli~ation
Form 31'5 (Rev. 5-99)
9'-0462470 Page 2
(continued)
5a Is the applicant before a Federal court with respect to any Federal income tax issue?
. . , .
If "Yes " complete line 5b.
b Is the method of accounting the applicant is requesting to change an issue under consideration by the Federal court?
Seesections3.08(3)and6.030tRev.Proc.97-
. .. .
If "Yes: the applicant is not eligible to request the change in accounting method. If ". complete line 5c and 5d.
c Has a copy of this Form 3'15 been provided to the counsel for the government? See section 6.03 of
. . . . . . . . . .
d Enter the name and telephone number of the counsel for the government.
See section 6.03 of Rev. Proc. 97-27.
6a Is the applicant a member of an affiliated group filing a consolidated retum for the year of change?
. . . . . . . . . .
b If "Yes: attach a statement listing the parent corporation s (') name , (2) identification number, (3) address, and (4) tax year.
c Has the applicant ever been a member of a consolidated group other than the current 'group? . .
. . . . . . . . . . . . . .
If "Yes: complete line 6b for each group of which the applicant was formerly a member.
d If the applicant is (or was formerly) a member of a consolidated group, is any consolidated group under examination
before an appeals office, or before a Federal court for a tax year(s) that the applicant was a member of. the group?
Seesection3.07(')and4 02(5)ofRev Proc.97-27
. .. .. .......
If "Yes: complete lines 3b through 3e, 4b through 4d, or 5b through 5d (whichever are applicable).
If the applicant is an entity (including a limited liability company) treated as a partnership or an S corporation for Federal
income tax purposes , is the method of accounting the applicant is requesting to change an issue under consideration
in an examination of a partner, member, or shareholders Federal income tax return or an issue under consideration.
by an appeals office or by a Federal court with respect to a partner, member, or shareholder s .Federal income tax
return? See sections 3.08 and 4.02(6) of Rev. Proc. 97-27 . . . .
. . . . . . . . . .. .....
If "Yes: the applicant is not eligible to request the change in accounting method.
Part II Oescri tion of Chan e
Is the applicant requesting to change its overall method of accounting?
. . . . . . . . .. .,..
If .Yes: check the appropriate boxes below to indicate the applicant's present and proposed methods of accounting.
Also complete Schedule A on page 4 of the form.
Present method: .DCash DAccrual 0 Hybrid (attach description)
Proposed method: DCash 0 Accrual 0 Hybrid (attach description)
If the applicant is not changing its overall method of accounting, attach a description of each of the following: SEE ATTACHMENT
a The item being changed.
b The applicant's present method for the item being changed.
c The applicanfs proposed method for the item being changed.
d The applicant's present overall method of accounting (cash, accrual, or hybrid).
10 Attach an explanation of the legal basis supporting the proposed method for the item being changed. Include all . SEE ATTACHMENT
authority (statutes, regulations, published rulings , court cases, etc.) supporting the proposed method. The applicant is
encouraged to include a discussion of any authorities that may be contrary to the proposed method.
11 Attach a description of the-applicant's trade or business , including the goods and services it provides and any other
types of activities it engages in that generate gross income.
12 Attach a copy of all documents directly related to the proposed change. (See page 3 of the instructions.
13 Attach a statement of the applicant's reasons for the proposed change.
14a Attach an explanation of whether the proposed method of accounting will be used for the taxpayer's books and
records and financial statements. (Insurance companies, see page 3 of the instructions.
b Attach an explanation of whether the proposed method of accounting conforms to generally accepted accounting
principles (GAAP) and to the best accounting practice in the applicant's trade or business.
15a Does the applicant have more than one trade or business as defined in Regulations section' ,446-' (d). . . .
. . . . . .
b If "Yes," is each trade or business accounted for separately?
. . . . . . . . . . , . .. .' . . . . . . . . . . . .
If .Yes . for each trade or business, attach a description of the type of business the overall method of accounting,
whether the business has changed any accounting method in the past 4 years, and whether the business is changing
any accounting method as part of this application or as a separate application.
16 If the applicant is a member of an affiliated group filing a consolidated return for the year of change , do all other
members of the consolidated group use the proposed method of accounting for the item being change. . .
. . . . . . . . . . .
If "No," attach an expianation.
17 If the applicant is changing to the cash method, or to the inventory price index computation (IPIC) method under.
Regulations section , .~72-8(e)(3). or is changing its method of accounting under sections 263A, 448, or 460, enter the
gross receipts for the 4 tax years preceding the year of change. (See page 3 of the instructions.
1 sl preceding 2nd preceding 3rd preceding 4th preceding
year ended: mo.12 yr. 2001 year ended: mo.12yr.2000yearended: mo.12yr.i99 year ended: mo. 12 yr. 1996
S 5 72'373 65' S 7.316 852 391 S 7 687 582 363 S 3 556 69'980
. . . . . . . . . . . . .
SEE ATTACHMENT
SEE ATTACHMENT
SEE ATTACHMENT
SEE ATTACHMENT
j 26
Form 31'5 (Rev. 5-99)
Part II Description of Change (continued)
18 Attach a statement addressing whether the applicant has entered (or is considering entering) into a transaction to which
section 38' (c)(4) or (c)(5) applies (e., a reorganization or merger) during the tax year of change. Also include in the
statement an explanation of any changes in method of accounting that resu"ed (or will result) from the transaction(s).
Part III Section 481 a Ad'ustment
19 Enter the net section 4B1(a) adjustment lor t.,~ ~'~ar of cha~ge. Indicate whether the adjustment is an increase (+) or
a decrease H in income. . J; '~l !'3/ '31'
j~)
20 Hasthesectlon48,(a)adJustmentbeenre!ducedbyapre-'954amount?
. .
21 a If the section 48' (a) adjustment is less than $25 000 (positive or negative), does the applicant elect to take the entire
amount of the adjustment into account in the year of change? . .
. . . . . . . . . . . . . . . . . ." . . ., ., . .
If No," (or if the applicant declines to elect to take the entire amount of the adjustment into account in the
year of change), enter the applicable period over which the applicant proposes to take the adjustment intoaccount. ear
22 Is any part of the section 48'(a) adjustment attributable to transactions betWeen members of an affiliated group, a
controlled group, Dr other related parties? "
. . , . . . . . . . . . . . . . . . . . . . . . . . . .
If "Yes," attach an explanation.
Part IV Additionallnformation
23 Has the applicant, its predecessor, or a reiated party requested Dr made (under either an automatic change procedure or a procedure
requiring advance consent) a change in accounting method or accounting period in the past 4 years?
. . . . . . . . . . . . .
If "Yes," attach a description of each change and the year of change. SEE ATTACHMENT
If the application was withdrawn, not perfected , Dr denied, or if a Cons~~t Agreement was sent to the taxpayer but
was not signed and returned to the IRS. or if the change was not made..!r\clude an explanation. "
24 Does the applicant, its predecessor, Dr a related party currently have pending any request for a private letter ruling,
a request for change in' accounting method or accounting period, or a request for technical advice?
. . . . . . . . . . . . . . .
If Yes," for each request, indicate the name(s) of the taxpayer, the type of request (private letter ruling, request for
change in accounting method or accounting period, or request for technical advice), and the specific issue in therequest.
2S Has the applicant attached Form 2B48, Power of Attorney and Declaration of Representative? (See the instructions for
line 25 and .Person To Contact" on page:3 of the instructions.
) .. . . . . . . . ". . ." . . . . ". . . . . . . .
Does the applicant request a conference of right at the IRS National Office if the IRS proposes an adverse
response?
.... .
27 Enter the amount of user fee attached to t/i'is application. $ NONE (See page 2 of the
instructions~)
28 If the applicant qualifies for a reduced user fee for identic~1 accounting method changes; has the information required
bysection'5.O70fRev.Proc.99-'999-1I.R.beenattached
. .9'-0462470 Page :3
SEE ATrACHMENT
. . . . . .. . .
Form 3'15 (Rev . 5-99) 9' .0462470
Schedule A - Chanqe in Overall Method of Accounting (If Schedule A applies, Part I must be completed NIA
Attach copies of the profit and loss statement (Schedule F (Form' 040) for farmers) and the balance sheet , if applicable, as of the close
of the tax year preceding the year of change: On a separate sheet, state the accounting method used when preparing the balance
sheet. If books of account are not kept, attach a copy of the business schedules submitted with the Federal income tax return or .other
return (e.g., tax-exempt organization returns) for that period. If the amounts in Part I, lines 1a through 19, do not agree with those
shown on both the profit and loss statement and the balance sheet, explain the differences on a separate sheet.
Part I Change in Overall Method (See page 3 of the instructions.N/A
Enter the following amounts as of the close of the tax year preceding the year of change. If none, state "None." Also attach a
statement providing a breakdown of the amounts entered on lines 1a through 19.
Page 4
alncomeaccruedbutnotreceived
. ... .. .. .. .. .
b Income received Dr reported before it was earned. Attach a description of the income and the
legal basis for the proposed method (See page :3 of the instructions.
) . . . . . '' . .
r::Expensesaccruedbutnotpaid .
.....
dPrepaidexpensepreviouslydeducted .
.........
e Supplies on hand previously deducted
. . . . . . . . . . . .. . . . . . . .
f Inventory on hand previously deducted. Complete Schedule C, Part II
. . . . . . . . . . .
g Other amounts (specify)
h Net section 4S'(a) adjustment (Add lines 1a-
'g.
) (See page 3 of the instructions.
) . . . . .
Amount
..,
DYesIs the applicant also requesting the recurring item exception (section 46' (h))?
. . . . . . . .
Part II Change to the Cash Method (See page 4 of the instructions.N/A
Applicants requesting a change to the cash meUiod must attach the following information.
1 A description of the applicant's in capital items and leased equipment used in the trade or business, and the relationship
. between these items and the services performed by the business.
2 A description of inventory items (items that produce income when sold) and materials and supplies used in carrying out the business.
The number of employees, shareholders, partners, associates, etc., and a description of their duties in carrying out the
applicant's business.
A schedule showing the age of receivables for each of the 4 tax years preceding the year of change.
A schedule showing the applicant's taxable income (loss) for each of theA tax years preceding the year of change.
A profit and loss statement showing the taxable income (loss) based on the cash method for each of the 4 tax years preceding
the year of change.
. I
DNO
Form 3"5 (Rev. 5-99)
Schedule 8 - Changes Within the LIFO Inventory Method
Part I General LIFO Information N/A
Complete this section if the requested change involves changes within the LIFO inventory method. Also, attach a copy ,of all Forms 970
Application to Use LIFO Inventory Method , filed to adopt or expand the use of the LIFO method.
Attach a description of the applicant's present and proposed LIFO methods and submethods for each of the following items.
a Valuing inventory (i.e., unit method or dollar-value method).
b Pooling (e., by line or type or class of goods; natural business unit; multiple pools; raw material content; simplified
dollar-value method; pooling method authorized under inventory price index computation (I PIC) method, etc.
c Pricing dollar-value pools (e.g., double-extension, index, link.chain, link-chain index, IPIC method, etc.
d Figuring the cost of goods in the closing inventory over the cost of goods in'the opening inventory (e., most recent
purchases, earliest acquisitions during the year, average cost of purchases during the year, etc.
If any present method or submethod used by the applicant is not the same as indicated on Form(s) 970 filed to adopt or
expand the use of the method, attach an explanation.
If the proposed change is not requested for all the LIFO inventory, specify the inventory to which the change is and is not applicable.
If the proposed change is not requested for all the LIFO pools , specify the pool(s) to which the change is applicable.
Attach a statement addressing whether the applicant values any of its LIFO inventory on a method other than cost. For
example, if the applicant values some of its LIFO inventory at retail and the remainder at cost, the applicant should identify
which inventory items are valued under each method.
Part II Change in Pooling Inventories N/A
If the applicant is proposing to change its pooling method or the number of pools, attach a description of the contents and
state the base year for each dollar-value pool the applicant preseritly uses and proposes to use.
If the applicant is proposing to use natural business unit (NBU) pools or requesting to change the number of NBU pools, attach
the following information (to the extent not already provided) in sufficient detail to show that each proposed NBU was
determined under Regulations section 1.472-8(b)(') and (2):
a A description of the types of products produced by the applicant. If possible, attach a brochure.
b A description of the types of processes and raw materials used to produce the products in each proposed pool.
clf all of the products to be included in the proposed NBU pool(s) are not produced at one facility, the applicant should explain
the reasons for the separate facilities, indicate the location of each facility, and provide a description of the products each
facility produces.
d A description of the natural business divisions adopted by the taxpayer: State whether separate cost centers are maintained
and if separate profit and loss statements are prepared.
e A statement addressing whether the applic~nt has inventories of items purchased and held for resale that are not further
processed by the applicant, including whether such items, if any will be included in any proposed NBU pool.
f A statement addressing whether all items including raw materials, goods-in-process, and finished goods entering into the
entire inventory investment for each proposed NBU pool are presently valued under the LIFO method. Describe any items
that are not presently valued under the LIFO method that are to be included in each proposed pool.
g A statement addressing whether, within the proposed NBU pool(s), there are items sold to others and transferred to a different
unit of the applicant to be used as a component part of another product prior to final processing.
If the applicant is engaged in manufacturing and is proposing to use the multiple pooling method or raw material content pools
attach information to show that each proposed pool will consist of a group of items that are substantially similar. See
Regulations section '.472-8(b)(3).
If the applicant is engaged in the wholesaling Dr retailing of goods and is requesting to change the number of pools used , attach
information to show that each of the proposed pools is based on customary business classifications of the applicant's trade or
business. See Regulations section' .472-B(c).
Part III Change to Inventory Price Index Computation ('PIC) Method
If changing to the IPIC method, attach the following items.
1 A completed Form 970.
:2 A statement indicating which indexes, tables, and categories the applicant proposes to use.
9' -0462470
(See page 3 of the instructions.N/A
Page 5
(See page 4 of the instructions.N/A
Form 3"5 (Rev. 5-99) 9'-0462470 Page 6
Schedule C - Change in the Treatment of Lono-Term Contracts , Inventories, or Other Section 263A Assets N/A
Part I Change in Reportino Income From Long-Term Contracts N/A (Campl.loF.nl.n~PlnllibelDw. S.opap.'alinltru.tIDn,j
1 To the extent not already provided , attach a description of the applicant's present and proposed methods for reponing income
from long-term contracts. If the applicant is a construction contractor, include a description of its construction activities.
2a Are the applicant's contracts long-term contracts as defined in section 460(1)(1)7 .
. . . . . . . . .. ,
. DYes
b If "Yes." do all the contracts qualify for the exception under section 460(e)7
. . . . . . . , . .
. DYes
If line 2b is "No." attach an explanation.
3a Does the applicant have long-term manufacturing contracts as defined in section 460(1)(2)7 .
. . . . . . . . ,
. DYes
b If '"'r'es" expiain the applicant's present and proposed methodes) of accounting for long-term manufacturing contracts.
c If any of the manufacturing goods are sold or distributed without installation, attach an explanation.
If the applicant is requesting to use the percentage of completion method under section 460(b) for reporting its long-term
contract income, indicate whether the applicant is electing to determine the completion factor for each long-term contract
under the simplified cost-te-cost method. (See page 4 of the instructions.
Does the applicant want to change the accounting method for all long-term contracts that were outstanding at
thebeginningoftheyearofchange7
. .. .. .. .
DYes
If "No: attach an explanation.
Attach a statement indicating whether any of the applicant's contracts are either cost-plus long-term contracts or Federal long-term contracts.
P art II Change in Valuing Inventories (Complete Part III if applicable. See page 4 of the instructions.) N/A
Attach a description of the inventory goods being changed.
Attach a description of the inventory goods (if any) NOT being changed.
Is the applicant's present inventory valuation method in compliance with section 26:3A7 (Seepage 4 of the
instructions.
4a Check the appropriate box-es below that identify the present and proposed
inventory identification methods and valuation methods being
changed and the present inventory identification methods and
valuation methods not being changed.
Identification methods:
Specific identification
. .
FIFO. . . . .
LIFO
. . . . . .
. DYes
Inventory Being Changed
Present method Proposed method
. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . .
Valuation methods:
Cost
. . . . . . . . . . . . . . . .' . . . . . .
Cost or market, whichever is lower
. . . . . . . .
Retailcost
. ,
Retail lowerofcostormarket. . .
. . . . . . . . . . . .
Other (attach explanation) .
. . . . . . . . . . . . . .
b Enter the value at the end of the tax year preceding the year of change
Attach the computation used to determine the section 48' (a) adjustment. If the section 481 (a) adjustment is based on more than
one component, show the computation for each component.
If the applicant is changing from the LIFO inventory method to a non-LIFO method, attach the following information. (See page
4 of the instructions.
a Copies of Form(s) 970 fiIed to adopt or expand the use of the method.
b A statement describing how the proposed method is consistent with the requirements of Regulations section'.4 72-
Pari III Method of Cost Allocation (See page 4 of the instructions.N/A
Complete this part if the requested change involves either property subject to section 26:3A or long-term contracts subject to section 460.
Check the appropriate boxes in Sections Band C showing which costs, under both the present and proposed methods, are fully
included, to the e:dent required, in the cost of property produced or acquired for resale under section 26:3A or allocated to long-term
contracts under section 460. If a box is no! checked, It is assumed that those costs are not fully included to the extent required. If a
cost is not fully included , attach an explanation. MarX "N/A" in a box if those costs are not incurred by the applicant with respect to its
production, resale , or long.term contract activities.
DNO
DNO
DNO
DNO
DNO
Inventory Not
Being Changed
Present method
Form 3"5 (Rev. 5-88) 9,-046247D
Section A - Allocation and Capitalization Methods (Schedule C , Pari III continued.)(See page 4 or the instructions.
Attach a description (including sample computations) of the present and proposed methodes) the applicant uses to capitalize direct
and indirect costs properly allocable to property produced or acquired for resale. Include a description of the methodes) used for
allocating indirect costs to intermediate cost objectives such as departments or activities prior to the allocation of such costs to
property produced or acquired for resale. The description must include the following information.
The method of allocating direct and indirect costs (specific identification method; burden rate method; standard cost method;
or other reasonable allocation method).
Page 7
The method of allocating mixed service costs (direct reallocation 'method; step-allocation method; simplified service cost
method using the labor-based allocation ratio; or the simplified service cost method using the production cost allocation ratio).
The method of capitalizing additionai sectio~ 26:3A costs (I.e., simplified production method with or without the historic absorption
ratio election, simplified resale method with Dr without the historic absorption ratio election including permissible variations, or
the U.S. ratio method).
Section 8 - Direct an Irect osts eQulred to be Allocated (See Regulations under sections 263A and 45'.
Present method Proposed method
Direct material
Direct labor
indirect labor
Officers' compensation (not including selling activities)
Pension and other related costs
Employee benefits
Indirect materials and supplies
Purchasing costs
Handling, processing, assembly, and repackaging costs
Offsite storage and warehousing costs
Depreciation, amortization, and cost recovery allowance for equipment and
facilities placed in service and not temporarily idle
Depletion N/A N/A
Rent
Taxes other than state, local, and foreign Income taxes'
Insurance
Utilities
...
Maintenance and repairs that relate to a production, resale, or long-term contract activity
Engineering and design costs (not including section 174 research and experimental expenses)
Rework labor, scrap, and spoilage N/A N/A
Tools and equipment
Quality control and inspection
.'
Bidding expenses incurred in the solicitation of contracts awarded to the applicant
Licensing and franchise costs
Capitalizable service costs (including mixed service costs)
Administrative costs (not including any costs of selling or any return on capital)
Research and experimental expenses attributable to long-term contracts
Interest
Other costs (Attach a list of these costs.
Section C - Other Costs eQUIre 0 Be Allocated
Marketing, selling, advertising, and distribution expenses
Research and experimental expenses not includ~d on line 26 above.
Bidding expenses not included on line 22 above
General and administrative costs not included in Section B above
Income taxes
Cost of strikes
Warranty and product liability costs
Section 179 costs
On-site storage
1 D Depreciation, amor1iZation, and cost recovery allowance not included on line" above
Other costs (Attach a list of these costS.
did'
d T
Form 3"5 (Rev. 5-99) 9'-0462470
Schedule D - Change in Reporting Advance Payments and Deprec:iation/Amortization
Part I Change in Reporting Advance Payments (See page 4 of the instructions.N/A
If the applicant is requesting to defer advance payment for services under Rev. Proc. 7'-197'-2 C.B. 549, attach the
following information.
a Sample copies of all service agreements used by the applicant that are subject to the requested change in accounting method.
Indicate the particular parts of the service agreement that require the taxpayer to perform services.
b If any parts or materials are provided , explain how the parts or materials relate to the services provided and provide the cost of
such parts or materials as an absolute number and a percentage of the contract price.
c If the change relates to contingent service contracts, explain how the contracts relate to merchandise that is sold, leased
installed, or constructed by the applicant and whether the applicant offers te sell, lease , install, or construct without the
service agreement.
d A description of the method the applicant will use to determine the amount of income earned each year on contingent contracts
and why t~at method clearly reflects income earned and related expenses in each year.
If the applicant is requesting a deferral of advance payments for goods under Regulations section 1,451-, attach the following
information.
a Sample copies of all agreements for goods or Items requiring advance payments used by the applicant that are subject to the
requested change in accounting method. Indicate the particular parts of the agreement that require the applicant to providegoods or items.
b A statement providing that the entire advance payment is for goods -or items. If not entirely for goods or items , a statement
that an amount equal to 95." of the total contract price is properly allocable to the obligation to provide activities described in
Regulations section' .45' -S(aH')(i) or (ii) (including services as an integral part of.those activities).
Part II Change in Depreciation or Amortization (See page 4 of the instructions.) N/A
Applicants requesting approval to change their method of accounting for depreciation or amortization complete this section. Applicants
must provide this information for each item or class of property for which a change is requested.
Note: If the property has been disposed of before the beginning of the year of change, a method change is notpermitted for that property.
See Automatic Change Procedures on page' of the instructions for information regarding automatic changes under sections
'67 168, and 197. Also see When Not To File Form 3"5 on page 4 of the instructions for information concerning retroactive elections
and election revocations.
. . . .
. DYesIs depreciation rofthe property figured under Regulations section '.'67(a)-11 (CLADR)?
If "Yes," the only changes permitted are under Re9ulations section'. '67(a)-1' (c)(1 )(Hi).
Is any,of the depreciation or amortization required to be capitali.zed under any Code section (e.
g.,
section263A)?
If "Yes," enter the applicable section
Has a depreciation or amortization election been made for the property (e., the election under
section'68(f)(1))?
...
DYes
If '"Yes," state the election made
4a To the extent not already provided, describe the property being changed. Include in the description the type of property, the
year the property was placed in servic , and the property s use in the applicant's trade Dr business or income-producing
activity. SEE ATIACHMENT.
b If the property is residential rental property. did the applicant live in the property beforerentirig it?
. . . .' . . .
cis the property public utility property?
. .
S To the extent not already provided in the applicant's description of its present method, explain how the property is treated.
under the applicant's present method (e., depreciable property, inventory property, supplies under Regulations section
, 62-, nondepreciable section 263(a) property, property deductible as a current expenses , etc.
If the property is not currently treated as depreciable or amortizable property. provide the facts supporting the proposed
change to depreciate or amortize the property.
If the property is currently treated and/or will be treated as depreciable or amortizable .property, provide the following
information under both the present (if applicable) and proposed methods.
a The Code section under which the property is depreciated or amortized (e., section' 68(g)).
b If the property is depreciated under section '68 , identify the applicable asset class in Rev. Proc. 87-, '987.2 C.B. 674. (If
none, state so and'explain why.) Also provide the facts supporting the asset class under the proposed method.
c The depreciation or amortization method or the property, including the applicable Code section (e.g., 200% declining balance
method under section '68(b)(')).
d The useful life, recovery period, Dr amortization period of the property.
e The applicable convention of the property.
. . . . .
DYes
DYes
DYes
, I
Page B
DNo
DNo'
DNo
DNo
DNO
ATTACHMENT TO FORM 3115
AVISTA CORl'ORATION AND SUBSIDIARY COMPANIES
EIN # 91-0462470
Name of Applicant
Avista Corporation and Subsidiary Companies, ("applicant ) is the parent corporation of a
consolidated group, and is filing tills Form 3115 on behalf of the parent corporation only:
1) A vista Corporation
2) EIN': 91-0462470
3) East 1411 Mission Av.enue
O. Box 3727
Spokane, W A 99202 .
Part I, Line 6b
Is the applicant a member of an affiliated group filing a consolidated return for the year of
change? If "yes attach the parent Company (1) name (2) identifying number (3)
address, and (4) lax year.
The applicant is the parent corporation.
1) A vista Corporation
2) EIN: 91-0462'470
3) East 1411 Mission Avenue
O. Box 3727
Spokane, W A 99202 .
4) Tax Year End: December 31
Part II, Line 9
If the applicant is not changing its overall method of accounting, attach a description of each
of the following:
(a) the item being changed.
The taxpayer is changing its method of detennining and allocating the capitalizable portion
of its mixed service costs. The taxpayer is changing its method of allocating costs to items of
inventory.
(b) the applicant s present method for the item being changed.
1. The taxpayer has not elected the 90/1 0 de minimis rule
2. The taxpayer currently includes certain deductible service costs as mixed service
costs
3. The taxpayer presently uses a facts and circumstances method of detennining the
capitalizable portion of mixed service costs and
ATTACHMENT TO FORM 3115
A VISTA CORPORATION AND SUBSIDIARY COMPANIES
EIN # 91-0462470
4. The taxpayer does not cun-ently capitalize all of the costs that the regulations require
to be capitalized under section 263A that directly benefit or are incun-ed by reason of
the production of inventory.
(c) the applicant s proposed methodJor the item being changed.
1. The taxpayer proposes to elect the 90110 de minimis rule set forth in section 1.263A-
(g)(4)(ii).
2. The taxpayer proposes to exclude costs described in Section 1.263A-1(e)(4)(iv) from
capitalization.
3. The taxpayer proposes to elect the simplified service cost method described in Section
1.263A-1(h) with the production based allocation ratio described in Section 1.263A-
(h)(5). This method will be u$ed to detennine capitalizable mixed service costs
incurred during the year with respect to inventory property and self-constructed assets
produced on a routine or repetitive basis in the ordinary course of the taxpayer
business. Mixed service costs include: labor costs (including all elements of
compensation, benefits, and pension and other related costs) of full-time and part-time
employees as well as contract employees and independent contractors, cost recovery .
(including depreciatiC?TI or amortization), rent, insurance, utilities, repairs and
maintenance, and tools and equipment, that can be identified specifically with a
service department or function or that directly benefit or are incurred by reason of a
service department or function, including, security services, legal services, payroll
services , data processing services, engineering and design' services , safety engineering
services , and general and administrative services.
4. The taxpayer proposes to continue to use a facts and circumstances method to allocate
additional section 263A costs (including capitalizable mixed service costs) to self-
constructed assets. With respect to the inventory property, the taxpayer proposes to
allocate additional section 263A costs to items of inventory using a burden rate
method authorized by section 1.263A-1(f)(3).
(d) the applicant s overall method oj accounting.
The applicant's overall method of accounting is an accrual method of accounting.
Part II, Line
Attach an explanation of the legal basis supporting the proposed method Jor the item being
changed. Include all authority (statutes, regulations. published rulings. court cases, etc.)
supporting the proposed method. The applicant is encouraged to include a discussion of any
authon'ties that may be contrary to the proposed method.
ATTACHMENT TO FORM 3115
AVISTA CORPORATION AND SUBSIDIARY COMPANIES
EIN # 91-0462470
Section 263A requires the capitalization of all direct costs and those indirect costs that
directly benefit or are incUITed by reason of the production of property. In its business , the
taxpayer produces self-constructed assets and electricity for sale to its customers. In TAM
9527003 (Feb. 15, 1995) the Service ruled that electricity is inventory property under section
471. Therefore, such property is subject to section 263A. Accordingiy, the taxpayer is
engaged in the production of.two types of property subject to section 263A:self-constructed
assets and inventory. The proposed change in method of accounting relates to the self-
constructed assets produced on a routine or repetitive basis . and the inventory property
produced by the taxpayer. This proposed change in method of accounting relates to the items
enumerated below.
1. Section 1.263A-l(e)(4)(iv) excludes certain departments from capitalization. .
..J
2. Section 1.263A-l (h) provides a simplified service cost method that may be used to
detennine the amount of capitalizable service costs: Section 1.263A-l (h)(2)(i) provides
that if the simplified service cost method is elected, unless the taxpayer makes an election
under section (h)(2)(ii), the simplified service cost method must be used for all
production and resale activities, including inventory property and self-constructed assets
produced on a repetitive basis. The taxpayer will apply the simplified service cost
method to all production or resale activities including the production of inventory
property and self-constructed assets produced on a repetitive basis.
3. Section 1.263A-l (g)( 4 )(ii) provides a de n1inimis rule under which if 90% or more of a
mixed service department's costs are deductible service costs, all of the costs of the
department are excluded from capitalization; and if 90% or more of a mixed service
department s costs are capitalizable service costs , all of the costs of the department are
capitalized.
4. Section 1.263A-l (f)(3) authorizes the use of a burden. rate method.
Part II, Line 11
Attach a statement description of the Qpplicant s trQde or business, including the goods and
services it provides and any other types of activities it engages in that generQte gross income.
The applicant is an electric & natural gas utility engaged in the production, transmission
distribution, and sale of electric energy and natural gas.
Part II, Line 13
Attach a stQtement of the QPplicQnt 's reQsons for the proposed change.
The applicant proposes these changes in order to ensure that those costs which are properly
capitalizable under 9263A are capitalized, and that those costs which are not properly
capitalizable under 9263A are not capitalized.
' '
ATTACHMENT TO FORM 3115
AVISTA CORPORATION AND SUBSIDIARY COMPANIES
Ern # 91-0462470
ATTACHMENT TO FORM 3115
VISTA CORPORATION AND SUBSIDIARY COMPANIES
EIN # 91-0462470
Part II, Line 14a and b
Attach an explanation oj whether the proposed method of accounting will be used for
the taxpayer s books and records and financial statements.
. .
Attach an explanation of whether the proposed method of accounting conforms to
generally accepted accounting principles (GAAP) and to the best accounting practice
in the applicant s trade or business.
The proposed accounting method changes for capitalization do not confonn to generally
accepted accounting principles (GAAP) and will not be used for the applicant s financial
statement purposes.
Part II, Line 16
If the applicant is a member oj an affiliated group filing a consolidated return for the year
change. do all other members oj the con.solidated group use the proposed method
accountingfor the item being changed?
If "No attach an explanation.
Avista Corporation is the only member of the affiliated group for which the request for a
change in accounting is being made. The other members of the affiliated group are not
involved in the, transmission or distribution of electricity and natural gas. Therefore, this
request for a change in accounting does not pertain to those members.
Part II, Line 18
Attach a statement addressing whether the applicant has entered (o~ is considen ng e~tering)
into a transaction to which section 381 (c)(4) or (c)(5) applies (e.
g.
reorganization or
merger) during the tax year oj change determined without regard to any (potentia.!) closing
oJthe year under section 381 (b)(1). Also include in the statement an explanation of any
changes in method of accounting that resulted (or will result) from the transaction(s).
The applicant has not entered (nor is considering entering) into a transaction to which IRC
9381(c)(4) applies during.the tax year of change.
Schedule C, Part III, Section A
Attach description (including sample computations) of the present and proposed melhod(s)
the applicant uses to capitalize indirect costs properly allocable to property produced or
acquiredjor resale. Include a description oJthe method(s) usedJor allocating indirect costs
ATTACHMENT TO FORM 3115
AVISTA CORPORATION AND SUBSIDL.6iliY COMPANIES
EIN # 91-0462470
to intermediate cost objectives such as departments or activities prior to the allocation of
such costs to property produced or acquiredfor resale.
Avista Corporation cuITently utilizes the following methodologies.
1. Under both the present and proposed methods the applicant uses a specific identification
methodology to allocate its direct costs to both capital and non-capital projects. The
applicant uses a facts and ' circumstances methodology to alJocate its indirect costs, at
times following direct labor, and at times following direct materials. Under the present
and proposed methods, the applicant allocates direct costs to inventory using a specific
identification methodology. The applicant allocates some indirect costs to inventory
using a facts and circumstances method, generally following direct materials. The
applicant does not allocate all indirect costs to inventory that are required to be allocated
to inventory. Under the proposed method, the applicant will allocate these indirect costs
to inventory using a burden rate method
2. The applicant uses a facts and circumstances methodology to allocate its mixed services
costs, at times following direct labor, and at times following direct materials.
The applicant proposes to capitalize its mixed service costs using the simplified service
cost method using the production~based allocation ratio as set forth by Treasury
Regulation 1.263A-l (h). . The taxpayer proposes to allocate its indirect costs between
specific projects based on the relative amount of263A production costs that is charged to
those projects. For example, if the taxpayer s total mixed service costs for the year are
000, the taxpayer s total 263A production costs are $6 000 (of which $4 000 relate to
the production of electricity and $2 000 relate to the production of self-constructed
assets), and the taxpayer s total production costs are $10,000, then the taxpayer
capitalizable mixed service costs would be $600 determined as follows:
000 X ($6 000/ $10 000) = $600
Of this $600, $400 would be capitalized to inventory, and $200 would be capitalized
self-constructed assets. This allocation would be determined by multiplying the
capitalizable mixed service costs by the 263A production costs related to the production
of inventory over the total production costs to determine the amount capitalizable to
inventory. This same formula will be used to allocate capitalizable mixed service costs to
self-constructed assets as follows:
Inventory: $600 X ($4 000 / $6,000) = $400
Self-Constructed Assets: $600 X ($2 000/$6 000) = $200
3. Under the present and proposed methods, the applicant allocates additional section 263A
costs to self-constructed assets using a facts and circumstances method. Under the present
method, the applicant allocates some indirect costs to inventory using a facts and
ATTACHMENT TO FORM 3115
AVISTA CORPORATION AND SUBSIDIARY COMPANIES
EIN # 91-0462470
circumstances method. Under the proposed method, the applicant will allocate indirect
costs to items of inventory using a burden rate method.
ATTACHMENT TO FORM 3115
AVISTA CORPORATION AND SU13SIDIARY COMPANIES
EIN # 91-0462470
REQUEST FOR FAXED COPIES
Please.fax copies of all corresp'ondence regarding this Form 3115 to Jan Skelton at 202-661-
1060.
Form 2848 Power of Attorney OM!! No. 1s,.$-(I1SC
and Declaration of Representative For IRS Us. 0r11y
IRBY. o.c.lnb.r 1997)RBCelveO DY:
Oe""nmon! ollhe jreuury N3I'IICI
InlomBI RoyonlHl SIINICII See the separate Instructions.Tolop/lOnC
Part I Power of Attorney (Please type or print)Funcuon
Taxpayer Information (Taxpayer(s) must siqn and date this form on pace 2, line 9.OBII
Taxpayer name(s) and address Social security number(s)Employer identification
Avista Corporation number
E 1411 Mission Avenue 91-0462470
Spokane, WA 99202 Plan number Of appDcabie) .
Daytime telephone number
hereby appoint(s) the following representative(s) as attorney(s)-in-fact
Representative(s) (Representative(s) must slQn and date this form on paQe 2, Part II.Name and address CAF No.
..................................
Jan Skelton Telephone No. J?P.~J.~9:?~~L...............555 12th Street NWSuite 500 Fax No. . !?P.~lp.q1:)~~9............u
Washington D.C. 20004-1207 Check if new: Address . Telephone NO.Name and address CAF No.
Telephone No.
Fax No.
Check If new: Address D"""""""T~i~Ph~~'~N~'
... ........... ............ ...... -.... ................ ....,..........
CAF No.
Telephone No.
:)
Fax No.
Check if new: Address
to represent the taxpayer(s) before the Internal Revenue Service for the following tax matters:
Name and address
"""""."" .... ...,... .... ..,-..--...-"....
.n........"""""
D"".....""" "T~i~ph;~'~N~I::
en~ Excise, etc.Tax Fonn Number '040 94'720, etc.
Income Form 3115 2002
Nota:
Specific Use Not ReCDTded on Centralized Authorization Ale (CAF). If the power of attomey is for a specific use not rec.orded
on CAF, check this box. (See Une 4 - Specific Uses Not Recorded on CAF.
) . . . . . . . . . . . . . . . . . . . .
Acts Authorized. - The representatives are authorized to receive and inspect confidential tax information and to perform any
. and all acts that I (we) can periorm with respect to the tax matters described in line 3 , for example, the authority to sign any
agreements, consents, or other documents. The authority does not include the power to receive refund checks (see line 6
below) the power to substitute another representative unless specifically added below, or the power to sign certain retums
(see Instruction for Line 5 . Acts authorized).
Ust any specific additions or deletions to the acts otherv.,ise authorized in this power of attorney: .T~j~.c::":,,.p.t.
. ?~9fl)~Y.l~ .1!,:!1!~9.!9 .~~i~S1. ~.f.9f~ .~1 ~ ~!~1~~~?!9.
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t0_~0.ty:....... - -0""""'--"'" eo
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Nota:In general, an unenrclled pre parer of tax returns cannot sign any document for 2 taxpayer. See Revenue Procedure
81.38, printed as Pub. 470, for more information.
The tax matters partner of a part.rlershlp Is not pennitted to authorize representatives to performcertain acts. See the instructions for more information.
Receipt of Refund Checks. . If you want 10 authorize a re resentative named in line 2 10 receive BUT NOT TO ENDORSE OR
CASH, refund checl:~. InltJal here and list the name of that repre5enlatlve below.
Name of reoresentative to receive refund check(s)
For Paperwork Reduction and Privacy Act Notice, see the sepaTdle Instruc:!Jol\S.(IiiA)Form 2848 (Rev. '2-
IM I t;.I,,:, "-"-""""~~, ~~..,..~ ..n -' "'
Fo11T12B48 (Rev. ':1.97) 0 91-0462470
Notices and Communications. Original notices and other written communications will be sent to you and a copy to
the first representative list~d on line 2 unless you cheer. Dne or more of the boxes below.
a If you want the first representatIve listed on line 2 to receive the original, and yourself a copy, of such notices or
communlcatlons checkthlsbox .
. .
b If you also want the second representative listed to receive a copy of such notice5 and communications, check this box
, , , , , . . .
c If you do not want any notices or communications sent to your ,representative(s), check this box
. , . . , , . . . .
Retention/Revocation Df Prior Power(s) of Attorney. . The filing Df this power Df attorney automatically revokes all earlier
power(s) Df attorney on file with the Intemal Revenue Service for the same tax matters and years or periods covered by this
document. It you do not want to revoke a prior power of attorney, check here
. . , . , . , . , .
YOU MUST ATTACH A COpy OF ANY POWER OF ATTORNEY YOU WANT TO REMAIN IN EFFECT.
Signature of Taxpayer(s). If a tax matter concerns a joint return, both husband and wife must sign If joint representation Is
requested, otherwise, see the instructions. If signed by a corporate officer, partner, guart!ian, tax matters partner
, .
executor, receiver, administrator, or trustee on behalf of the taxpayer, I certify that I have the authority tD execute this form
, on behalf of the taxpayer.
IF NOT SIGNED AND DATED, THIS POWER OF ATTORNEY WILL BE RETURNED.
Pat
..
n.... USr1./I. aoJ:!:dJ..... ...n.......................
Signature
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Part II Declaration of Representative
Under penalties of pe~ury. I decJare that:
- I am not currently under suspension or disbarment from practice before the Intemal Revenue Service;
.. I am aware of regulations contained in Treasury Department Circular No. 230 (31 CFR, Part 10), as amended, concerning
the practice of attorneys, certified public accountants, enrolled agents, enrolled actuaries, and others;
.. I am authorized to represent the taxpayer(s) identified in Part I for the tax marter(s) specified there; and.. I am one of the following:
Attorney - a member in good standing of the bar of the highest court of the jurisdiction shown below.
Certified Public Accountant" duty qualified to practice as a certified public accountant In the jurisdiction shown below.
Enrolled Agent. enrolled as an agent under the ~quirements of Treasury Department Circular No. 230.
Officer. a bona fide officer of the taxpayer's organization.
e Full.TIme EmpJoyes . a full-time employee of the taxpayer.
Family Member - a member of the taxpayer's immediate family (Le., spouse, parent, child, brother, or sister).
1:1 Enrolled Actuary. enrolled as an actuary by the Joint Board for the Enrollment of Actuaries under 29 U.C. 1242 (the
authori1y to practice befors the Service is limited by section 1 0.3(d)(1) of Treasury Depanment Circular No. 230).
Un enrolled Return Preparer - an un enrolled return preparer under secUon 10. 7(c)(vlil) ofTreasury Department Circular No. 230.
IF THIS DECLARATION OF REPRESENTATIVE IS NOT SIGNED AND DATED, THE POWER OF ATTORNEYWILL BE RETURNED.
DeslgnaUon . Insert Jurisdiction (slate) or
above letter (a-Enrollment Card No.Sionature Oate
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DTTT
TC41021
10-09-02
If this is an amended return, check the box. 8
IDAHO CORPORATION INCOME TAX RETURN
nstructions, page 5 for the reasons
amending and enter the number.
2002
Mo Day Year
For calendar year 2002, or fiscal year beQinninq 0' 01 I 02 endinQ
Federal employer identification number
91-0462470
Do you need Idaho income tax forms
mailed to you next year?
Mo Year12 2003
Yes 8
Business name
AVISTA CORPORATION 4 ~ b'5".J l6.Y"WI.~6.~ I c.~
Businessmailingaddress E 1"11 MISSION AVENUE
P 0 80X 3727
City, State and Zip Code
SPOKANE 99202
1. Did the corporate name change? If yes, enter the previous name, ~ASHINGTON ~ATER PO~ER COMPANY
2, If a federal audit was finalized this year, enter the latest year audited. ......"
.,...,....
3, Is this an inactive corporation or nameholder corporation?
. . . . . . . . . . . . , . . . . , . . , . . , . , , . , . . . .
Yes
4. Quarterly estimated payments:
a, Were federal quarterly estimated payments required? ,....."
.......,.,...,.....,..,.,
Yes
b, Were quarterly estimated payments based on annualized amounts?
. . . . . . . . . , . . . . , , , . , , . . . .
Yes
5. Isthisafinalreturn?
...,....,...,...,............,......................
Yes
If yes, check the proper box below and enter the date the event occurred.
Withdrawn from Idaho Dissolved
Merged or reorganized. Enter new federal employer identification number.
Enter the extended federal due date if this is a short period return,
Isthisanelectricalortelephoneutility?
,..".,.....,..,...,.,....,.,.....".."
Did you use the combined reporting method?
......,.....,............,.,..,....,...
a. Does this corporation own more than 50% of another corporation? ..,.."
.....,........,....
b, Does another corporation own more than 50% of this corporation?
..............,........."
c, Are more than 50% of this corporation and another corporation owned by the same interest?
.,.,......,.,
d. Are two or more corporations included in this report operating in Idaho or authorized to do business
in Idaho? ..,.,...,.......,...,.,.....,..,........,.,......,....,~Yes
9. If you are a multinational taxpayer, answer questions a. and b. Complete Form 42.
a. Check the box for your filing method: 1, worldwide return
2. water's edge return
b, If a water s edge return is filed, do you elect to forego filing water's edge spreadsheets?
10, If a worldwide return is filed, is foreign income computed by making book to tax adjustments?
Yes
Yes 8 Yes 8 "I. Yes 8 Yes 8
Yes 8 y. No
.. .. .. .. : : : : : : ~::
ADDITIONS
11.
12.
13.
14.
15.
16,
Federal taxable income "
Interest and dividends not taxable under Internal Revenue Code
, . . . . . , , . , . . , . . . . , . , , . , . .
State, municipal and local taxes measured by net income
. . . . . . . . . . . , . . , . , . . . . . . . , . . . . .
Netoperatinglossdeductedonfederalreturn "
'.,...,..,.."..............'
Dividends received deduction on federal return
. . , . . , . . . . . . .
Other additions, including additions from Part II, Form 42
..,....., , , . . . , . . . . . . . , . , . , ., . . . . . . . . . . . . . . ,, . , , . , .
17,Add lines 11 throuoh '6.
SUBTRACTIONS
, 8. Foreign dividend gross-up (Sec. 78, Internal Revenue Code)
'..."
19. Interest from Idaho municipal securities
. , . , . . , . . . . . , . , , , .
20. Interest on U,S. Government obligations. Attach a schedule. . ,
. . , , . , ,
21. Interestandotherexpensesrelatedtolines19and20 ,..."
..."
22. Add lines 19 and 20, and subtract line 21, .."
...",.,."......,....
23. Technological equipment donation .
. . . . . , . . , . , . , . . . , , . , . , . ,
24. Allocated income. Attach a schedule, "
25, Interest and other expenses related to line 24, Attach a schedule. . ,
, . , , , . .
Subtractline25fromline24.
...".,...."..,...".,....."
Other subtractions, including subtractions from Part II, Form 42
.......,.,...,....,..,..,.
28, Total subtractions. Addlines18,22,26and27. "
.........."......,.",..
20 21
. , . , , , ,
29.ortionment. Subtract line 28 from line 17,
2002 Deloitte & Touche Tax Technologies LLC
246 488
468 869
209 445
924 802
8 1'8
r27
8 129 924 802
1D41PDD1
Form 41-2002 ...u,.. --... -..... ._nDTTT TC41021-2 10-09-02
30, Net business income subject to apportionment. Enter amount from line 29, ..,..."
..",..,...
31, Corporations with all activity in Idaho enter '00%, Multistate/multinational corporations complete and
attach Form 42. Enter the apportionment factor from line 21 , Part I, Form 42,
..., . , . , , .
32. Net business income apportioned to Idaho. Multiply line 30 by the percent on line 31,
..,..,..
3, Income allocated to Idaho. See instructions,
.....,...,.,..., . . . . , , , . .
34. Idaho net operating loss carryover 8 22 r 35 1 , carryback 8 Enter total,
35. Idaho taxable income, Add lines 32 and 33, and subtract line 34,
If the co oration has an NOL and is electin to fore 0 the ca back eriod check here, TAX COMPUTATION Minimum $20 for each corporation operating
36, Idaho income tax, Multi I line 35 b 7.6%. or authorized to do business in Idaho,
CREDITS
37. Credit for contributions to Idaho educational entities
. . . , , . . . , . . , . . ,
38. Investment tax credit. Attach Form 49. Earned 0 Allowed 8
39. Credit for contributions to Idaho youth and rehabilitation facilities
. , . . , . . ,
40. Credit for production equipment using post-consumer waste , . . . , . 8
41, Natural resources conservation credit
, . . , . . . . . . . . , . , . . .
42. Promoter-sponsored event credit
. . . . , . . , . . . . . . . . , . . . . . . ,
43. Credit for qualifying new employees. Earned 0 Allowed 8
44. Credit for Idaho research activities. Earned 0 Allowed 8
45, Broadband equipment investment credit. Earned 0 Allowed 8
46, Incentive investment tax credit carryover
, . . . , . . . . . . . . . . , ,
47. Total credits. Add lines 37 through 46. ...........,..."
..,...........
48, Subtract line 47 from line 36, If line 47 is reater than line 36 enter zero.
OTHER TAXES
49, Permanent building fund tax. Enter $10.
Combined reports include $10 for each corporation operating or authorized to do business in Idaho.
......
50. Fuels tax due. Attach Form 75. .....,...........,........,........"
..,..
51. Tax from recapture of investment tax credit, Attach Form49R. "
52, Tax from recapture of broadband equipment investment credit, Attach Form 68R.
. , . . . . . . , . , , . . , ,
53. Tax from recapture of incentive investment tax credit. Attach Form 69R.
,......,....,.,..,..,
i4. Tax on Idaho compensation of individual officers and directors not reported to Idaho.
. . , . , , , . . . , , . .
55. Total tax, Add lines 48 throu h 54,
56, Underpayment interest. Attach Form 41 ESR,
57. Add line 55 and line 56,
PAYMENTS and OTHER CREDITS
. . . . . . . . . . , . . , , . . . , . . . . . . . . . . . , , . .7 I U.....,..
Pa e 2
924 802
14.6042
818 420
351 777
-10 533 357
260
260
. 53
. 54
. 56
130
390
390
58. Estimated tax payments, .............."
......",...,.......,...
59, Special fuels tax refund Gasoline tax refund Attach Form 75,
60, Total ayments and other credits. Add line 58 and line 59.
REFUND or PAYMENT DUE61. Tax Due. Subtract line 60 from line 57,
, , , . . , , . . . . . . , , . , . , . , . , . . , . . . , , . .
62. Penalty 8 Interest from due date. Enter total,
63. TOTAL DUE. Add lines 61 and 62,
....,'..,... ,."..,.,
64, Overpayment. Subtract line 57 from line 60, ."
....",...
64 593 571
65. REFUND. Amount of line 64 you want refunded to you. ."
.,.,.
65 593 571
66, ESTIMATED TAX. Amount ou want credited to our 2003 estimated tax. Subtract line 65 from line 64.
AMENDED RETURN ONLY. Complete this section to determine your tax due or refund.
67, Total tax due (line 63) or overpayment (line 64) on this return
. . . . , . , . , , . . . .
68, Refund from original return plus additional refunds
, . , . . . , . , , . . . , . , . . , , , . . , . . . , . . ,
69. Tax paid with original return plus additional tax paid
, . . . , . . , , , , . . , , , . , , , , . , . . ,
70, Amended tax due or refund. Add lines 67 and 68 and subtract line 69.
Within 180 days of receiving this return, the Idaho State Tax Commission may contact the paid preparer to discuss it,
Under penalties of perjury, I declare that to the best of my knowledge and belief this return is true, correct and complete.
Signature of officer R08ER HANSON Date Paid preparer s signature Pre parers EIN, SSN, or PTiN8 I
" ~'\
Title
If line 57 Is more than line 60, GO TO LINE 61. If line 57 Is less than line 60, GO TO LINE 64.
11GN
IERE
Iv -/'1-,/3
Address and phone numberPhone number
593 961
593,961
::,::::::::):'
1::'1::11::'::::::11/::::1:1::
:::::::::,
::1"1:1::1..:::::'
::::::::
ASST CONTROLL 509-489-0500
MAIL TO: Idaho State Tax Commission, PO Box 56, Boise, ID 83756-0056
ATTACH A COMPLETE COpy OF YOUR FEDERAL FORM 1120 OR 1120A
2002 Deloitte & Touche Tax Technologies LLC ID41POO2
DTTT
~42
TC4202-1
9-24-02
IDAHO SUPPLEMENTAL SCHEDULE FOR
MULTISTATE / MULTINATIONAL BUSINESSES
Attach to the Idaho Income Tax Retum as Paqe 3Month Day Year01 01 Month
For calendar ear 2002 or fiscal
ne as shown on retum
AVISTA CORPORATIONPART L
PROPERTY (OWNED PROPERTY AT ORIGINAL COST)
BEGINNING OF YEAR
Inventories
2. Real and tancible personal propertY
END OF YEAR
3, Inventories
4, Real and tancible personal orooertv
5, Total of lines 1 throuch 4
6, Averace. Une 5 divided by 2
7, Rented crocertv (capitalized at S times rents paid)
S, Total propertY. Add lines 6 and 7.
9, Idaho orocertv cercentace
SALES (GROSS RECEIPTS)
'0, Gross sales less returns and allowances
11 Sales delivered or shipped to Idaho purchasers
12, Idaho "hrowback" sales
13. Sales of services
14, Other business cross receiPts
15. Total cross receipts, Add lines '0 throuch 14,
16, Idaho sales cercentace
17, Idaho sales oercentaces doubled, Multiclv line 16 by 2.
o-vROLL
Total waces and salaries
19. Idaho cavroll cercentace
20, TOTAL PERCENTAGE Add lines 9 17 and 19,
TOTAL IDAHO
015 274
343 449 793
800 459
615,096 705
11,954 263 8 1 265 866
435 r456, 746 8 631 375 312
799 876 076 1 248 538 342
399 938 039 624 269 1718 102 208 352 8 21 967 2328 2,502,146 391 8 646 236 403
Compute percentage to four decimal places.
Compute percentage to four decimal places.
Utility companies see instructions.
8 110 628 231 8 11 328 026
Compute percentage to four decimal places.
Utility companies add lines 9, 16 and 19,
See instructions.
Required for all multinational corporations
21 IDAHO APPORTIONMENT FACTOR
PART II. MULTINATIONAL ADJUSTMENTS.
ADDITIONS
Income of unitary foreign subsidiaries, See instructions,2. Federal taxable income of unitary subsidiaries not included on the federal return
3. Foreign Sales Corporation (FSC). See instructions.
4. Income of foreign corporations subject to federal taxation
5. IRC Section 936 possession corporations. See instructions.
6, Intercompany transactions eliminated on the federal return
7. Other additions, Attach explanation.
WATER'S EDGE
2002
Year
PERCENTAGE
'..........,..,...,.......,..............."""""""""""""""""""'.,,:,:.:.:.:.:,:,:,:.:,:,:,;.:,:,:.:,:,:,;,:.:.:.;,:,:,:,:':':';':.:.:.:.:.:':.:.:.:':.::::;::::::::::::::::::~:;:;::::::::::::::::,:::::::::::::,:,::;::::::::::,;:::::::...,.,.....".........,...,...."............,....."....."........",.,...,.,....,...",...."....,..,.....,..,.."..,.,...,....,...,...",.,.......",."",...,...,.......,.....,.....,.......,....",........"",,',,',',,'....."",..,..,..,..""......,.",....,.,.."",."",....."..."...,.,..,.,.,......,.""......,......".,.....,..,.,..........",...."..,...,..............,.....,...,.",..,.,....""..,.,..,.,.".."..",....,......,..............,.....,...,.."."""""""""""""""""","'.,...."...,..,..""...".,.....",.,....,......,..,........,..".....,..,..........,...,.,....,..,.....,.............,.....,............,.........,..........."."...,.""".....,.......,......,.,....".""",'.,',,','.,',',',""""'""",""",""","'."""";.:.:.;.:,:.:,:,:,:,;,:,,;.;,:,:.:,:,:.:,:.:.:,:,:,;,:.:.:':':.:':.:.:.:';,;,;':':',','.,',',,','.,'.,'.,',,','.,'.,',',,',,'.,',,'.,'.,',,',,'.,',,'.,',........",..........."......,..",...,.,
::::::::!:I::::::::::::::::::::::::::I:::::::::::::::::::~::::::::~:::::::::::
.....,......,........."...."..........,.
t:::r:~:::::~f:'::f:~::f:::::~~~rff:~r:::~f:::::I':
:.:.:':.:.:.:.:':.:':.:':.:.:.:.:.:.:':':.:':':':.:.:.:,:,:.:.:.:.:.:.:.:.:,:.;.:.:,......,.............."..,...,.........,.,:.:.:,:.:,:.:,:.:.:.:.:,:,:,:,:,:,:.:.:.;.:,:,:,:,:,:,:.:,:,:,:.:.:.:.:.:.:.;.:,:.:,,'.,'.,','.,',,'............."".............,....,.,.....,'.,'.,'."""""""""""..."""""""'"....,........"...,.,.,.....,."..,.....,.......,....,.".......".,."".",."....""""""'...."""""""""""'",'.,',,',','.,','.,',,',,','.,',',"""..,."""",.,.""'..."""""".....,........,.."......,..,.."...,....,...............,..............,...".....,""""'.................'.......,""'""""""""""""""",,""""'.,',,'.,'.,',""......."....,.........'.,.,..,.."'"...............,...,....."..,...".........,..,.........,.......................,.".........,.,...................".....,..".".....,..................,....,."....,.,.....................,...............,..""........................",.,.".,.."...,.........................,.......,..'.".............................""",.,..,.......................................:::::::,:::,:::::::::,:,:::,:,;::::::,:::::::,:,:,:::,::::::::::::;:;::::,:::,::::::;,:.:.:.:.:.:.:,:.:,:,:,;.:,:,;,:,:,:.:,:,:,:.:,:,:,:.:,:,:.:,:,:.;,;.:.:.;.:.;.:.:."'.,',',............."..,.......".,....,........,'.,',',,',,'.,"'.,'.,',,',,',,'.,',,'...........,..."...,....""..,............,..............."......,.,......,.................,."....,...,..,......."......,...."......,.....,..,..,.,......,......,...,........,...."",.,........,.".,....,"",.,...."...,.....,.........".""'. ..
25 8273 %
7457 %
0 0000 %
..................................,..,....,................................,.......,..",......................,.........,..............................................:.:.:.:,:.:.:.:.:.:.:.:.:.:,:,:,;.:.:.:,:.;.:.;,:.:.:.;.:.:,:,;.;.:.:.:.;.:.:.:.:.:.........,.....................,.............,......,.............,..,....,..,..,..........,...",..........,.,..,.,...,......,.."...."..,..",.,.,...."..",."".......,........,.....,..,.............,.....,"""","'.,...........,...'...,""""............,."....,.............,......,..",..,....,...,.""..."......".",.,..,..,.........................,.."..,.."""""""""""""""",,""""..,',
w,'.
,'.,',,',,',,.,........,.....................".,...",','."'.,'....,'.,',',',.. .... ....... ... ... .... .
10 2397 %
43.8127 %
14 6042 %
WORLDWIDE
............................................:,::::::::;::::,:::::::::::::,:,::::;,;,:,:::::::::,:::::::::::::::::,:::::::::,:,;::,::,'.,'.,'.,'.
1 :::~:~::::::I::~:::tI:::::::'::::I::::I:~:f:::t::::::::~::~I~~:: 0
~ ::~:::~'
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0 ::::
':;'
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gOODO' :%
8, Total additions, Add lines 1 throuch 7, Enter on line 16 Form 41
SUBTRACTIONS
9, Federal taxable income of nonunitary subsidiaries included on the federal return
10, Exclusion for foreign dividends and deemed dividends from possession corporations
a, Foreign dividends
b. Deemed dividends from possession corporations
c, Total dividends subject to exclusion. Add lines 10a and 10b,
d. Exclusion percentage, Enter 85% if spreadsheets filed or SO% if no spreadsheets filed,e. Dividend exclusion. Multiply line 10c by line 10d.11 Intercompany dividends included on the combined return
Intercompany transactions included on the federal return
Other subtractions, Attach explanation.
S 8
10a 8
10b 8
10c
10d
10e 8
14, Total subtractions, Add lines 9 10e 11 12 and 13, Enter on line 27 Form '4 8
2002 Deloitte & Touche Tax Technologies LLC
ID42PO01
OTTT
~49
TC49021
7-12-02
IDAHO INVESTMENT TAX CREDIT 2002
or calendar ear 2002 or fiscal
Name(s) as shown on return
AVISTA CORPORATION
Month Year Month Day Year
endin
Social Security Number or EIN
91 -0462470
PART I CREDIT AVAILABLE SUBJECT TO LIMITATION
Amount of qualified investments acquired during the tax year, Attach a complete list.936 813
Credit earned. Multiply line 1 by 3%.538,104
Pass-through share of credit from a partnership, S corporation, estate or trust
Credit received through unitary sharing. Attach a schedule.
Carryover from prior years' investment credit. Attach Form 49C or other schedule.982 926
Credit distributed to partners, shareholders or beneficiaries
Credit shared with unitary affiliates
Total credit available subject to limitation.Add lines 2 throuah 5 and subtract lines 6 and 7,521 030
PART II LIMITATION If you are claiming the credit for qualifying new employees, compute the limitation on Form 55,
If you are NOT claiming the credit for qualifying new employees, complete lines 1 through 10,
Idaho income tax.Enter the amount from the appropriate income tax return.260
Credit for tax paid other states
Subtract line from line 260
Investment tax credit from line Part 521 030
Multiply line 50%.130
Enter the smaller line line
Credit for contributions educational entities
Total nonrefundable credits available.Add lines and
line greater than line
Subtract line from line
Credit allowed.Subtract line from line negative enter zero.
10.line eaual less than line enter the amount line This the credit allowed,
2002 Deloitte & Touche Tax Technologies LLC ID49PO01
DT
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49R
TC49R01
10-09-02
RECAPTURE OF IDAHO INVESTMENT TAX CREDIT
Month Day Year Month Day Year
r calendar year 2002
ame(s) as shown on retum
AVISTA CORPORATION
Social Security Number or EIN
91-0462470
PART IDENTIFY PROPERTY THAT CEASED TO QUALIFY AS IDAHO INVESTMENT TAX CREDIT PROPERTY
Properties Property Description
Various Uti I ity Property
Various Uti I ity Property
Various Uti l ity Property
Vari ous Uti l i ty Property
Various Utility Property
PART II ORIGINAL IDAHO INVESTMENT TAX CREDIT
Properties
1. Date property was placed
in service
,....,'..,
1998 1999 2000 2001 2002
2. Cost or other basis
..,.."
11,728 888 768
3. Credit percentage
.......,
4. Original credit
Multiply line 2 by line 3.352 263
, . , , ,
5, Date property ceased
to qualify 2002
Number of full years
between the date on line 1
and thp. rI",tP. nn lin.. ~
PART III COMPUTATION OF RECAPTURE TAX
Recapture percentage
from table, page 2
. , . . , , , .
Tentative recapture tax.
Multiply line 4 by line 7.210
. , , , .
Add line 8, columns A through E,291
. , . . . , . , , . , , , . . , . , , . . . , . . . , . . , , . . . . . . , , . . , , .
10,Pass-through share of credit recapture from S corporations, partnerships, estates or trusts
, . . . , , . . , , . , , .
11.Add lines 9 and 10.291
. , . . . , . . . . . . . . . , . . . , , . . . . , . . . . . . . , , , , . , . , , . . . . , , . . .
12,Credit recapture distributed to shareholders, partners or beneficiaries
. . , . . . . , , , , . . , . . . , . . . . .
13.Enter the portion of original credit on line 4 not used to offset tax in any year, Do not enter more
than line 11, Any unused credit on this line cannot be used as a carryover.
. . . . . , , , . . . . . . . . . , . . , . ,
14.Add lines 12 and 13.
, . . . . . . , , . . , . , , . . , , . , , , , , . , , . , , , . . . , , . . , . . . , , . . . , .
15,Recapture of investment tax credit, Subtract line 14 from line 11. Enter here and on the proper
line of your tax return. Do not use this amount to reduce current year's investment tax credit
computed on Form 49,291
2002 Deloitte & Touche Tax Technologies LLC ID49RP01
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