How does below section applied: SECTION 11. Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from sub-rentals. Comment This section is admittedly arbitrary in using original cost rather than depreciated cost, and in valuing rented property as eight times the annual rental. This approach is justified because the act does not impose a tax, nor prescribe the depreciation allowable in computing the tax, but merely provides a basis for division of the taxable income among the several states. The use of original cost obviates any differences due to varying methods of depreciation, and has the advantage that the basic figure is readily ascertainable from the taxpayer's books. No method of valuing the property would probably be universally acceptable. In any situation where it is impossible to ascertain original cost, section 18 may be used to determine a fair value for such property. Section 18 may also be necessary to aid in determining “net annual rental value” of tangible personal property where the actual rent is so related to services that the part attributable to the object is difficult to determine. Section 18 may also be used to determine a reasonable rental rate for this fraction where the actual rent is zero or nominal such as may be the case where a local government in attempting to induce an industry to come to a community supplies the property at a nominal rental.

Section 11 describes how to value property for the purposes of apportioning income among different states for tax purposes. It provides specific methods for valuing both owned and rented property: 1. **Owned Property**: Property that is owned by the taxpayer is valued at its original cost. This means the initial price paid for the property when it was purchased, without any adjustments for depreciation or appreciation over time. The use of original cost simplifies the valuation process and ensures consistency, as depreciation methods can vary. 2. **Rented Property**: Property that is rented by the taxpayer is valued at eight times the net annual rental rate. The net annual rental rate is calculated by taking the annual rental rate paid by the taxpayer and subtracting any rental income the taxpayer receives from subleasing the property (sub-rentals). The comment acknowledges that using original cost and valuing rented property at eight times the net annual rental rate are arbitrary choices, but they are justified because the Act's purpose is not to impose a tax or determine depreciation but to provide a uniform basis for dividing taxable income among states. The chosen methods avoid complications from different depreciation practices and provide easily verifiable figures from the taxpayer's records. Section 18 is mentioned as a provision that can be used when it is impossible to ascertain the original cost of owned property or to determine a fair value. It can also help in calculating the net annual rental value when the rent includes related services that make it difficult to separate the amount attributable to the property itself.

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