15-35-107. When value of coal may be imputed -- procedure. (1) The department may impute a value to the coal that approximates market value f.o.b. mine in a case where:

(a) the operator of a coal mine is using the produced coal in an energy-conversion or other manufacturing process; or

(b) a person sells coal under a contract that is not an arm's-length agreement.

(2) For purposes of subsection (1), "market value f.o.b. mine" means the value of the coal subsequent to being prepared for shipment on the mode of transportation taken to its final destination.

(3) When imputing value, the department may apply the factors used by the federal government under 26 U.S.C. 613, or that provision as it may be labeled or amended, in determining gross income from mining or the department may apply any other or additional criteria it considers appropriate. Each subject taxpayer shall upon request by the department furnish a copy of its federal income tax return, with any amendments, filed for the year in which the value of coal is being imputed and copies of the contracts under which it is selling coal at the time. When the department's estimate of market value is contested in any proceeding, the burden of proof is on the contesting party.