A taxpayer who maintains stock shall establish and maintain inventories for such stock.

The cost of goods sold during the taxable year shall be deducted.

The cost of goods sold during a taxable year shall be determined by adding the cost of goods purchased during the year to the opening stock and subtracting the value of the closing stock.

A taxpayer who uses the cash method shall calculate the cost of stock by use of the prime (direct) cost method or the absorption costing method, but a taxpayer using the accrual method shall calculate the cost of stock by use of the absorption costing method only.

The value of the closing stock shall be the book or market value, whichever is lower at that date. A taxpayer shall calculate the book value of the stock by use of the weighted average method. However, it may use another method, after obtaining the Department's written permission, and it may not change the method chosen except with the consent of the Department.