Partnership & S Corporation Apportionment Department of Revenue Taxation



Focusing on these funds, therefore, allows us to analyze the effect of explanatory political and economic factors on subnational funds apportionment under diverse transfer regimes. Furthermore, the apportionment of other key institutions-such as the party’s executive committee and party conventions-was often based on that of the legislature. Discrepancies in the contrastive capacity of different positions, resulting in neutralisation in particular contexts, thus reflect inequalities in the apportionment of alicensing power. I do not argue that apportionments should be based on actual votes cast rather than population.


Corporation C has a 20% profits interest in Partnership P. C owns a building (original cost $100,000) which it rents to P at a fair market rate of $12,000 per year. C must include the $100,000 original cost of the building in its property factor.

( Payroll Factor

The annual rent is $13,800. Mobile Property, motor vehicles, construction equipment, or other tangible personal property that an owner or lessee regularly moves from place to place in the course of its business. Property normally used in a fixed location is not mobile property merely because it happens to be moved into or out of Massachusetts or another state during the taxable year. All transactions that determine a taxpayer’s ability to apportion or determine the composition of a taxpayer’s apportionment percentage are subject to the sham transaction doctrine and the related tax doctrines as set forth in M.G.L. c. The critical element in determining whether income is “business income” is the identification of the transactions and activities that are the elements of a particular trade or business. In general, all transactions and activities of the corporation that are dependent on or contribute to the operations of the corporation’s economic enterprise as a whole give rise to business income. A trade or business with income inside and outside of California may be subject to California apportionment and allocation rules.

  • Another form of malapportionment is called reactive malapportionment, which can come about in three ways.
  • Sales of tangible property are sourced to the destination of the sale, but accounting for the sale of services is more complex.
  • Taxpayer A has its executive office, sales office, and factory in New York.
  • Shows a possible analogue network structure with transmission loss apportioned across the network.
  • Malapportionment might be deliberate, as when the governing documents guarantee outlying regions a specific number of seats.
  • Persons entitled to apportioned parts of rent have the same remedies for recovering them when payable as they would have had in respect of the entire rent; but a lessee is not to be liable for any apportioned part specifically.
  • The apportionment formula must ensure that no more than 100 percent of a corporation’s income would be taxed if every state chose the same formula—even if, in practice, the interaction of differing standards can yield double taxation .

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Regulation 830 CMR 63.38.1: Apportionment of Income

Same facts as in Example 4, except that a customer located in Massachusetts mails the camera directly to the out-of-state facility owned by Camera Corp to be fixed, and receives the repaired camera back in Massachusetts by mail. The sale of the service is in Massachusetts. Gross receipts that result in an allocable item of income, irrespective as to whether that allocable item of income is allocated to Massachusetts. A corporation rents a 10-story building at an annual rent of $1,000,000. It occupies two stories and sublets eight stories for $1,000,000 a year. The net annual rent of the corporation must not be less than two-tenths of the corporation’s annual rent for the entire year, or $200,000. Corporations subject to Combined Reporting.Corporations subject to combined reporting are subject to the Apportionment rules in this regulation and the apportionment provisions of 830 CMR 63.32B.2.

Ad Corp is a corporation based outside Massachusetts that provides advertising and advertising-related services in Massachusetts and in neighboring states. Ad Corp enters into a contract at a location outside Massachusetts with an individual customer who is not a Massachusetts resident to design advertisements for billboards to be displayed in Massachusetts, and to design fliers to be mailed to Massachusetts residents. All of the design work is performed outside Massachusetts. The sale of the design services is in Massachusetts because the service is physically delivered on behalf of the customer to the customer’s intended audience in Massachusetts.

  • The taxable net income of Corporation C is the sum of these separately apportioned amounts.
  • The most comprehensive corporate income tax software on the market, covering virtually every type of return.
  • With the integration of a solar and storage microgrid, the strata company earns a margin on the investment, can advertise carbon-free energy, and is less reliant on grid-supplied energy.
  • Tax or Taxes, with regard to Massachusetts, any tax or excise, including the corporate excise imposed under M.G.L. c.
  • Each margin account must be assigned to a specific engineer who must assertively manage the account across the system architecture.

1.Two Factors Applicable. In cases where only two of the three apportionment factors are applicable, the taxable net income of the taxpayer is apportioned by a fraction, the numerator of which is the remaining two factors with their respective weights and the denominator of which is the number of times that such factors are used in the numerator. “Business customer” means a customer that is a business operating in any form, including an individual that operates a business through the form of a sole proprietorship.

Apportionment in respect of time

A service delivered electronically “through” a customer to third-party recipients is a service that is delivered electronically to a customer for purposes of resale and subsequent electronic delivery in substantially identical form to end users or other third-party recipients. “State where a contract of sale is principally managed by the customer,” means the primary location at which an employee or other representative of a customer serves as the primary contact person for the taxpayer with respect to the implementation and day-to-day execution of a contract entered into by the taxpayer with the customer. “Place of order,” means the physical location from which a customer places an order for a sale other than a sale of tangible personal property from a taxpayer, resulting in a contract with the taxpayer. In the case of an agent who spends 50% or more of his or her time at a taxpayer’s owned or rented business premises, the agent is chiefly situated at that business location. Compensation paid for personal services rendered by leased employees is includible in the payroll factor of the taxpayer if the taxpayer is the recipient of the services of the leased employee. Compensation for personal services rendered by leased employees to client companies is excluded from the payroll factor of employee leasing companies. In determining whether two business activities conducted by a taxpayer are related, the Commissioner will apply the following evidentiary rules.


Non-business income may either be directly allocated to the appropriate state or treated as business income, subject to the single sales factor. The Receipts Factor Apportionment Schedule is required if using this method and can be completed by clicking the appropriate edit button on Revenue Online. Otherwise, submit via the e-Filer Attachment on Revenue Online.

Statewide Contracts

In such cases, the repaired camera is then returned to the customer at Camera Corp’s Massachusetts location. The sale of such services is in Massachusetts.


Failure by the taxpayer to produce evidence that is in the control of either the taxpayer or an entity controlled by the taxpayer gives rise to an inference that the evidence is unfavorable. Manufacture, Manufacturing or Manufacturing Activity, the process of transforming raw or finished physical materials by hand or machinery, and through human skill and knowledge, into a new product possessing a new name, nature and adapted to a new use. In determining whether a process constitutes manufacture, manufacturing or manufacturing activity, the Commissioner will examine the facts and circumstances of each case in the manner set forth in the Manufacturing Corporation Regulation, 830 CMR 58.2.1, . Updates to Exhibit A include College Specific Allocations, Equal Employment Opportunity, Retention and Enrollment Outreach, and Physical Plant & Institutional Support programs. Updates to Exhibit A include College Specific Allocations , Basic Needs Centers, and Mental Health Support programs. G−1) is also included in the table. Soil contribution was calculated as the sum of oxides of Si, Ca, Fe, and Ti.


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Damages: “Built-In” Apportionment Using Comparable License Agreements – Patent – United States –

Damages: “Built-In” Apportionment Using Comparable License Agreements – Patent – United States.

Posted: Wed, 26 Oct 2022 10:34:37 GMT [source]

Business income is subject to apportionment and nonbusiness income is subject to allocation. Where a lessee is evicted from, or surrenders or forfeits possession of part of the property leased to him, he becomes liable at common law to pay only a rent apportioned to the value of the interest which he still retains. So where the person entitled to the reversion of an estate assigns part of it, the right to an apportioned part of the rent incident to the England, and in many of the British colonies. In the cases just mentioned there is apportionment in respect of estate by act of the parties.

2.Voluntary Filing Insufficient. A voluntary filing in another state not required by the law of such other state does not cause the taxpayer to be subject to tax in that state.

  • The following facts apply to examples A.
  • Apportionment can take relatively simple forms.
  • Co-owners of a property may decide to apportion maintenance costs between themselves, according to the percentage of ownership or interest held by each party.
  • The development and sale of the custom software is properly characterized as a service transaction, and the sale is assigned to Massachusetts because the software is physically delivered to the customer in Massachusetts.
  • Such apportionment was, however, in certain cases allowed in England by the Distress for Rent Act 1737, and the Apportionment Act 1834, and is now allowed generally.

Nonbusiness income is all income other than business income. This symbol indicates a link to a non-government web site. Our linking to these sites does not constitute an endorsement of any products, services or the information found on them.

In this case, the formal margins that must be maintained by the customer will be a subset of the complete set being followed by the program. With the integration of a solar and storage microgrid, the strata company earns a margin on the investment, can advertise carbon-free energy, and is less reliant on grid-supplied energy. The revenue stream offsets the capital cost of installing DERs and can also account for maintenance and replacement costs. A sound planning initiative would be to attribute a percentage of revenue costs to a sink fund for replacing the assets at the end of their useful lifespan. Strata companies may decide to offer discounted electricity prices to attract tenants, but doing so would extend the payback period for the DER investment.

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