Instructions For Maine Franchise Tax Form 1120b-Me (Page 5 of 6) in pdf

SCHEDULE A - INSTRUCTIONS

APPORTIONMENT OF INCOME

(see 36 M.R.S.A. § 5206-E)

GENERAL INSTRUCTIONS

SPECIFIC INSTRUCTIONS

Schedule A is for financial institutions taxable both in and

Line 8. Receipts Factor:

The receipts factor is a fraction.

outside Maine. To the extent that a financial institution derives

The numerator is the Maine receipts of the taxpayer during the

its income from a unitary business carried on by 2 or more

tax period. The denominator is the receipts of the taxpayer

members of an affiliated group, Maine net income and Maine

everywhere in the U.S. during the tax period. See § 5206-E(2)

assets are determined by apportioning that part of the net

for a complete description of Maine and everywhere receipts.

income and assets of the entire group that derives from the

Line 9. Payroll Factor:

The payroll factor is a fraction. The

unitary business.

numerator is the total amount of compensation paid by the

Maine generally employs a three-factor formula to determine

taxpayer in Maine during the tax period, and the denominator

income and assets apportioned to Maine. However, one or

is the total compensation paid everywhere in the U.S. by the

more factors may be excluded from the apportionment formula

taxpayer during the tax period. See § 5206-E(4) for a complete

under certain circumstances. If a factor is excludable from

description of Maine and everywhere payroll.

the apportionment formula, the weighting of the remaining

Line 10. Property Factor:

The property factor is a fraction.

factors must be changed.

The numerator is the average value of the taxpayer’s real and

A factor is excludable only if both the numerator and

tangible personal property owned or rented in Maine plus loans

denominator are zero, but is not excludable merely because

and credit card receivables located in Maine during the tax

the numerator is zero. When excluding the receipts factor,

period, and the denominator is the average value of such

change the weight of the payroll and property factors to 50%

property everywhere in the U.S. during the tax period.

(0.5) each. When excluding either the payroll or property factor,

Property rented by the taxpayer is valued at 8 times the net

change the weight of the receipts factor to 66.67% (0.6667)

annual rental rate. Loans and credit card receivables are

and the weight of the remaining factor to 33.33% (0.3333). If

valued at outstanding principal, without regard to any reserve

two factors are excludable from the apportionment formula,

for bad debt. See § 5206-E(3) for a complete description of

change the weight of the remaining factor to 100%. If you are

Maine and everywhere property.

excluding any factors, attach a schedule detailing the factors

used and the apportionment computation. If the total of 8(C),

9(C) and 10(C) does not equal the amount you enter on line

11, your tax liability will not compute accurately.

REV. 12/05

Instructions For Maine Franchise Tax Form 1120b-Me Page 5

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