Form Sc-02 - Combined Report Form - Multnomah County Business Income Tax (Page 2 of 2) in pdf

The Bureau of Licenses administers both the Portland City Business License Program and the Multnomah County

Business Income Tax Program. Request further information or forms as needed from the Bureau at 1900 SW 4th Ave,

Suite #3500, Portland, OR 97201-5350 or access our World Wide Web site at

INSTRUCTIONS FOR S-CORPORATION RETURN - 2002

Note: Please enter your business code below your FEIN. You may find this code in Section B of page 1 of federal form 1120S.

Ordinary income is income before distribution to shareholders, use line 21 of federal form 1120S.

Add back Multnomah County business income taxes, and other income taxes, deducted to arrive at net income (line 1).

Add (Subtract) lines 2 through 10 on the Schedule K, any Oregon modifications related to business and other pass-through income (loss) by

entities already licensed/taxed by Portland/Multnomah County.

Add any compensation paid to controlling shareholders (individuals or families who together hold more than 5% of the stock). This includes

wages, commissions, salaries (current and deferred), and interest. Enter the number of controlling shareholders.

A deduction for compensation is allowed but cannot exceed the lesser of compensation paid (line 4), 75% of the income (line 5), or $55,000 per

controlling shareholder. No deduction is allowed if line 5 is a loss.

Apportionment (line 8 and line 18) Multiple factor apportionment methods are not allowed.

Gross income includes all income (gross receipts, service income, interest, dividends, income from contractual agreements, gross rentals and gains

on sale of business property) from activity within the City or County. With few exceptions, income in the City is also in Multnomah County.

Income may be apportioned only if there is regular business activity outside the City/County. Services performed outside the City/County may be

apportioned based upon cost of performance outside the applicable jurisdiction. Sales of tangible personal property may be apportioned only if a

business has payroll or property outside the jurisdiction

MULTNOMAH COUNTY BUSINESS INCOME TAX

County gross income includes income from all activity within the County (see apportionment instructions above). Enter the gross income

within the County as the numerator of the fraction and gross income everywhere as the denominator of the fraction. Divide to determine the

percentage of Subject Net Income to apportion to Multnomah County. Round apportionment percentages to six places (xx.xxxx% or .xxxxxx).

10. Net Operating Losses (as previously reported on line 9 of prior Combined Report Forms) are allowed a maximum carryforward of five (5)

years. The annual deduction cannot exceed 75% of the apportioned income for the current year.

Enter all prepayments (quarterly, extension payments and credit carried forward from prior years).

13.

Enter all late and/or underpayment penalties that apply (see penalty calculation instructions below).

14.

Interest on taxes not paid by the original due date (April 15 for calendar year taxpayers) is calculated at 10% per annum (.00833 x no. of

15.

months). Calculate interest from original due date to the 15

day of the month following the date of payment.

Total lines 12 through 15 to determine balance due or (overpayment) for Multnomah County Business Income Tax.

16.

Identify overpayment for refund (not less than $15) or credit (any amount) for next tax year. Amount may be divided between the two.

17.

Penalty calculation (line 14 and line 24)

A delinquent penalty of 5% of the fee/tax must be added if the report and fee/tax are filed past the due date. An additional penalty of 20% of the

fee/tax must be added if the report and fee/tax is 4 months or more past due. Any report and fee/tax, which is delinquent three or more consecutive

years, accrues an additional 100% of the fee/tax as penalty. Underpayment penalties may also be due, however, no underpayment penalties are due

if a timely prepayment is made which is 90% of the total fee/tax due (City minimum of $100), or 100% of the prior year’s fee/tax.

CITY OF PORTLAND BUSINESS LICENSE FEE

Portland gross income includes income from all activity within Portland (see apportionment instructions above). Enter the gross income in

18.

Portland as the numerator of the fraction and gross income everywhere as the denominator of the fraction. Divide to determine the percentage

of Subject Net Income to apportion to City of Portland. Round apportionment percentages to six places (xx.xxxx% or .xxxxxx).

20. Net Operating Losses (as previously reported on line 19 of prior Combined Report Forms) are allowed a maximum carryforward of five (5)

years. The annual deduction cannot exceed 75% of the apportioned income for the current year.

22. The minimum fee ($100) is not refundable once a license has been issued.

22a. The fee paid with the original license application is an estimated fee which must be adjusted based upon the taxable income of the first license

year. If you have not previously made application for a business license, please attach one. Line 22a is only computed for your first year of

business or if you are reinstating your business license after a lapsed period. Enter the fee as calculated on line 22, minimum $100.

22b. An additional temporary rate of 1% for taxable year 2002 has been enacted to assist in the funding of schools. This fee is in addition to

fees computed on lines 22 and 22a.

Enter all prepayments (quarterly, extension payments, payments with application and credits from prior years).

23.

Enter all late and/or underpayment penalties that apply (see penalty calculation instructions above).

24.

Interest on fees not paid by the original due date (April 15 for calendar year taxpayers) is calculated at 10% per annum (.00833 x no. of

25.

months). Calculate interest from original due date to the 15

day of the month following the date of payment.

Total lines 22 through 25 to determine balance due or (overpayment) for City of Portland Business License.

26.

Identify overpayment for refund (not less than $15) or credit (any amount) for next tax year. Amount may be divided between the two.

27.

If payment is due, make check payable to City of Portland.

28.

ATTACH DETAILED SCHEDULES FOR NOL DEDUCTIONS OR OTHER DEDUCTIONS TO INCOME

Form Sc-02 - Combined Report Form - Multnomah County Business Income Tax Page 2

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