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amount of nonseparately stated nonbusiness income items for all states (every-

property utilized by the taxpayer will be included at its original cost basis.

where). The amount entered in Column E, line 1d is also entered in Schedule E,

Line 7. Government Property. All government property (whether local,

line 2. Please note that when an amount is entered in Schedule E, line 2, income

state, or federal), when such property is made available for use by the tax-

is entered as a negative amount and losses are entered as a positive amount.

payer, will be reported at its current fair market value.

Enter on Column F, line 1d, the sum of the amounts entered in Column F on

Line 8. Any other real or tangible personal property used in production of busi-

line 1a, line 1b, and line 1c. The amount entered in Column F, line 1d is the net

ness income.

amount of nonseparately stated nonbusiness income items to be allocated only to

Line 9. Any other real or tangible personal property used in production of busi-

Alabama. The amount entered in Column F, line 1d is also entered in Schedule E,

ness income.

line 6.

Line 10. Less construction in progress (if included in the amounts on lines 1

Enter under the Separately Stated Items heading on line 1e, line 1f, and

through 9).

line 1g a description of the separately stated item.

Line 11. Enter in each column the totals of lines 1 through 10.

For each separately stated item entered on line 1e, line 1f and line 1g:

Line 12. Enter in the appropriate column the average value of property in Ala-

1. Enter on Column A the total gross income (from all states – everywhere)

bama and Everywhere. See Alabama Department of Revenue regulation number

from the item.

810-27-1-4-.12 for rules regarding computations other than beginning and end of

2. Enter on Column B only the Alabama gross income from the item.

year values.

3. Enter on Column C the expenses related to the gross income (everywhere)

Line 13. In the Beginning of Year columns, enter the amount of expense for the

entered in Column A.

rental of real or tangible personal property used in the production of business in-

4. Enter on Column D only the expenses related to the Alabama gross income

come in Alabama and Everywhere. Annualize for short-period returns. Multiply the

entered in Column B.

annual rent expense by 8, and enter the result in the End of Year column. This is

the capitalized rental value.

5. Enter on Column E the amount resulting from subtracting the expense

amount in Column C from the gross income (everywhere) amount in Column A.

Line 14a. Add the amounts on lines 12 and 13 in the End of Year column for

Alabama.

6. Enter on Column F the amount resulting from subtracting the Alabama ex-

pense amount in Column D from the Alabama gross income amount in Column B.

Line 14b. Add the amounts on lines 12 and 13 in the End of Year column for

Everywhere.

Enter on Column E, line 1h, the sum of the amounts entered in Column E on

line 1e, line 1f, and line 1g. The amount entered in Column E, line 1h is the net

Line 15. Divide the amount on line 14a by the amount on line 14b. Compute

amount of separately stated nonbusiness income items for all states (everywhere).

the percentage to at least 4 decimal places, for example, 12.3456%, and enter the

The amount entered in Column E, line 1h is also entered in Schedule K, line 10

percentage on line 15. This percentage entered on line 15 is the ALABAMA PROP-

(Federal Amount column).

ERTY FACTOR.

Enter on Column F, line 1h, the sum of the amounts entered in Column F on

PAYROLL FACTOR

line 1e, line 1f, and line 1g. The amount entered in Column F, line 1h is the net

Line 16a. Enter the amount of wages or other compensation paid to employees

amount of separately stated nonbusiness income items to be allocated only to Ala-

for the production of business income in Alabama. NOTE: Only amounts paid di-

bama. The amount entered in Column F, line 1h is also entered in Schedule K, line

rectly to employees are included in the payroll factor computations for line 16a and

10 (Alabama Amount column). The amount entered in Column F, line 1h is also

line 16b.

entered on Schedule D, line 4.

Line 16b. Enter the amount of wages or other compensation paid to employees

SCHEDULE C — Apportionment Factor Schedule

for the production of business income everywhere. (Include officers’ salaries.)

The Alabama business activity of an Alabama S corporation is represented by

Line 16c. Divide the amount on line 16a by the amount on line 16b, and enter

its Alabama apportionment factor. With the exception of those special cases re-

the number on line 16c as a four decimal place percentage. The percentage en-

ferred to in Alabama Department of Revenue regulation number 810-27-1-4-.18,

tered on line 16c is the ALABAMA PAYROLL FACTOR.

the Alabama apportionment factor generally consists of the average of: the Ala-

SALES FACTOR

bama property factor; the Alabama payroll factor; and, the Alabama gross receipts

Line 17. Enter gross receipts from Alabama destination sales except sales to

factor.

the U.S. government. This includes total gross receipts from sales of tangible prop-

Alabama Department Revenue regulation number 810-27-1-14-.09 generally

erty shipped to Alabama from locations both within and without Alabama (See Ala-

explains the Alabama apportionment factor. Regulation numbers 810-27-1-14-.10

bama Department of Revenue regulation number 810-27-1-4-.16).

through .12 generally explain the Alabama property factor. Regulation numbers

Line 18. Enter the amount of sales shipped from an Alabama origin to any state

810-27-1-14-.13 and .14 generally explain the Alabama payroll factor, and regula-

or foreign country where this company is not taxable. Also enter total sales to the

tion numbers 810-27-1-4-.15 through .17 generally explain the Alabama sales

U.S. government shipped from Alabama (See Alabama Department of Revenue

(gross receipts) factor. See the Alabama Department of Revenue Web site

regulation number 810-27-1-4-.16).

( ) for a complete text of the Alabama multistate taxation

Line 19. In the Alabama column enter the total of lines 17 and 18. In the Every-

laws and regulations.

where column enter total sales for everywhere. If this amount does not correspond

PROPERTY FACTOR

with line 1 of federal Form 1120S, attach an explanation and reconciliation.

In the appropriate columns, enter the amounts (at cost, unless stated other-

Line 20. Enter in the appropriate columns the gross receipts from the sale or

wise) of property available for use in the production of business (apportionable)

disposition of assets used in the business. See Alabama Department of Revenue

income.

regulation number 810-27-1-4-.15 for exclusion of amounts which would distort the

Line 1. Inventories

factor.

Line 2. Land

Line 21. Enter in the appropriate columns the gross business interest income.

Line 3. Furniture and fixtures

Line 22. Enter in the appropriate columns the gross business income from

Line 4. Machinery and equipment

rents.

Line 5. Buildings and leasehold improvements

Line 23. Enter in the appropriate columns the amounts of other business gross

Line 6. Property financed through industrial development boards or by indus-

receipts, and identify the nature of such receipts and their location on the federal

trial revenue bonds issued by municipalities. All Industrial Development Board

return.

Instructions For Form 20s - Preparation Of Alabama Department Of Revenue S Corporation Information/tax Return - 2006 Page 4

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