Schedule Ct-1040ba - Nonresident Business Apportionment - Connecticut Department Of Revenue - 2014 Page 2
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3Who Must Allocate or Apportion Business Income
another state does not permit allocation on the basis of separate
books and records, a consistent allocation of income may not
An allocation or apportionment of business income must be made
be possible.
if you are a nonresident and you are carrying on business both
in and outside of Connecticut.
Example 3: Assume the same facts as in Example 1 except
Generally, you are considered to be carrying on business at the
that the plumber allocated, on the basis of separate books
location:
and records, the income derived from his plumbing business
on his Connecticut nonresident return as follows. The income
1. Where you maintain, operate, or occupy desk space, an
from his plumbing business is $134,000 with $91,500 being
offi ce, a shop, a store, a warehouse, a factory, an agency, or
from Connecticut business and $42,500 from Massachusetts
other place where your affairs are regularly carried on (this
business. Therefore, on his Massachusetts return, this taxpayer
summary is not all inclusive); or
must also allocate $91,500 of this income to Connecticut
2. Where your business is transacted with a fair measure of
and $42,500 to Massachusetts since Massachusetts permits
permanency and continuity.
allocation on the basis of separate books and records.
You are considered to be carrying on business outside Connecticut
if you maintain, operate, or occupy outside Connecticut an offi ce,
Who Must Complete Schedule B
a shop, a store, a warehouse, a factory, an agency, or other place
If your books and records do not satisfactorily disclose the portion
where your business matters are systematically and regularly
of business income derived from or connected with sources within
carried on.
Connecticut, income from business carried on both in and outside
You are not considered to be carrying on business outside
of Connecticut must be apportioned by using the business
Connecticut and may not allocate or apportion business income if
apportionment percentage (arrived at by completing Schedule
you have an occasional or isolated business transaction outside
B) or by using an approved alternative method. Schedule B of
Connecticut or if you have no regular place of business outside
Schedule CT-1040BA must be completed for this purpose and
of Connecticut.
attached to Form CT-1040NR/PY. If you submit an alternative
method of apportionment, you must also complete Schedule CT-
You are not considered to be carrying on business in Connecticut
1040BA and include with it information explaining the alternative
if your business activities in Connecticut are considered
method of apportionment.
casual, isolated, or inconsequential. See Activities Considered
Casual, Isolated, or Inconsequential in the Form CT-1040NR/PY
The business apportionment percentage or alternative method
instruction booklet.
is not applied to income from the rental of real property or gains
(losses) from the sale of real property. The entire rental income
Example 1: A plumber, who is a resident of Rhode Island,
from Connecticut real property or gain from the sale of the
carries on his business from an offi ce in Danielson, Connecticut.
property is allocated to Connecticut and the entire amount of
He has maintenance contracts with housing authorities in the
any loss from the sale is allocated to Connecticut. Rental income
Worcester, Massachusetts, area that require him to regularly
from real property located outside Connecticut or gain from the
perform his services at various locations in and around
sale of this property is allocated outside Connecticut. Any loss
Worcester. This taxpayer is considered to be carrying on
business in Connecticut (by reason of his offi ce in this state)
connected with the property is allocated outside Connecticut.
and in Massachusetts (because his business is conducted there
The business apportionment percentage is applied to
with a fair measure of permanency and continuity).
business income (loss), farm income (loss), or to the income
Example 2: Assume the same facts as in Example 1 except
from intangible personal property (such as annuities, dividends,
that the taxpayer carries on his business from an offi ce in
interest, and gains from the disposition of intangible personal
Auburn, Massachusetts, and has maintenance contracts with
property) if the property is used in or connected with a business
housing authorities in northeast Connecticut that require him
carried on both in and outside of Connecticut.
to regularly perform his services at various locations in and
around Connecticut. This taxpayer is considered to be carrying
If you carried on more than one business for which an
on business in Massachusetts (by reason of his offi ce there)
apportionment of business income is required on Schedule
and in Connecticut (because his business is conducted here
CT-1040BA, prepare a separate Schedule CT-1040BA for each
with a fair measure of permanency and continuity).
business and attach all schedules to Form CT-1040NR/PY.
Who Must Complete Schedule A
Schedule A Instructions
Any nonresidents who are required to allocate or apportion
In Column 1 and Column 2, list the exact locations both in and
income because they carry on business both in and outside of
outside of Connecticut where you carry on business. In Column 3,
Connecticut must complete Schedule A.
describe the places listed in Column 1 and Column 2 (for example,
If income is determined from separate books and records
branch office, agency, factory, warehouse, etc.) and state
of the business (allocation of income): If you carry on
whether you rent or own these places.
business both in and outside of Connecticut and maintain
books and records that satisfactorily disclose the portion of
Schedule B Instructions
business income derived from or connected with sources within
Connecticut, check the box in the space immediately below
Complete this schedule if business is carried on both in and
Schedule A. Do not complete Schedule B.
outside of Connecticut and you do not maintain books and
records that satisfactorily disclose the portion of business income
If you report income using this method, your income reported
derived from or connected with sources within Connecticut.
to other states in which you carry on your business, where the
states permit allocation on the basis of separate books and
Line 1 - Real Property Owned
records, must result in a consistent allocation of income. Where
Enter in Column A the average value of all real property owned,
wherever located, by the business. Do not include in Column A
CT-1040BA (Rev.
)
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