Form Tc-65 Form Tc-65 Tax Return & Instructions Page 15
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27Line 3 – Payroll Factor
Line 6 – Sales Factor Calculation
Wages, salaries, commissions and other includable
Determine the sales factor (decimal) by dividing line
compensation paid to employees for personal services
5h column A by line 5h column B.
must be included in the Utah factor to the extent the
services, for which the compensation was paid, were
NAICS Code for Taxpayer
rendered in Utah.
Line 7 – NAICS Code
Compensation is paid in Utah if:
Enter the six-digit NAICS code for this taxpayer from
1. the individual’s service is performed entirely within
your federal return (form 1120, Schedule K, line 2a;
Utah;
1120S, box B; 1065, box C, or corresponding line on
other federal returns). This is a mandatory fi eld. Your
2. the individual’s service is performed both within and
apportionment method may be determined by your
outside Utah, but the service performed outside
NAICS code. See Sales Factor Weighted Taxpayers
Utah is incidental to the individual’s service within
above.
Utah; or
Note: If this return is for a unitary group, do not enter
3. some of the service is performed in Utah and:
the NAICS code from your federal return. Instead, enter
a. the base of operations or, if there is no base of
the NAICS code that represents over 50 percent of
operations the place where the service is directed
the total sales everywhere generated from economic
or controlled, is within Utah, or
activities by all members of the unitary group.
b. the base of operations, or the place where the
service is directed or controlled is not in any state
Equally-Weighted Three
where some part of the service is performed, but
Factor Formula Election
the individual’s residence is in Utah.
If you are not a sales factor weighted taxpayer and are
Amounts reportable for employment security purposes
not electing the double-weighted sales factor (see lines
may ordinarily be used to determine the wage factor.
10 through 13 below), complete lines 8 and 9. If you
Overall wages, including Utah, are listed in column B.
are a sales factor weighted taxpayer or are electing the
double-weighted sales factor, leave lines 8 and 9 blank.
Line 4 – Payroll Factor Calculation
Determine the payroll factor (decimal) by dividing line
Line 8 – Total Factors
3a column A by line 3a column B.
Enter the sum of the factors from lines 2, 4 and 6.
Lines 5a - 5h –
Sales Factor
Line 9 – Apportionment Fraction
The sales factor is the fraction the sales/receipts within
Calculate the apportionment fraction to six decimals by
Utah for the taxable year bear to the overall sales/
dividing line 8 by the number of factors used (typically
receipts for the taxable year. Gross receipts from the
3 – property, payroll and sales).
performance of services in Utah are assigned to the
• If one or more of the factors are not present (i.e., there
Utah sales numerator if the purchaser of the service
is a zero in the denominator on lines 1f, 3a or 5h in
receives a greater benefi t of the service in Utah than
column B), divide by the number of factors present.
in any other state.
• If the numerator is zero, but a denominator is present,
Taxpayers that perform a service both in and outside
include that factor in the number of factors present.
Utah must include service income on line 5g in column
A (Inside Utah) if the purchaser of the service receives
Enter the apportionment fraction (decimal) here and on
a greater benefi t of the service in Utah than in any
Schedule A, line 14, if not electing the double-weighted
other state. The former “cost of performance” method
sales factor below.
no longer applies. (See UC §59-7-319(3)(a).)
Sales of tangible personal property are in Utah if the
Double-Weighted Sales
property is delivered or shipped to a purchaser within
Factor Formula Election
Utah regardless of the F.O.B. point or other conditions
of the sale, or if the property is shipped from an offi ce,
If you are not a sales factor weighted taxpayer, you may
store, warehouse, factory or other place of storage in
elect to give double-weight to the sales factor in the
Utah and:
apportionment calculation. If you elect this calculation,
enter an “X” on line 10 and complete lines 11 through 13.
1. the purchaser is the United States Government, or
2. the taxpayer is not taxable in the state of the pur-
Line 10 – Making the Election
chaser.
Enter an “X” on line 10 if you elect to double-weight
the sales factor.
Overall sales, including Utah, are listed in column B.
Enter totals of lines 5a through 5g in their respective
Line 11 – Doubled Sales Factor
columns on line 5h.
Multiply the sales factor (decimal) from line 6 by 2. This
will result in the sales factor being considered twice in
the calculation.
Page 13
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