Fillable Form 4347 - Apportionment Schedule-Bank Franchise Tax (Page 2 of 2) in pdf

INSTRUCTIONS FOR APPORTIONMENT SCHEDULE

Who may apportion income? A taxpayer must have income from business activity taxable by this state and at least one other state, to

apportion income. The income of the taxpayer is divided between the states in which the business is conducted pursuant to the property,

payroll and deposits apportionment factors. If one or more of the three factors does not exist (that is, there is no denominator) determine

the apportionment factor (Apportionment Schedule, Line 4) by dividing by the number of factors used.

Taxable in another state: A taxpayer is “taxable in another state” if, by reason of business activity in another state, it is subject to and did

pay one of the types of taxes specified: a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing

business, or a corporate tax. The taxpayer must carry on business activities in another state. If the taxpayer voluntarily files and pays one

or more of such taxes when not required to do so by the laws of that state or pays a minimal fee for qualification, organization or for the

privilege of doing business in that state, but does not actually engage in business activities in that state, and does not have business facili‑

ties in that state or does actually engage in some activity, not sufficient for nexus, and the minimum tax bears no relation to the taxpayer’s

activities with such state, the taxpayer is not “taxable” in another state.

1. PROPERTY FACTOR: The denominator is the average value of all the taxpayer’s real and tangible personal property owned or rented

and used during the income year, except under this subsection, any property that the bank acquired in settlement of debts and is held for

sale under Section 362.165, RSMo, or Section 29 Title 12 United States Code.

The numerator of the property factor shall include the average value of the taxpayer’s real and tangible personal property owned or rented

and used in this state or in another state which does not subject the taxpayer to a tax described in the above instruction, “Taxable in

Another State,” during the income year. An automobile assigned to a traveling employee shall be included in the numerator of the factor of

the state to which the employee’s compensation is assigned under the payroll factor or in the numerator of the state in which the automo‑

bile is licensed.

Property owned by the taxpayer shall be valued at its original cost. As a general rule “original cost” is deemed to be the basis of the

property for federal income tax purposes (prior to any federal adjustments) at the time of acquisition by the taxpayer and adjusted by

subsequent capital additions or improvements thereto and partial disposition thereof, by reason of sale, exchange, abandonment, etc.

Property rented by the taxpayer is valued at eight times the net annual rental rate. The net annual rental rate is the total annual rental

rate paid by the taxpayer, less total annual rental rates received by the taxpayer from subrentals. As a general rule the average value of

property owned by the taxpayer shall be determined by averaging the values at the beginning and ending of the income year. However,

the Director of Revenue may require averaging by monthly values if such method of averaging is reasonably required to properly reflect

the average value of the taxpayer’s property for the income year.

2. PAYROLL FACTOR: The payroll factor includes only compensation which is attributable to the income subject to apportionment.

The denominator of the payroll factor is the total compensation paid everywhere during the income year.

The numerator of the payroll factor is the total amount paid in this state or in another state which does not subject the taxpayer to a tax

described in the above instruction, “Taxable in Another State,” during the income year by the taxpayer for compensation. Compensation is

paid in this state if any one of the following test, applied consecutively, are met: a) The employee’s service is performed entirely within this

state; b) The employee’s service is performed both within and without this state, but the service performed without this state is incidental

to the employee’s service within the state (the word “incidental” means any service which is temporary or transitory in nature, or which is

rendered in connection with an isolated transaction); c) If the employee’s services are performed both within and without this state, the

employee’s compensation will be attributed to this state: (i) if the employee’s base of operations is in this state; or (ii) if there is no base

of operations in any state in which some part of operations of the service is performed, but the place from which the service is directed or

controlled is in this state; or (iii) if the base of operations or the place from which the service is directed or controlled is not in any state in

which some part of the service is performed by the employee’s residence is in this state. The term “base of operation” is the place of more

or less permanent nature from which the employee starts his work and to which he customarily returns in order to receive instructions from

the taxpayer or communications from his customers or other persons, or perform any other functions necessary to the exercise of his trade

or profession at some other point or points.

3. DEPOSITS FACTOR: The denominator of the deposits factor is the average deposits recorded on the books everywhere by the taxpayer

during the income year.

The numerator of the deposits factor is the average of deposits recorded on the books at the main banking house and branches of the

taxpayer within this state during the income year.

Such average shall be determined by averaging deposits as of the first of the year with deposits as of the last day of the year.

NOTE: Percentages on Lines 1–4 should be extended to four digits to the right of the decimal.

DOR‑4347 (11‑2012)

Form 4347 - Apportionment Schedule-Bank Franchise Tax Page 2

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