SECTION C: Sales Factor
Within the NIZ – Total sales in the NIZ during the tax period. Sales of tangible personal property are consid-
ered in the NIZ if the property is delivered or shipped to a purchaser that takes possession within the NIZ,
regardless of the FOB point or other conditions of the sale. Sales, other than sales of tangible personal prop-
erty, are in the NIZ if:
1. The income-producing activity is performed in the NIZ; or
2. The income-producing activity is performed within and outside the NIZ, and a greater proportion of
the income-producing activity is performed in the NIZ than in any other location, based on costs of
performance.
Within PA – All sales sourced to locations inside PA. This includes all sales destined to locations inside PA plus
sales of goods picked-up by customers in the NIZ, either in their own vehicles or by common carriers arranged
for by the customers and transported to locations outside the commonwealth. Since the sourcing of sales
picked-up in the NIZ and transported outside the commonwealth is different for the calculation of the credit
than the rules for sourcing these sales in the calculation of the three-factor apportionment, this may not equal
the sales reported inside PA on Table 3 of the Tables Supporting Determination of Apportionment Percentage,
form RCT-106.
SECTION D: Total Apportionment
Add the three factors from Sections A, B and C.
SECTION E: Calculation of Tax Percentage
Divide the Total Apportionment by 3.
SECTION F: NIZ Tax Liability
Multiply the Total Tax Payments remitted to the department during the calendar year from Sections A, B and
C by the Tax Percentage from Section D. This is the NIZ Tax Liability to be applied on a quarterly basis on the
NIZ Corporation Tax Statement.
EXAMPLE
Property In NIZ
10
A. PROPERTY FACTOR
=
0.100000
PA Property
100
Payroll In NIZ
20
B. PAYROLL FACTOR
=
0.200000
PA Payroll
100
Sales In NIZ
5
C. SALES FACTOR
=
0.050000
PA Sales
100
D. TOTAL APPORTIONMENT
0.350000
E. TAX PERCENTAGE
0.350000 / 3
=
0.116667
Tax $1,000 X 0.116667
=
$ 117
F. NIZ TAX LIABILITY
If the Pennsylvania corporate tax payments made total $1,000,
the NIZ corporate tax liability is $117, or 1,000 X 0.116667.
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