Schedule Ct-1040ba - Nonresident Business Apportionment

If you report income using this method, your income reported

Who Must Allocate or Apportion Business Income

to other states in which you carry on your business, where the

An allocation or apportionment of business income must be made

states permit allocation on the basis of separate books and

if you are a nonresident and you are carrying on business both

records, must result in a consistent allocation of income. Where

in and outside of Connecticut.

another state does not permit allocation on the basis of separate

Generally, you are considered to be carrying on business at

books and records, a consistent allocation of income may not

the location:

be possible.

1. Where you maintain, operate, or occupy desk space, an

ofﬁ ce, a shop, a store, a warehouse, a factory, an agency, or

Example 3: Assume the same facts as in Example 1 except

other place where your affairs are regularly carried on (this

that the plumber allocated, on the basis of separate books

summary is not all inclusive); or

and records, the income derived from his plumbing business

on his Connecticut nonresident return as follows. The income

2. Where your business is transacted with a fair measure of

from his plumbing business is $134,000 with $91,500 being

permanency and continuity.

from Connecticut business and $42,500 from Massachusetts

You are considered to be carrying on business outside Connecticut

business. Therefore, on his Massachusetts return, this taxpayer

if you maintain, operate, or occupy outside Connecticut an ofﬁ ce,

must also allocate $91,500 of this income to Connecticut

a shop, a store, a warehouse, a factory, an agency, or other place

and $42,500 to Massachusetts since Massachusetts permits

where your business matters are systematically and regularly

allocation on the basis of separate books and records.

carried on.

Who Must Complete Schedule B

You are not considered to be carrying on business outside

If your books and records do not satisfactorily disclose the portion

Connecticut and may not allocate or apportion business income if

of business income derived from or connected with sources

you have an occasional or isolated business transaction outside

within Connecticut, income from business carried on both in

Connecticut or if you have no regular place of business outside

and outside of Connecticut must be apportioned by using the

of Connecticut.

business apportionment percentage (arrived at by completing

You are not considered to be carrying on business in Connecticut

Schedule B) or by using an approved alternative method.

if your business activities in Connecticut are considered casual,

Schedule B of Schedule CT-1040BA must be completed for this

isolated, or inconsequential. See Activities Considered Casual,

purpose and attached to Form CT-1040NR/PY. If you submit an

Isolated, or Inconsequential in the CT-1040NR/PY instruction

alternative method of apportionment, you must also complete

booklet.

Schedule CT-1040BA and include with it information explaining

the alternative method of apportionment.

Example 1: A plumber, who is a resident of Rhode Island,

carries on his business from an ofﬁ ce in Danielson, Connecticut.

The business apportionment percentage or alternative

He has maintenance contracts with housing authorities in the

method is not applied to income from the rental of real property

Worcester, Massachusetts, area that require him to regularly

or gains (losses) from the sale of real property. The entire rental

perform his services at various locations in and around

income from Connecticut real property or gain from the sale of

Worcester. This taxpayer is considered to be carrying on

the property is allocated to Connecticut and the entire amount of

business in Connecticut (by reason of his ofﬁ ce in this state)

any loss from the sale is allocated to Connecticut. Rental income

and in Massachusetts (because his business is conducted there

from real property located outside Connecticut or gain from the

with a fair measure of permanency and continuity).

sale of this property is allocated outside Connecticut. Any loss

connected with the property is allocated outside Connecticut.

Example 2: Assume the same facts as in Example 1 except

that the taxpayer carries on his business from an ofﬁ ce in

The business apportionment percentage is applied to

Auburn, Massachusetts, and has maintenance contracts with

business income (loss), farm income (loss), or to the income

housing authorities in northeast Connecticut that require him

from intangible personal property (such as annuities, dividends,

to regularly perform his services at various locations in and

interest, and gains from the disposition of intangible personal

around Connecticut. This taxpayer is considered to be carrying

property) if the property is used in or connected with a business

on business in Massachusetts (by reason of his ofﬁ ce there)

carried on both in and outside of Connecticut.

and in Connecticut (because his business is conducted here

with a fair measure of permanency and continuity).

If you carried on more than one business for which an

apportionment of business income is required on Schedule

Who Must Complete Schedule A

CT-1040BA, prepare a separate Schedule CT-1040BA for each

Any nonresidents who are required to allocate or apportion

business and attach all schedules to Form CT-1040NR/PY.

income because they carry on business both in and outside of

Connecticut must complete Schedule A.

Schedule A Instructions

If income is determined from books and records of the

In Column 1 and Column 2, list the exact locations both in and

business (allocation of income): If you carry on business both

outside of Connecticut where you carry on business. In Column 3,

in and outside of Connecticut and maintain books and records

describe the places listed in Column 1 and Column 2 (for example,

that satisfactorily disclose the portion of business income derived

branch office, agency, factory, warehouse, etc.) and state

from or connected with sources within Connecticut, check the

whether you rent or own these places.

box in the space immediately below Schedule A. Do not complete

Schedule B.

CT-1040BA (Rev. 01/13)

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Schedule Ct-1040ba - Nonresident Business Apportionment - 2012 Page 2

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