Form Tc-20 - Utah Corporation Franchise Or Income Tax Return Instructions - 2011 Page 22
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25Schedule J – Apportionment Schedule
Instructions
Use TC-20, Schedule J to calculate the portion of the
Income or loss from partnership or joint venture inter-
taxpayer’s income attributable to Utah, if the taxpayer
ests must be included in income and apportioned to
does business both within and outside of Utah.
Utah through application of the three-factor formula
consisting of property, payroll and sales.
Complete TC-20, Schedule J to determine the ap-
portionment fraction (decimal). The factors express
For apportionment purposes, the portion of partner-
a ratio for tangible property in Utah to total tangible
ship or joint venture property, payroll and sales to be
property everywhere, for wages and salaries in Utah to
included in the taxpayer’s property, payroll and sales
total wages and salaries everywhere, and for sales in
factors must be computed on the basis of the taxpayer’s
Utah to total sales everywhere. These factors or ratios
ownership interest in the partnership or joint venture.
are used to arrive at the Utah apportionment fraction
Business Activity
calculated to six decimals. This fraction (decimal) is
Briefl y describe the nature and location(s) of your Utah
then applied to the apportionable income (or loss) on
business activities in the space provided at the top of
Schedule A to arrive at the amount of income (or loss)
apportioned to Utah. In cases where one or more of the
this schedule.
factors is omitted due to peculiar aspects of the busi-
Lines 1a - 1f – Property Factor
ness operations, use the number of factors present to
Show the average cost value during the taxable year
determine the Utah apportionment fraction.
of real and tangible personal property used in the busi-
ness within Utah (including leased property) in column
Sales Factor Weighted
A and overall (including Utah) in column B.
Taxpayers
Property owned by the taxpayer is valued at its original
cost. Property rented by the taxpayer is valued at eight
For tax years beginning after 2010, every multistate
times the net annual rental rate. Net annual rental rate
taxpayer must determine if they are a Sales Factor
is the annual rental rate paid by the taxpayer less the
Weighted Taxpayer. A sales factor weighted taxpayer
annual rate received by the taxpayer from sub-rentals.
is a taxpayer having greater than 50 percent of total
sales everywhere generated by economic activities
The average value of property must be determined by
performed by the taxpayer, and classifi ed in a NAICS
averaging the cost values at the beginning and end of
code of the 2002 or 2007 North American Industry
the tax period. However, monthly values may be used
Classifi cation System, except for a NAICS code within:
or required if monthly averaging more clearly refl ects
the average value of the taxpayer’s property.
• Section 21, Mining;
A supporting schedule should be attached whenever
• Section 31-33, Manufacturing;
monthly averaging is used.
• Section 48-49, Transportation and Warehousing;
Enter totals of lines 1a through 1e in the respective
• Section 51, Information (except for Subsector 519,
columns on line 1f.
Other Information Services); or
Line 2 – Property Factor Calculation
• Section 52, Finance and Insurance.
Determine the property factor (decimal) by dividing line
A taxpayer who is a partner in a partnership must
1f column A by line 1f column B.
include their pro rata share of the partnership’s sales
in determining whether they meet the “50 percent of
Line 3 – Payroll Factor
total sales everywhere” requirement above.
Wages, salaries, commissions and other includable
compensation paid to employees for personal services
For water’s edge and worldwide combined unitary
must be included in the Utah factor to the extent the
groups, the group is a sales factor weighted taxpayer if
services, for which the compensation was paid, were
greater than 50 percent of the total sales everywhere of
rendered in Utah.
the unitary group are classifi ed in NAICS codes except
those codes listed above.
Compensation is paid in Utah if:
A taxpayer who is a sales factor weighted taxpayer
1. the individual’s service is performed entirely within
must calculate the apportionment fraction under Part
Utah;
3, lines 14 through 16.
2. the individual’s service is performed both within and
outside Utah, but the service performed outside
Other Multistate Taxpayers
Utah is incidental to the individual’s service within
Utah; or
For multistate taxpayers that are not sales factor
weighted taxpayers, an election may be made to double
3. some of the service is performed in Utah and:
weight the sales factor in the apportionment calculation.
The election is made by entering an “X” on line 10 and
completing lines 11 through 13 on Schedule J.
Page 20
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