Arizona Form 120s - S Corporation Income Tax Return

Arizona Form 120S

Amended Returns: The taxpayer may apply part or all of an

Line A1 - Property Factor

overpayment reported on line 28 as a 2014 estimated tax

The value of tangible personal property and real property

payment, if this amended return is filed during the taxpayer’s

owned by the taxpayer is its original cost. The taxpayer

taxable year 2014. Enter the applicable amount on line 29.

normally determines the average value of its owned property

by averaging the values at the beginning and ending of the

Line 30 - Refund

tax period.

Subtract line 29 from line 28. Enter the difference. This is the

The value of tangible personal property and real property

net refund amount.

rented by the taxpayer is eight times its net annual rental rate,

Schedule ACA - Air Carrier Apportionment

less the aggregate annual subrental rates paid by subtenants

of the taxpayer.

Formula

Report real property situated and tangible personal property

(Multistate S Corporation Air Carriers Only)

permanently located in Arizona, if connected with the

A.R.S. §§ 43-1131 through 43-1150 govern the apportionment

business, as property within Arizona. Allocate the value of

of income. An S corporation that engages in activities both

mobile property to Arizona based on the total time that the

within and without Arizona must apportion its business

property was within Arizona.

income.

Compute the property factor on line A1c by dividing column

A.R.S. § 43-1139(B) requires a taxpayer that is a qualifying

A by column B, and entering the resulting ratio in column C.

air carrier to use revenue miles to apportion its business

Express the ratio as a decimal carried out to six places. The

income to Arizona. The taxpayer must be engaged in air

property factor on line A1c, column C, will never exceed 100

commerce. “Air commerce” means transporting persons or

percent.

property for hire by aircraft in interstate, intrastate or

Line A2 - Payroll Factor

international transportation. The taxpayer must complete

Report salaries, wages, or other compensation of officers,

Schedule ACA. Schedule ACA is available on the internet at:

employees, etc. as within Arizona, if performance of the services

Check the box

occurs here. This rule applies regardless of where payment is

for information question A on page 1. Do not complete

made or control exercised. This rule also applies regardless of

Schedule A.

whether the performance of the services is partly or wholly in

Schedule A - Apportionment Formula

connection with the apportionable business carried on outside

(Non-Air Carrier Multistate S Corporations Only)

the state or in interstate or foreign commerce.

Allocate the compensation of officers and employees who

A.R.S. §§ 43-1131 through 43-1150 govern the apportionment

perform services partly within and partly without Arizona to

of income. An S corporation that engages in activities both

this state when:

within and without Arizona must apportion its business

 The services performed outside of Arizona are incidental

income. The S corporation (other than a multistate air carrier)

must base the apportionment on property, payroll, and sales in

to the employee's service within Arizona; or

 The employee's base of operation is in Arizona; or

Arizona as compared with everywhere. "Everywhere" means

the property, payroll, and sales factors related to the whole

 The employee has no base of operation in any state, but

unitary business.

the direction or control of the employee is from Arizona;

Non-air carrier multistate S corporations must choose one of

two

apportionment

formulae

for

calculating

the

 The employee has no base of operation in any state and

apportionment ratio. Non-air carrier multistate S corporations

there is no direction or control from a state in which the

may elect the enhanced sales factor formula. The standard

employee performs some part of his services, but the

sales factor formula must be used by non-air carrier

employee's residence is in Arizona.

multistate S corporations not electing to use the enhanced

Compute the payroll factor on line A2 by dividing column A by

sales factor formula.

column B and entering the resulting ratio in column C. Express the

The numerator of the fraction of the standard sales factor

ratio as a decimal carried out to six places. The payroll factor on

formula is the property factor plus the payroll factor plus two

line A2, column C, will never exceed 100 percent.

times the sales factor. The denominator of the fraction is four.

For tax years beginning from and after December 31, 2008, the

Detailed instructions for the standard sales factor begin

numerator of the fraction of the enhanced sales factor formula

below. If you have selected the enhanced sales factor

is the property factor plus the payroll factor plus eight times the

formula, skip to the section titled "Enhanced Sales Factor".

sales factor. The denominator of the fraction is ten.

Standard Sales Factor

Taxpayers using any of the aforementioned apportionment

Check the box for information question A on page 1 of the

methods shall complete lines 5 through 10 on page 1.

return to indicate that the standard double weighting of the

NOTE: When computing the factors of the apportionment ratio,

sales factor will be used to calculate the apportionment ratio

round amounts to the nearest whole dollar. If 50 cents or more,

on the S corporation’s return. Use the number located on the

round up to the next dollar. If less than 50 cents, round down.

left-hand side of Schedule A, line A3d, column A, to double

weight the sales factor.

Arizona Form 120s - S Corporation Income Tax Return - 2013 Page 8

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