Arizona Form 120s - S Corporation Income Tax Return

Arizona Form 120S

Line A3 - Standard Sales Factor

Line A5 - Average Apportionment Ratio

The term "sales" includes all gross receipts from transactions

Divide the total ratio, line A4, column C, by ten. Enter the

and activities in the course of the regular trade or business

average ratio here and on page 1, line 7. Express the ratio as a

that produce income.

decimal carried out to six places.

Determine sales within Arizona on a destination sales basis.

NOTE: If both the numerator and denominator of a factor

NOTE: Multiply the amount entered on line A3c, column A,

are zero, the taxpayer must exclude the factor from the

of Schedule A (total Arizona sales) by two (double weighted

apportionment ratio. Do not exclude a factor if the numerator

sales factor) on line A3d, column A. Enter the result on

is zero and the denominator is greater than zero. If the

line A3e, column A. Do not double the amount on line A3c,

property or payroll factor is excluded, determine the average

column B, when carrying it down to line A3e, column B, of

ratio (line A5, column C) by dividing the total ratio by nine. If

Schedule A (everywhere sales of the S corporation).

the sales factor is excluded, determine the average ratio by

dividing the total ratio by two. If two of the factors are

The sales factor on line A3e, column C, may, in certain

excluded, the remaining factor, without respect to any

circumstances, exceed 100 percent. However, since the total

weighting, is the apportionment ratio.

ratio (line A4, column C) is divided by four, the average ratio

(line A5, column C) will not exceed 100 percent.

Schedule B - Other Information

Line A5 - Average Apportionment Ratio

Answer all questions (B1 through B6) as accurately and

Divide the total ratio, line A4, column C, by four. Enter the

completely as possible.

average ratio here and on page 1, line 7. Express the ratio as a

Question B3: List the name, title and telephone number of

decimal carried out to six places.

the individual who Arizona Department of Revenue

NOTE: If both the numerator and denominator of a factor

employees may contact to schedule an audit of this return.

are zero, the taxpayer must exclude the factor from the

Confidential information may be disclosed to a principal

apportionment ratio. Do not exclude a factor if the numerator

officer, any person designated by a principal officer, any

is zero and the denominator is greater than zero. If the

person designated in a resolution by the corporate board of

property or payroll factor is excluded, determine the average

directors or other similar governing body, or to an individual

ratio (line A5, column C) by dividing the total ratio by three.

designated as an authorized representative in a valid power of

If the sales factor is excluded, determine the average ratio by

attorney. A principal corporate officer of a parent corporation

dividing the total ratio by two. If two of the factors are

may execute a written authorization for a controlled

excluded, the remaining factor, without respect to any

subsidiary. If this individual is not a principal officer, or is

weighting, is the apportionment ratio.

not designated as an authorized representative in a valid

power of attorney, the taxpayer understands and agrees that

Enhanced Sales Factor

confidential information may be disclosed to this individual.

Check the box for information question A on page 1 to

ADMINISTRATIVE RELIEF REQUESTS

indicate that the enhanced sales factor formula will be used to

A.R.S. § 43-1148 provides administrative relief if the

calculate the apportionment ratio on the S corporation’s

allocation and apportionment provisions of UDITPA do not

return. Use the number located on the right-hand side of

fairly represent the extent of the taxpayer's business activity

line A3d, column A, to weight the sales factor at eight times.

in Arizona. The taxpayer may petition for an alternative

Line A3 - Enhanced Sales Factor

method of computing its income attributable to Arizona, or

the department may require an alternative method.

The term "sales" includes all gross receipts from transactions

and activities in the course of the regular trade or business

A departure from the allocation and apportionment provisions

that produce income.

is allowed only in limited cases. Taxpayers seeking such

relief should submit a letter to the Corporate Income Tax

Determine sales within Arizona on a destination sales basis.

Audit Section 60 days prior to the filing of the return setting

NOTE: Multiply the amount entered on line A3c, column A,

forth the relief that is requested and the justification for the

of Schedule A (the total Arizona sales) by eight (enhanced

relief.

sales factor) on line A3d, column A. Enter the result on line

Certification

A3e, column A. Do not multiply the amount on line A3c,

column B, by eight when carrying the number down to

One or more of the following officers (president, treasurer, or

line A3e, column B, of Schedule A (the everywhere sales of

any other principal officer) must sign the return.

the S corporation).

Paid preparers: Sign and date the return. Complete the firm

The sales factor on line A3e, column C, may, in certain

name and address lines (the paid preparer’s name and

circumstances, exceed 100 percent. However, since the total

address, if self-employed). Enter the paid preparer’s TIN,

ratio (line A4, column C) is divided by ten, the average ratio

which is the firm’s EIN or the individual paid preparer’s

(line A5, column C) will not exceed 100 percent.

social security number.

Arizona Form 120s - S Corporation Income Tax Return - 2013 Page 9

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