Form 1120b-Me - Maine Franchise Tax Return For Financial Institutions

SCHEDULE A - INSTRUCTIONS

APPORTIONMENT OF INCOME

(See 36 MRSA § 5206-E)

GENERAL INSTRUCTIONS

SPECIFIC INSTRUCTIONS

Schedule A is for ﬁ nancial institutions that are taxable both in

Line 8. Receipts Factor:

The receipts factor is a fraction.

and outside Maine. To the extent that a ﬁ nancial institution

The numerator is the Maine receipts of the taxpayer

derives its income from a unitary business carried on by two

during the tax period. The denominator is the receipts of

or more members of an afﬁ liated group, Maine net income

the taxpayer everywhere in the U.S. during the tax period.

and Maine assets are determined by apportioning that part of

See § 5206-E(2) for a complete description of Maine and

the net income and assets of the entire group that is derived

everywhere receipts.

from the unitary business.

Line 9. Payroll Factor:

The payroll factor is a fraction. The

Maine employs a three-factor formula to determine income

numerator is the total amount of compensation paid in Maine

and assets apportioned to Maine. However, one or more

or paid to Maine-based and Maine resident employees

factors may be excluded from the apportionment formula

during the tax period, and the denominator is the total

under certain circumstances. If a factor is excludable from

compensation paid everywhere in the U.S. by the taxpayer

the apportionment formula, the weighting of the remaining

during the tax period to all employees working in the U.S.

factors must be changed.

See § 5206-E(4) for a complete description of Maine and

everywhere payroll.

A factor is excludable only if both the numerator and

denominator are zero,* but is not excludable merely because

Line 10. Property Factor:

The property factor is a fraction.

the numerator is zero. When excluding the receipts factor,

The numerator is the average value of the taxpayer’s owned

change the weight of the payroll and property factors to 50%

or rented real and tangible personal property located in

(0.5) each. When excluding either the payroll or property

Maine plus loans and credit card receivables located in Maine

factor, change the weight of the receipts factor to 66.67%

during the tax period, and the denominator is the average

(0.6667) and the weight of the remaining factor (payroll or

value of such property everywhere in the U.S. during the tax

property) to 33.33% (0.3333). If two factors are excludable

period.

from the apportionment formula, change the weight of

Property rented by the taxpayer is valued at eight times the

the remaining factor to 100%. If you are excluding any

net annual rental rate. Loans and credit card receivables are

factors, attach a schedule detailing the factors used and the

valued at outstanding principal, without regard to any reserve

apportionment computation. If the total of 8(C), 9(C) and

for bad debt. See § 5206-E(3) for a complete description of

10(C) does not equal the amount you enter on line 11, your

Maine and everywhere property.

tax liability will not compute accurately.

* For example, if the business does not own or lease property anywhere in the United States, the property factor may

be eliminated.

Form 1120b-Me - Maine Franchise Tax Return For Financial Institutions - 2012 Page 4

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