Is there more than one formula for apportioning franchise and excise tax?

Yes.  The apportionment formula will differ depending on the type of taxpayer and elections made.    There are four examples linked to the chart below.  The first example shows the standard apportionment calculation that is applied to both the franchise and excise tax base when no elections have been made.  The second example shows the apportionment calculation for the franchise tax base when consolidated net worth (CNW) applies and an affiliate (not the taxpayer) has elected the single sales factor (SSF).  The third example shows the franchise and excise tax apportionment calculations for a manufacturer that is a member of a CNW affiliated group and the manufacturer has made the SSF election.  The fourth example shows the franchise and excise apportionment calculations for a manufacturer that has made the SSF election but is not a member of an affiliated group electing CNW.

 

Taxpayer Type

Standard Apportion-ment

Taxpayer is a member of a CNW affiliated group

 and

 an affiliate elected SSF

Taxpayer is a member of a CNW affiliated group

and

taxpayer elected SSF

Taxpayer elected SSF

and

is not  a member of a CNW affiliated group

FAE 170

Apportionment Schedule

Examples

 

 

 

 

 

 

 

Any Type

X

 

 

 

Sch. N

#1 (attached)

Any Type

 

X

 

 

Sch170NC

#2 (attached)

Manufacturer electing SSF

 

 

X

 

Sch170NC, Sch. N

#3 (attached)

Manufacturer electing SSF

 

 

 

X

Sch. N

#4 (attached)

 

The above chart and examples do not discuss the apportionment formula used by financial institution affiliated group members or taxpayers that are common carriers, air carriers or air express carriers.

For more information, see Important Notice 17-11.

Not finding answers? Submit a request

Comments

Powered by Zendesk