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Arizona Form 120X

Enhanced Sales Factor

Schedule C – Apportionment Formula

(Non-Air Carrier Multistate Taxpayers Only)

Line C3(e) -

Schedule C must be completed only if the 2011 Form 120X is

NOTE: Multiply the amount entered on line C3(c), column A,

filed to amend the apportionment ratio (if the taxpayer was

the total Arizona sales, by eight on line C3(d), column A.

required to use Schedule C). If the apportionment ratio is not

Enter the result on line C3(e), column A. Do not multiply the

being amended, enter the apportionment ratio from the 2011 Form

amount entered on line C3(c), column B, the everywhere

120 or as adjusted by any prior audit or amended return,

sales of the taxpayer, by eight.

whichever is latest, on the Form 120X, page 1, line 9, in column

(a) and column (c).

EXAMPLE: The taxpayer has total Arizona sales of $100,000

ARS § 43-1139 (Allocation of business income) provides that the

and total everywhere sales of $1,000,000. On line C3(e), column A,

apportionment ratio is a fraction. For taxable years beginning from

enter $800,000 of Arizona sales. On line C3(e), column B, enter

and after December 31, 2006, non-air carrier taxpayers may

$1,000,000 of everywhere sales for the taxpayer.

choose between the standard sales factor formula and the

The sales factor ratio in column C of line C3(e) may, in

enhanced sales factor formula. For the standard sales factor

certain circumstances, exceed 100 percent. However, since

formula, the numerator of the fraction is the property factor, plus

the total ratio (line C4) is divided by ten, the average ratio

the payroll factor, plus two times the sales factor. The

denominator of the fraction is four. For tax years beginning from

(line C5) will not exceed 100 percent.

and after December 31, 2008, the numerator of the fraction of the

Line C5 - Average Apportionment Ratio

enhanced sales factor formula is the property factor, plus the

payroll factor, plus eight times the sales factor. The denominator

Divide the total ratio, line C4, column C, by ten. Enter the

of the fraction is ten.

average ratio amount here and on page 1, line 9, column (c).

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

Determine sales within Arizona on a destination sales basis.

NOTE: When computing the factors of the apportionment ratio,

NOTE: The taxpayer must exclude a factor if both the

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

numerator and the denominator of a factor are zero. Do not

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

exclude a factor from the total ratio (line C4, column C) if

For more detailed instructions with respect to the Standard

the numerator of a factor is zero and the denominator of a

Sales Factor or the Enhanced Sales Factor, see the

factor is greater than zero. If the property or payroll factor is

instructions for 2011 Form 120.

excluded, determine the average ratio (line C5, column C) by

dividing the total ratio by nine. If the sales factor is excluded,

Standard Sales Factor

determine the average ratio by dividing the total ratio by two.

Line C3(e) -

If two of the factors are excluded, the remaining factor,

NOTE: Multiply the amount entered on line C3(c), column

without respect to any weighting, is the apportionment ratio.

A, the total Arizona sales, by two (double weighted sales

Schedule D – Schedule of Payments

factor) on line C3(d), column A. Enter the result on line

C3(e), column A. Do not double the amount entered on line

List the payment sent with the original return and all payments

C3(c), column B, the everywhere sales of the taxpayer.

made by the taxpayer after the original return was filed.

EXAMPLE: The taxpayer has total Arizona sales of $100,000 and

If additional space is required to list all of the payments,

total everywhere sales of $1,000,000. On line C3(e), column A,

prepare a schedule (in the same format) labeled “Schedule D

enter $200,000 of Arizona sales. On line C3(e), column B, enter

$1,000,000 of everywhere sales for the taxpayer.

– Schedule of Payments” and attach the schedule to Form

120X.

The sales factor ratio in column C of line C3(e) may, in

certain circumstances, exceed 100 percent. However, since

DO NOT include the claim of right credit computed under

the total ratio (line C4) is divided by four, the average ratio

ARS § 43-1130.01 in this schedule.

(line C5) will not exceed 100 percent.

DO NOT include amounts paid for penalties and interest or

Line C5 - Average Apportionment Ratio

payments reported on page 1, line 26.

Divide the total ratio, line C4, column C, by four. Enter the

Enter the total on Schedule D, line 4, and on page 1, line 27.

average ratio amount here and on page 1, line 9, column (c).

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

Schedule E – Explanation of Changes

NOTE: The taxpayer must exclude a factor if both the numerator

and the denominator of a factor are zero. Do not exclude a factor

Explain the changes made in this return. If additional space is

from the total ratio (line C4, column C) if the numerator of a

needed, prepare a schedule (in the same format) labeled

factor is zero and the denominator of a factor is greater than

“Schedule E – Explanation of Changes” and attach the schedule

zero. If the property or payroll factor is excluded, determine the

to the Form 120X. Include any necessary supporting

average ratio (line C5, column C) by dividing the total ratio by

documentation with the return.

three. If the sales factor is excluded, determine the average ratio

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

excluded, the remaining factor, without respect to any

weighting, is the apportionment ratio.

Instructions For Arizona Form 120x - Arizona Amended Corporation Income Tax Return - 2011 Page 6

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