There are two common apportionment methods for multi-state S corporation income tax returns filed to Arizona: standard apportionment and sales factor-only apportionment.
- Standard Apportionment: All non-air carrier taxpayers are allowed to use Arizona's standard apportionment formula, which double-weights the sales factor.
- Sales Factor-Only Apportionment: All non-air carrier taxpayers may use Arizona's sales factor-only apportionment formula, which is determined by dividing Arizona Sales by Everywhere Sales.
How Lacerte calculates state apportionment for AZ Form 120
Lacerte will automatically calculate state apportionment when you input the following:
- Go to Screen 52, Apportionment.
- In the St. Apportionment section on the left-hand side of the screen, select Arizona.
- In the field Automatic apportionment type 1=yes or 2=no [O].
- In the field Arizona apportionment, select 2=standard or 3=sales factor only [O].
- Multi-State Returns for the Partnership S-Corporate and Corporate Modules
- Allocating Balance Sheet Amounts to a State
- Understanding Allocation Versus Apportionment