Kansas S Corporation Income Tax Form
In the case of wanting to receive assistance in completing tax returns, the following form has to be completed and submitted.
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1 2a 2b 3 7 11 12 13 14 15 16 17 18 19 22 . . . . . . . . . . . . . . . . . . . . . . IF THIS IS AN AMENDED RETURN, MARK THIS BOX Individual or Firm Signature of Preparer Address and Phone Number Date Tax Preparer's EIN or SSN 4 5 6 8 9 10 20 21 A______ ________ B.Method Used to Determine Income of Corporation in Kansas G.State of Commercial Domicile Name ___ ___ ___ ___ / ___ ___ ___ ___ C.Business Activity Code (NAICS) TAXPAYER INFORMATION ___ ___ ___ ___ ___ ___ Mark this box if any taxpayer information has changed since the last return was filed. ___ ___ Enclose a copy of page 1 through 4 (page 5 if Partnership) of your federal return, Schedule M-1, Schedule M-2, and any federal schedules that support Kansas modifications. Also include an organizational chart showing all partnerships/S Corps and taxable entities. If additional information is needed, we will request it at a later date. J.Employer's Identification Number (EIN) ___ ___ ___ ___ ___ ___ ___ B______ ________ . C______ ________ . .. FOR OFFICE USE ONLY Mark this box if you submitted a Kansas Form K-120EL is filed. K. __ __ /__ __ /__ __ __ __ Signature of Officer Title Date 2012 155012 K-120S(Rev. 7/12) DO NOT STAPLE For the taxable year beginning ____ ___ /___ ___ /___ ___ ___ ___ ; ending ____ ___ /___ ___ /___ ___ ___ ___ 2012 KANSAS PARTNERSHIP or S CORPORATION INCOME I authorize the Director of Taxation or their designee to discuss my K-120S and enclosures with my preparer. ___ ___ / ___ ___ / ___ ___ ___ ___ Number and Street of Principal Office City State Zip CodeD.Date Business Began in KS (mm/dd/yyyy) ___ ___ / ___ ___ / ___ ___ ___ ___ E.Date Business Discontinued in KS (mm/dd/yyyy) Mark this box if a K-40C (Composite Sch.) is being filed to report income. ___ ___ ___ ___ ___ ___ ___ ___ ___ L. M.Enter the original federal due date if other than the 15th day of the 3rd month after the end of the tax year. A.This return is being filed for (check one): 1.PARTNERSHIP2.S CORPORATIONF.State and Month/Year of Incorporation (mm/yyyy) I.Mark this box if any tax credit schedules areenclosedwiththisreturn andenclose letter of authorization & schedule) 5.Qualified elective two-factor Year qualified: 1.Activity wholly within Kansas or single entity apportionment method 2.Combined income method (Enclose Schedule K-121S) 3.Common carrier mileage (Enclose mileage apportionment schedule) 4.Alternative or separate accounting (See instructions under "Definitions" MAIL TO: KANSAS S CORPORATION INCOME KANSAS DEPARTMENT OF REVENUE 915 SW HARRISON ST TOPEKA, KS 66699-4000 H.Enter number of shareholders/partners included in Part II __ __ __ __ I declare under the penalties of perjury that to the best of my knowledge this is a true, correct, and complete return. 1. OrdinaryincomefromfederalScheduleK............................................................................. 2a.TotalofallotherincomefromfederalScheduleK(seeinstructions)........................................................ 2b.TotalofallowabledeductionsfromfederalScheduleK(seeinstructions).................................................... 3. Totalfederalincome(addline1toline2aandsubtractline2b)............................................................ 4. Totalstateandmunicipalinterest(schedulerequired)....................................... 5. Taxes on or measured by income or fees or payments in lieu of income taxes (schedule required). . . . 6. Otheradditionstofederalincome(schedulerequired)....................................... 7. Totaladditionstofederalincome(addlines4,5&6).................................................................... 8. InterestonU.S.governmentobligations(schedulerequired).................................. 9. IRCSection78and80%offoreigndividends(schedulerequired)............................. 10. Othersubtractionsfromfederalincome(schedulerequired).................................. 11. Totalsubtractionsfromfederalincome(addlines8,9&10).............................................................. 12. Netincomebeforeapportionment(addline3toline7andsubtractline11).................................................. 13. Nonbusinessincome-Totalcompany(schedulerequired)............................................................... 14. Apportionablebusinessincome(subtractline13fromline12)............................................................. 15. AveragepercenttoKansas(PartIII,linesA,B,C&E).......... 16. AmounttoKansas(multiplyline14byline15)......................................................................... 17. Nonbusinessincome-Kansas(schedulerequired) ..................................................................... 18. Kansas expensing deduction (see instructions for Schedule K-120EX and enclose applicable schedules). . . . . . . . . . . . . . . . . . . . . . . . . . . 19. TotalKansasincome(addlines16&17,thensubtractline18)............................................................ 20. Estimated tax paid and amount credited forward (separate schedule) . . . . . . . . . . . . . . . . . . . . . . . . . . 21. Other tax payments (separate schedule). (Do notenter KW-7 or KW-7S withholding on this line). . . . . 22. Refund(addlines20&21)........................................................................................ (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) PART II - PARTNER'S OR SHAREHOLDER'S DISTRIBUTION OF INCOME This schedule is to be completed for all partners or shareholders. If you have nonresident partners or shareholders, complete Form KW-7S. If there are more than 12 partners or shareholders, you must complete a schedule similar to the schedule below and submit it with your return. Individual partners or shareholders complete columns 1 through 8. All other partners and shareholders complete columns 1 through 5. (2) Social Security Numberor Employer Identification Number (EIN) (3) Partner's or shareholder's percent of ownership (4) Partner's profit percent or shareholder's applicable percentage (1) Name and address of partner or shareholder Check box if nonresident PART I - ADDITIONAL INFORMATION Has your corporation been involved in any reorganization during the period covered by this return? _____ Yes _____ No If "yes", enclose a detailed explanation. 4. 2. Enter the address of the corporation's principal location in Kansas. 3. The corporation's books are in care of: Telephone Address NameRevenue Agent's Report Net Operating Loss Years ended 5. If your federal taxable income has been redetermined for any prior years that have not previously been reported to Kansas, check the applicable box(es) below and state the calendar, fiscal, or short period year ending date. You are required to submit,under separate cover, the federal forms or Revenue Agent's Report along with the Kansas amended return (Form K-120S). PART II (continued) See instructions for Nonresident Partner's or Shareholder's Computation of Columns 6, 7 and 8. Multiply the percentage in column 4 by line3,page1.Multiply the percentage in column 4 by line 12, page 1.See instructions. Enter result in Part A of Schedule S, Form K-40. (5) (6) (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l)(8) (7) Income from Kansas sources. Partner's or shareholder's portion of total Kansas income. Partner's or shareholder's portion of federal ordinary and other income (losses) and deductions.Partner's or shareholder's modification. Kansas resident individuals:Multiply column 4 by line 12, page 1. Nonresident individuals:If income is earned only from Kansas sources multiply column 4 by line 12, page 1. If earned from inside and outside of Kansas, multiply column 4 by line 19, page 1. All other partners or shareholders:Multiply column 4 by line 19. 1. Did the corporation file a Kansas income tax return under the same name for the preceding year? _____ Yes _____ No If "no" enter previous name and EIN: Amended Return PART III - APPORTIONMENT FORMULA K-120S AS For the taxable year beginning ____ ___ / ___ ___/___ ___ ___ ___ ; ending ____ ___ / ___ ___/___ ___ ___ ___ Depreciableassets............................ Land ....................................... Other tangible assets (Enclose schedule) . . ......... Less:Constructioninprogress................... Total property to be averaged . ................... Average owned property (Beginning + End 2). ..... (2) Net annual rented property. Multiplied by 8 ......... TOTAL PROPERTY (Enter on line 15, Block A, page 1) (1) Compensation of officers . . .................................................. (2) Wages, salaries and commissions............................................. (3) Payroll expense included in cost of goods sold . .................................. (4) Payroll expense included in repairs . ........................................... (5) Other wages and salaries.................................................... TOTAL PAYROLL (Enter on line 15, Block B, page 1) (If qualified and utilizing the elective two-factor formula,do notcarry this percentage to page 1) A. Property (1) Value of owned real and tangible personal property used in the business at original costWITHIN KANSAS Beginning of YearTOTAL COMPANY B End of YearBeginning of YearEnd of Year A % PERCENT WITHIN KANSAS Within KansasTotal Company % C (3) Dividends................................................................ B. Payroll (Those corporations qualified and utilizing the elective two-factor formula must complete this area only during the first year of qualifying) % (b) Purchasers in a state where the taxpayer would not be taxable (e.g., under federal (a) ShippedfromoutsideKansas.............................................. D(1) D(2) E D(1). Totalpercent(SumoflinesA,B&Cifutilizingthree-factorformula)............................................. .... D(2). Totalpercent(SumoflinesA&Cifqualifiedandutilizingtwo-factorformula).......................................... E. Average percent of either D(1) or D(2), whichever is applicable (Enter on line 15, page 1) ................................% % % Interest.................................................................. C. Sales(Grossreceipts,lessreturnsandallowances)................................... (1) Sales delivered or shipped to purchasers in Kansas: (b) ShippedfromwithinKansas............................................... (2) Sales shipped from Kansas to: (a) TheUnitedStatesGovernment............................................ Public Law 86-272) .................................. ................... Gross proceeds from tangible asset sales ....................................... Royalties................................................................. Gains/losses from intangible asset sales . ....................................... Other income (Enclose schedule).............................................. TOTAL SALES (Enter on line 15, Block C, page 1)Rents................................................................... Inventory.................................... . . FOR USE BY CORPORATIONS APPORTIONING INCOME (Corporations using the combined income method must use Schedule K-121S) KANSAS Corporation Apportionment Schedule Name as shown on Form K-120SEmployer Identification Number (EIN) 2012 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. PART IV - KANSAS PASS-THROUGH SCHEDULE The distributions from the entities listed below have been passed-through and are included in your entity. Entity Address (Number and Street, City, State, Zip)EINPrincipal Product or Services Entity Name 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. PART V - KANSAS QSUB / DISREGARDED ENTITY SCHEDULE The QSub or Disregarded entities listed below are included in this return. Entity Address (Number and Street, City, State, Zip)EINPrincipal Product or Services QSub or Disregarded Entity NameKansas Operations (Y / N) Kansas Operations (Y / N) Page 1 webtax.org P artnership or S C orporation T ax 2012 File your business taxes electronically! Our electronic filing methods are simple, safe, and convenient – and the quickest way to receive a refund. See back cover for details. IN THIS BOOKLET WHAT’S NEW General Information .................................... 2 Line Instructions (K-120S) ........................... 6 Line Instructions (K-120S AS) ...................... 9 Form K-120S ................................................ 12 Form K-120S AS ........................................... 14 Form K-121S ................................................ 16 Taxpayer Assistance ....................... Back Cover Electronic Filing ............................. Back Cover KANSAS EXPENSING DEDUCTION. This new deduction is available to all Kansas businesses for certain qualifying machinery and equipment, as well as canned computer software, placed into service in Kansas starting in tax year 2012. The deduction is allowed for machinery and equipment purchased in the year that it is placed in service in Kansas. The expensing deduction must qualify with the IRS under IR C Section 168: M odified accelerated cost r ecover y system (MA CRS). For more information, see the instructions for Schedule K-120EX. GENERAL INFORMATION If any due date falls on a Saturday, Sunday, or legal holiday, substitute the next regular workday. Who Must A Kansas corporation return must be filed by all corporations doing busi\ ness within or deriving income from sources within Kansas who are required to file a federal income tax retu\ rn, whether or not a tax is due. File a Corporations which elect under subchapter S of the Internal Revenue Code\ not to be taxed as a corporation must Return file a Kansas Partnership or S Corporation Return (Form K-120S). All other corporations must file a Form K-120. Banks and savings and loan associations allowed to file as small busines\ s corporations at the federal level are not allowed to file as small business corporations at the Kansas level. Thos\ e entities are required to file a Privilege Tax return (K-130) to report any income or loss. The federal level shareholders income or loss which is included in their individual federal income tax return is to be subtract\ ed from federal adjusted gross income so as to not allow that income. A partnership return (Form K-120S) must be completed by any business p\ artnership, syndicate, pool, joint venture or other such joint enterprise to report income from operations.\ The Kansas partnership return must be completed by every enterprise that has income or loss derived from Kansa\ s sources regardless of the amount of income or loss. Income or loss derived from Kansas sources includes income or loss attributed to: „ Accounting A taxpayer’s taxable year is the same as the taxable year for federal\ tax purposes. If a taxpayer’s taxable year is changed, or the method of accounting is changed for federal tax \ purposes, then the taxable year and Period method of accounting shall be similarly changed for Kansas tax purposes.\ Federal Return and Other Enclosures Enclose with Form K-120S: „„ „„ „ Amended Returns (continued) adjusted or disallowed, you must provide the department with a copy of the adjustment or denial letter. If you did not file a Kansas return when you filed your original federal\ return, and the federal return has since been amended or adjusted, use the information on the amended or adjusted\ federal return to complete your original Kansas return. A copy of both the original and amended federal returns should be enclose\ d with the Kansas return along with an explanation of the changes. FEDERAL AUDIT: Any taxpayer whose income has been adjusted by the Internal Revenue Service must\ file an amended return with Kansas and include a copy of the Revenue Agent’s Report or adjustment letter showing and explaining the adjustments. These adjustments must be submitted with\ in 180 days of the date the federal adjustments are paid, agreed to, or become final, whichever is earlier. Failure by the taxpayer to notify KDOR within the 180 day period shall not bar KDOR from assessing additional t\ axes or proceeding in court to collect such taxes. Failure by the taxpayer to comply with the requirements for \ filing returns shall toll the periods of limitation for KDOR to assess or collect taxes. Capital Any adjustment, provided by Kansas law, which applies to a capital gain received by the partnership or corporation and reported by the individual partners or shareholders on t\ heir individual federal income tax return, Gains is to be made by each partner or shareholder on his Kansas individual in\ come tax return. If, during the taxable year, the partnership or corporation received a gain from the sale of property or o\ ther capital assets for which the tax basis for Kansas is higher than the tax\ basis for federal, each partner or shareholder must be notified of his share of the difference in basis and\ whether the gain qualified as a long or short term capital gain. Any partnership or corporation which has a partner or shareholder who is\ a nonresident of Kansas must advise such partner of those capital gains and losses incurred from asse\ ts located in Kansas because the nonresident partner or shareholder is subject to tax on gains realized f\ rom the sale or exchange of property located in Kansas. If such computations result in a net capital loss to Kansas, the loss is\ limited to $3,000 ($1,500 for married individuals filing separate returns) on the partner’s or shareholder\ ’s Kansas individual income tax return. Capital transactions from Kansas sources to which the above instructions\ apply include: a) Capital gains or losses derived from real or personal property having an actual situs wit\ hin Kansas whether or not connected with the trade or business; b) capital gains or losses from stocks, bonds and other intangible propert\ y used in or connected with a business, trade or occupation that is carried on wit\ hin Kansas; and, c) respective portion of the partnership or corporate capital gain or loss from a partnership \ or corporation of which the partnership or shareholder is a member, partner or shareholder, or an estate or trust of which the partnership or corporation is a beneficiary. See instructions for Part III - Apportionment Formula. Nonresident Owner Withholding Partnerships, S corporations and limited liability companies with nonres\ ident owners are required to withhold Kansas income tax at the rate of 6.45% on the Kansas taxable income (wh\ ether distributed or undistributed) of their nonresident partners, members or shareholders. Pass-through entiti\ es with nonresident owners must complete Form KW-7/KW-7S and pay the withheld funds on or before the due\ date of the income tax return for the pass-through entity, including extensions. These forms and additional information about this requirement are available from our web site at ksrevenue.org. Business Income. For tax years commencing after December 31, 2007, “business income”\ means: 1) Definitions Income arising from transactions and activity in the regular course of t\ he taxpayer’s trade or business; 2) income arising from transactions and activity involving tangible and int\ angible property or assets used in the operation of the taxpayer’s trade or business; or 3) income of the t\ axpayer that may be apportioned to this state under the provisions of the Constitution of the United States and laws thereof, except that a taxpayer may elect that all income constitutes business income. Business income is apportioned to Kansas generally using the average of the three factors of property, payroll, and sales. For instance, business income received from another partnership is included in your apportionable income and your share of t\ hat partnership is multiplied times the property, payroll and sales both in Kansas and everywhere of that partnership to add to your entity’s property, payroll and sales both in Kansas and everywhere. The apportionable incom\ e is then multiplied by the resulting factor. Any deviation from using the three factor method requires alternative qu\ alifications. All the apportionment methods are listed in this section. Definitions (continued) All small business corporations filing a combined return (single or multiple) must complete lines 1 through 19 of Form K-120S using the total combined income column from Schedule K-121S. Activity Wholly Within Kansas. If a particular trade or business is carried on exclusively within Kansa\ s or if the activities outside of Kansas are such that federal Public Law 86-272 prohibits another state from imposing a tax, then the entire net income is subject to the Kansas Income Tax. If two or more corporations file Federal Income Tax returns on a consolidated basis, and if each of such corporations der\ ive all of their income and expenses from sources within Kansas, they must file a consolidated retur\ n for Kansas Income Tax purposes. Single Entity Apportionment Method. Any taxpayer having income from business activity which is taxable both within and without this state, other than activity as a financial o\ rganization or the rendering of purely personal services by an individual, shall allocate and apportion net inc\ ome as provided in the Uniform Division of Income for Tax Purposes Act. Combined Income Method—Single Corporate Filing. When a group of corporations conduct a unitary business both within and outside of Kansas, the source of income shall be determi\ ned by the “combined income approach.” This approach is the computation by formula apportionment of the busines\ s income of a unitary trade or business properly reportable to Kansas by members of a unitary group. The property, payroll, or sales factor for each member of a unitary business shall be determined by dividing the property, payroll, or sales figure for Kansas by the total property, payroll, or sales figure of the entire group. The average is multiplied by the income of the unitary group to determine the income of the company derived from\ sources in Kansas. The Kansas S Corporation return filed on the combined income approach mu\ st include Schedule K-121S, which can be found in this booklet. Any small business corporation which files a consolidated return for fed\ eral purposes and a combined report for Kansas purposes must submit a copy of the consolidated federa\ l Form 1120S and all other schedules and statements necessary to support the federal ordinary income reported\ on the Kansas return. Schedule K-121S must be used to determine income of the small business corporatio\ n. Schedule K-121S single entity Kansas income is then shown on line 19, Form K-120S. Combined Income Method—Multiple Corporation Filing. This method is the same as “Combined Income Method—Single Corporation Filing” except that any corporation fili\ ng using the combined income method with more than one entity doing business in Kansas may file the Kansas return\ reporting the total combined income on that return. Schedule K-121S must be used to determine the Kansas tax\ able income of each separate corporation. Schedule K-121S combined Kansas income is then entered on line 19 of Form K-120S. Qualified Elective Two-Factor Method. This method may be used by any taxpayer who qualifies and elects to utilize the two-factor formula of property and sales. A qualified taxpayer is any taxpayer whose payroll factor for a taxable year exceeds 200% of the average of the property factor and the s\ ales factor. An election must be made by including a statement with the original tax return indicating the tax\ payer elects to utilize this apportionment method. It will be effective and irrevocable for the taxable year of the\ election and the following nine taxable years. Common Carrier Method. All business income of railroads and interstate motor carriers of persons or property for-hire shall be apportioned to this state on the basis of mil\ eage. For railroads, multiply the business income by a fraction, the numerator of which is the freight car miles in\ this state and the denominator of which is the freight car miles everywhere. For interstate motor carriers, mult\ iply the business income by a fraction, the numerator of which is the total number of miles operated in this state a\ nd the denominator of which is the total number of miles operated everywhere. Alternative Accounting Method. If the uniform allocation and apportionment provisions do not represent \ fairly the extent of the taxpayer’s business activity in this state, the taxpayer may petition for, or the Secretary of Revenue may require, in respect to all or any part of the taxpayer’s business activity, if reasonable: (a) Separate accounting; (b) the exclusion of one or more of the factors; (c) the\ inclusion of one or more additional factors; or LINE INSTRUCTIONS FOR FORM K-120S, PAGE 1 TAXPAYER INFORMATION Beginning and Ending Dates: Enter beginning and ending dates of the tax year, even if it is a calendar year. Name and Address: PRINT or TYPE the name and address of the entity. EIN: Enter the federal Employer’s Identification Number. Information for Items A through M: Complete all requested information. LINE 14—APPORTIONABLE BUSINESS INCOME: Subtract line 13 from line 12 and enter the result on line 14. LINE 15—AVERAGE PERCENT TO KANSAS: Enter the applicable percentages in spaces A, B, and C of line 15. If you are qualified and utilizing the elective two-factor formula, do not enter a percentage in space B. Enter on line 15 the average percent from Form K-120S AS, Part III, line E. Important––Round the percent to the fourth decimal point. If your business is wholly within Kansas enter 100.0000. LINE 16—AMOUNT TO KANSAS: Multiply line 14 by line 15 and enter the result on line 16. LINE 17—NONBUSINESS INCOME-KANSAS: Enter the total amount of nonbusiness net income directly allocated to Kansas. Submit a schedule to support the amount shown. LINE 18—KANSAS EXPENSING DEDUCTION: Enter the amount of your Kansas expensing deduction from Schedule K-120EX and enclose a copy of your completed K-120EX and federal Form(s) 4562. Also enclose any schedule necessary to enable KDOR to reconcile the federal Form 4562 amounts to the expensing claimed on the K-120EX. LINE 19—TOTAL KANSAS INCOME: If you are filing a combined report (Schedule K-121S) or you are authorized to file using the alternative or separate accounting method, enter on line 19 the: 1) Kansas income from line 19 of Schedule K-121S; or, 2) Kansas income from a separate schedule prepared by you (Separate/ Alternative Method of Reporting). LINE 20—ESTIMATED TAX PAID AND AMOUNT CREDITED FORWARD: If you filed a Form K-120 last year, enter the total of your 2012 estimated tax payments plus any 2011 overpayment you had credited forward to 2012. LINE 21—OTHER TAX PAYMENTS: Enter on line 21 any amount of prepaid tax not entered above. Do NOT enter KW-7 or KW-7S withholding on this line. LINE 22—REFUND: Add lines 20 and 21 and enter the result on line 22. Amounts less than $5.00 will not be refunded. SIGNATURE AND VERIFICATION: The return must be signed and sworn to by a member, partner, president, vice-president, or other principal officer. If the return is prepared by a firm or corporation, the return should be signed in the name of the firm or corporation. Any person or persons who prepare the return for compensation must also sign the return and provide their EIN (Employer Identification Number) or SSN (Social Security Number). LINE INSTRUCTIONS FOR FORM K-120S, PAGE 2 PART I—ADDITIONAL INFORMATION All entities must answer all questions in Part I. PART II—PARTNER’S OR SHAREHOLDER’S DISTRIBUTION OF INCOME Part II must be completed for all partners or shareholders. COLUMN 1 —Name and address of partner or shareholder. List the name and permanent address of each person who was a partner of the partnership or shareholder of the corporation during the taxable year. Check the box on the right side of column 1 if the respective partner or shareholder was a nonresident of Kansas during the year. COLUMN 2—Social Security Number (SSN) or Employer Identification Number (EIN). Enter in column 2 the SSN or EIN of each partner or shareholder listed. COLUMN 3 —Partner’s or Shareholder’s Percent of Ownership. Enter in column 3 the partner’s or shareholder’s percent of ownership in the partnership or corporation. COLUMN 4 —Partner’s Profit Percent or Shareholder’s Applicable Percentage. Enter in column 4 the partner’s profit percentage or shareholder’s applicable percentage. COLUMN 5 —Income from Kansas sources. Kansas Resident Individuals: Multiply column 4 by line 12, page 1. Nonresidents Individuals: If income is earned only from Kansas sources multiply column 4 by line 12, page 1. If income is earned from inside and outside of Kansas, multiply column 4 by line 19, page 1 . All Other Partners or Shareholders: Multiply column 4 by line 19, page 1. Enclose a schedule showing adjustments due to any guaranteed payments. COLUMN 6 —Partner’s or Shareholder’s portion of federal ordinary and other income (losses) and deductions. Multiply the partner’s profit percent or applicable shareholder’s percentage in column 4 by line 3, page 1. Page 8 COLUMN 7 —Partner’s or Shareholder’s portion of total Kansas income. Multiply the partner’s or shareholder’s percentage in column 4 by line 12, page 1. COLUMN 8 —Partner’s or Shareholder’s modification. Subtract column 7 from column 6 and enter the result in column INSTRUCTIONS FOR FORM K-120S AS You must complete and enclose Part III, of Form 120S AS with your Kansas return if the taxpayer is doing business within and outside of Kansas and utilizing the apportionment formula to determine Kansas income. PART III—APPORTIONMENT FORMULA Part III is to be used by corporations which derive income from sources both within and without Kansas for the purpose of allocating and apportioning income. All business income is apportionable to Kansas by one of the following methods: Compensation is paid in Kansas if any one of the following tests, applied consecutively, are met: (a) The employee’s service is performed entirely within Kansas; (b) The employee’s service is performed both inside and outside of Kansas, but the service performed without this State is “incidental” to the employee’s service in Kansas (the word “incidental” means any service which \ is temporary or transitory in nature, or which is rendered in connection with an isolated transaction); (c) If the employee’s services are performed both inside and outside of Kansas, the employee’s compensation will be attributed to Kansas if: (1) the employee’s base of operations is in Kansas; or (2) there is no base of operations in any state in which some part of the service is performed, but the place from which the service is directed or controlled is in Kansas; or (3) the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the employee’s residence is in Kansas. The term “base of operation” is the place \ from where employees begin work and to which they customarily return in order to receive instructions from the taxpayer or communications from his customers or other persons, or to replenish stock or other materials, repair equipment, or perform any other functions necessary to the exercise of their trade or profession at some other point or points. LINE C—Sales Factor. For purposes of the sales factor of the apportionment formula, the term “sales” means all gross receipts derived by the taxpayer from transactions and activity in the regular course of such trade or business. The following are rules for determining “sales” in various situations: Gross receipts are attributed to Kansas if, with respect to a single item of income, the income-producing activity is performed within and without Kansas but the greater proportion of the income-producing activity is performed in Kansas, based on costs of performance. In cases where services are performed partly within and partly without Kansas, the services performed in each state will usually constitute a separate income-producing activity; in such case, the gross receipts for the performance of services attributable to Kansas shall be measured by the ratio which the time spent in performing such services in this state bears to the total time spent in performing such services everywhere. Time spent in performing services includes the amount of time expended in the performance of a contract or other obligation which gives rise to such gross receipts. Personal service not directly connected with the performance of the contract or other obligation, such as time expended in negotiating the contract, is excluded from the computation. LINE D(1)—TOTAL PERCENT. If you are utilizing the three-factor formula to apportion income to Kansas, add lines A, B and C. LINE D(2)—TOTAL PERCENT. If you are qualified and are utilizing the elective two-factor formula to apportion income to Kansas, add lines A and C. LINE E—AVERAGE PERCENT. Divide line D(1) or D(2), whichever is applicable, by the number of factors used in the formula. For instance, if you are using the three-factor formula and the corporation does not have payroll anywhere, divide by 2. Consistency in Reporting In completing Form K-120S, K-120S AS and K-121S, if, with respect to prior tax years and to filing other states’ tax returns, t\ he taxpayer departs from or modifies the manner in which income has been classified as business income from nonbusiness income, in valuing property or of excluding or including property in the property factor, in the treatment of compensation paid in the payroll factor, or in excluding or including gross receipts in the sales factor, the taxpayer shall disclose by separate enclosed schedule the nature and extent of the variance or modification. Only inconsistencies in the denominators of the property, payroll, and sales factors which materially affect the amount of business income apportioned to Kansas need to be disclosed. Inconsistencies in the determination of nonbusiness income and in the denominators of the factors due to a difference in state laws or regulations must be identified by that state’s statute or regulation section number and shown on the separate schedule. The amount of each inconsistency by state is to be shown. When a taxpayer makes sales of tangible personal property which are shipped from Kansas and assigned to a state in which the taxpayer does not file a return or report, the taxpayer shall identify the state to which the property is shipped, report the total amount of sales assigned to such state, and furnish the facts upon which the taxpayer relies as establishing jurisdiction to tax by such state. PART IV—KANSAS PASS-THROUGH SCHEDULE Complete this schedule if this entity receives passed through distributions from another entity. For instance, if you own a 50% interest in Partnership A and are required to report income and/or expenses on your tax return, disclose the name, address, EIN, principal product or service and whether or not Partnership A has Kansas activity. PART V—KANSAS QSUB/DISREGARDED ENTITY SCHEDULE Complete this schedule if Qsub or disregarded entities are included in this return . Page 11 K-121S KANSAS (Rev. 7/12) COMBINED INCOME METHOD OF REPORTING For the taxable year beginning ________________ 20____ , ending ________\ _____________, 20____ Employer Identification Number (EIN) Name As Shown on Form K-120S PART I KANSAS COMBINED NET INCOME Enter separate corporate names and federal identification numbers Corporation A Corporation B Eliminations (Explain Below) Combined Income 1. Federal ordinary income .................................................................. 2. Total other income (loss) and deductions from federal Schedule K 3. Total (Add lines 1 and 2) .................................................................. 4. Total st ate and municip al interest ..................................................... 5. Taxes on or measured by income or fees or payments in lieu of income taxes ........................................................................\ ........... 6. Other additions to federal taxable income (Enclose schedule) ..... 7. Total (Add lines 3 through 6) ........................................................... 8. Interest on U.S. government obligations ......................................... 9. IRC Section 78 and 80% of foreign dividends (Enclose schedule) 10. Other subtractions from federal taxable income (Enclose schedule) 11. Total subtractions (Add lines 8, 9, & 10) ........................................ 12. Net income before apportionment (Subtract line 11 from line 7) .... 13. Nonbusiness income—Total company (Enclose schedule) ........... 14. Apportionable business income (Subtract line 13 from line 12) .... 15. Percent to Kansas (From line 6, Part II) .......................................... 16. Amount to Kansas (Line 15, Corp. A & B multiplied by line 14 combined income) ........................................................................\ .... 17. Nonbusiness income—Kansas (Enclose schedule) ........................ 18. Kansas expensing deduction (See instructions for Form K-120EX) 19. Combined report income (Add lines 16 and 17 then subtract line 18. Enter the result here and on line 19, page 1, Form K-120S) ............ EXPLANATION OF ELIMINATIONS: (Any corporation filing using the combined income method with more than\ one entity doing business in Kansas may file one Kansas return reporting the total Kansas combined income on tha\ t return.) Page 16 PART II APPORTIONMENT FORMULA (Form K-121S) Corporation A Within Kansas Corporation B Within Kansas To t a l Company Percent Within Kansas Beg. of Year End of Year Beg. of Year End of Year Beg. of Year End of Year 1a. Value of owned real and tangible personal property used in the business at original cost. Inventory ............................................................ Depreciable Assets ........................................... Land ...................... .............................................. Other Tangible Assets (Enclose schedule) .... Less: Construction in Progress ....................... Total Property to be Averaged ........................... Average Owned Property (Beg. + End ÷ 2) 1b. Net annual rental property. Multiplied by 8 ...... TOTAL PROPERTY ............................................. Percentage: Corporation A (Divide Corp. A by Total Co.) Percentage: Corporation B (Divide Corp. B by Total Co.) 2. Wages, salaries, commissions and other compensation of employees related to business income included in return. TOTAL PAYROLL ........................................................................\ .. Percentage: Corporation A (Divide Corp. A by Total Co.) Percentage: Corporation B (Divide Corp. B by Total Co.) 3. Sales (Gross receipts, less returns and allowances) ............. a. Sales delivered or shipped to purchasers in Kansas: (1) Shipped from outside Kansas ........................................ (2) Shipped from within Kansas ........................................... b. Sales shipped from Kansas to: (1) The United States Government ....................................... (2) Purchasers in a state where the taxpayer would not be taxable (e.g., under Public Law 86-272) ....................... c. Dividends ........................................................................\ ......... Interest ........................................................................\ .............. Rents ........................................................................\ ................ Royalties ........................................................................\ .......... Gains/losses from intangible asset sales ........................... Gross proceeds from tangible asset sales ......................... Other income (Enclose schedule) ....................................... TOTAL SALES ........................................................................\ ....... Percentage: Corporation A (Divide Corp. A by Total Co.) Percentage: Corporation B (Divide Corp. B by Total Co.) 1A 1B 2A 2B 3A 3B 4A 4B 5A 5B 6A 6B 4. Total Percent: Corporation A (Add lines 1A, 2A, & 3A) Corporation B (Add lines 1B, 2B, & 3B) If utilizing three factor formula 5. Total Percent: Corporation A (Add lines 1A & 3A) Corporation B (Add lines 1B & 3B) If qualified and utilizing two factor formula 6. Average Percent: Corporation A (To Part I, Line 15, Form K-121S) Corporation B (To Part I, Line 15, Form K-121S) Average percent of line 4 or 5, whichever is applicable Page 17 State of Kansas State of Kansas Department of Revenue Department of Revenue Docking State Office Building, 915 SW Harrison St. Docking State Office Building, 915 SW Harrison St. T Topeka, KS 66612-1588 opeka, KS 66612-1588 PRSRT STD
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