PDF document

- 1 -

                       INSTRUCTIONS FOR FORM                                       GR-1120
              CITY OF GRAYLING CORPORATION RETURN
                             For corporations doing business in the City of Grayling 
Filing Date and Remittance 
                                                             Line 10.   Not applicable in the City of Grayling. 
An annual return is due on or before the last day of the 
fourth month following the end the corporation's taxable     Line 11 - 12.  Follow the instructions printed on the return 
year.    Returns must be for the same calendar year, fiscal  form. 
year, or other accounting period as the taxpayer uses for 
federal income tax purposes.  For calendar year filers the   PAYMENTS AND CREDITS 
due date is April 30.                                        Line 13.  Enter the total of estimated payments, amounts 
                                                             carried forward from an  GR-1120, amounts paid with an 
Make remittance payable to: City of Grayling                 extension request (Grayling extension form) and a credit 
                                                             for tax paid by a partnership on behalf of the corporation. 
Mail your return and remittance to: 
                                                             OVERPAYMENT OF TAX 
         City of Grayling                                    Line 14.  If the total tax payments (line 13) are greater than 
         Income Tax Department                               tax due (line 12) subtract line 12 from line 13 and enter the 
         PO BOX 549                                          tax overpayment. 
         Grayling, MI 49738 
Who Must File a Corporation Return (GR-1120)                 Line 15.  Enter all or the portion of the overpayment to be 
                                                             applied to the next year's estimated tax as a credit forward. 
The City of Grayling income tax became effective January 
1, 1994.  Every corporation doing business in the City of    Line 16.  Enter all or the portion of the overpayment to be 
Grayling after January 1, 1994, whether or not an office or  refunded via a paper refund check. 
place of business was maintained in the City, is required to 
make and to file an annual City of Grayling Income Tax       Line 17.  EFT and Direct Deposit not available.
Corporation Return, Form GR-1120.  An annual return 
must be filed whether or not the corporation has net         An overpayment refund will be issued via a paper check  .
profits. 
                                                             TAX DUE 
Corporations cannot elect to file and be taxed as            Line 18.  If tax due (line 12) is greater that the total tax 
partnerships.  A corporation that elects to file under Sub-  payments (line 13) subtract line 13 from line 12 and enter 
chapter S of the internal revenue code must file as a C      the tax due.  Tax due must be paid when filing the return. 
corporation for Grayling Income Tax purposes.                Make check or money order payable to CITY OF 
                                                             GRAYLING, and mail the remittance with the return to 
Non-profit corporations which have applied for and           CITY OF GRAYLING, INCOME TAX DEPARTMENT, 
received approval for exemption from Federal income tax      PO BOX 549 GRAYLING,,       MI  49738. 
shall not be required to file an Grayling return provided 
they submit, to the Administrator, a copy of their approved  PAGE 2 INSTRUCTIONS 
exemption from the Internal Revenue Service.  The 
exemption from filing a City of Grayling return will         SCHEDULE S 
continue as long as the Federal exemption is in effect.      S corporations must file as C corporations.  Schedule S is 
                                                             used to reconcile the amount reported on line 1, page 1 of 
The ordinance also specifically exempts state and national   GR-1120 with Federal Form 1120S and Schedule K (Form 
banks, trust companies, insurance companies, building and    1120S). 
loan and saving and loan associations, and credit unions 
(chartered by either the state or federal government).       SCHEDULE C 
                                                             COLUMN 1, LINE 1.  Enter on line 1 the nondeductible 
Extensions                                                   portion of a loss from the sale or exchange of property 
The Administrator may extend the time for filing up to six   acquired prior to January 1, 1994.  The portion of the loss 
months with a written request of the taxpayer or to one      occurring prior to the inception of the Ordinance, January 
month beyond the extension when a longer extension has       1, 1994 is not recognized.  The amount of loss occurring 
been granted by the Internal Revenue Service, All requests   prior to January 1, 1994 is determined by either (1) 
for extension must be made on or before the required         computing the difference between the total gain or loss for 
filing date of the return.                                   the property as reported for federal income tax purposes 
                                                             and the Grayling taxable portion of the loss computed by 
A valid extension does not extend the time for paying the    substituting the fair market value of the property on 
tax due.  Payment of the total estimated tax due must be     January 1, 1994, (the December 31, 1993, closing price for 
made with the request for extension.  Interest and penalty   traded securities) for the basis in determining gain or loss; 
will be charged for underestimation of, or not paying, the   or (2) by multiplying the loss for the entire holding period, 
estimated tax due.                                           as computed for federal income tax purposes, by a 
                                                             fraction, the numerator being the number of months the 
PAGE 1 INSTRUCTIONS                                          property was held prior to January 1, 1994 and the 
                                                             denominator 
Line 1 - 9.  Follow the instructions printed on the return 
form. 
                                                           Page 1 of 3

- 2 -

being the total number of months the property was held. owned and located or used in the City of Grayling. The
See Column 2, line 5 for instructions relative to gains from average net book value of real and tangible personal
sales or exchanges of property acquired prior to January 1, property may be determined by adding the net book values
1994. at the beginning of the year and the net book values at the
end of the year and dividing the sum thus obtained by two.
Capital losses from U.S. Government obligations included
in income reported on page 1, line 1 are not deductible. LINE 1a. Enter in column 1 the gross annual rent
Remove these losses by including them in the amount multiplied by 8 for all rented real property regardless of
reported on line 1. location. In column 2 show the gross annual rent multiplied
by 8 for rented real property located in the City of Grayling.
COLUMN 1, LINE 4. Enter the losses from entities Gross annual rent refers to real property only, rented or
filing as partnerships that are included in taxable income leased during the taxable period, and should include the
reported on page 1, line 1. actual sums of money or other consideration paid, directly
COLUMN 2, LINE 1. Enter the amount of interest or indirectly, by the taxpayer for the use or possession of
income from obligations of the United States, the states or such property.

subordinate units of government of the state that is LINE 2. Enter in column 1 the total compensation paid to
included in taxable income reported on page 1, line1.
all employees during the year, and in column 2 show the
COLUMN 2, LINE 2. If you reported dividend income, amount of compensation paid to employees for work or
enter on this line the amount of the dividend-received services performed within the City of Grayling during the
deduction allowed by the federal Internal Revenue Code year.

for dividends received. LINE 3. Enter in column 1 the total gross revenue from all
sales or services rendered during the year, and in column 2
COLUMN 2, LINE 3 AND LINE 4. Taxpayers may
show the amount of revenue derived from sales made or
deduct income, war profits and excess profits taxes
services rendered in the City of Grayling during the year. If
imposed by foreign countries or possessions of the United
there is no regularly maintained sales force outside of the
States, allocable to income included in taxable net income,
city, this allocation factor must be 100% for businesses with
any part of which would be allowable as a deduction in
no other business activity outside the city.
determining federal taxable income under the applicable
provisions of the federal Internal Revenue Code. Separate Accounting – The taxpayer may petition for, or the
If a foreign tax credit, rather than a foreign tax deduction, administrator may require, use of the separate accounting
was claimed on your federal return, enter on line 3 the method. If such method is petitioned, the administrator
portion of the foreign tax credit which is grossed up and may require a detailed statement to determine whether the
included in you Grayling return as dividend received. net profits attributable to the city will be apportioned with
reasonable accuracy.
Enter on line 4 the “foreign taxes paid or accrued” portion
of the foreign tax credit claimed on you federal return, not Generally a corporation that is unitary in nature (i.e., has
in excess of the federal limitations thereon. The balance central management, purchasing, warehousing, advertising,
of your foreign tax credit is not deductible. etc.) can not use separate accounting. Taxpayers allocating
on any basis other than separate accounting shall include all
COLUMN 2, LINE 5. Enter on line 5 the nontaxable interest, dividends and other non-operating income to arrive
portion of a gain from the sale or exchange of property at the total income subject to the allocation percentage.
acquired prior to January 1, 1994. The portion of the gain
occurring prior to the inception of the Ordinance is not Taxpayers using separate accounting shall include in
recognized. Refer to the instructions for Schedule C, income subject to tax a proportionate share of dividends,
column 1, line 1 for computation instructions. interest and other non-operating income of the total
corporation. This type of income is apportioned to
Capital gains from U.S. Government obligations included Grayling activity on the same basis as general
in income reported on page 1, line 1 are not taxable. administrative and overhead costs are apportioned.
Remove these gains by including them in the amount
reported on line 5. SCHEDULE G
LINE 1. Net operating losses carried forward are to be
COLUMN 2, LINE 6. Enter income from entities filing reported on this line. There is no provision for carrying
as partnerships that are included in taxable income back losses to prior tax years. Carryover losses are to be
reported on page 1, line 1. allocated to Grayling at the percentage of business
conducted in Grayling in the year in which the loss was
SCHEDULE D sustained. If all business was not conducted in Grayling in
The business allocation percentage formula must be used the year in which the loss was sustained, use the business
by corporations with business activity both within and allocation percentage formula to arrive at the deductible
outside the City of Grayling who have not been approved portion of the loss. Attach a schedule showing your
to use the separate accounting method. If a corporation computation for the amount reported on this line.
has property and payroll percentage that is 100% Grayling,
you do not have business activity outside the City of LINE 2. Enter on this line the net capital loss carryover
Grayling and may not allocate sales. Enter 100% on applicable to Grayling. Net capital losses sustained by a
Schedule D, line 5. corporation for periods subsequent to January 1, 1994 may
be carried forward in the same manner as under the federal
LINE 1. Enter in column 1 the average net book value of Internal Revenue Code. No deduction will be allowed for
all real and tangible personal property owned by the capital losses sustained prior to January 1, 1994. If all
business, regardless of location, and in column 2 show the business was not conducted in Grayling in the year in which
net book value of the real and tangible personal property
Page 2 of 3

- 3 -

the loss was sustained, use the business allocation WEBSITE
percentage formula to arrive at the deductible portion of
the loss. Attach a schedule showing your computation for Income tax forms and instructions are available on the
the amount reported on this line. City of Grayling website, www.cityofgrayling.org.
NOTICE
LINE 3. Corporations who are partners in a business These instructions are interpretations of the Grayling
activity taxed as a partnership that has business activity in Income Tax Ordinance. The Ordinance will prevail in
Grayling must enter on this line their portion of the any disagreement between the instructions and the
Grayling taxable income or loss from the partnership(s). Ordinance.
Attach a schedule showing your computation for the
amount reported on this line including the name and
taxpayer identification number of the partnership(s).

INFORMATION AND PREPARER AUTHORIZATION
Third Party Designee. If the “Yes” box is marked, the
corporation is authorizing the Grayling Income Tax
Department to call the preparer to answer any questions
that may arise during the processing of its return. The
corporation is also authorizing the preparer: to give the
Department any information that is missing from the
return or the status of any related refund or payments; and
to respond to certain notices that the corporation has
shared with the preparer about math errors, offsets and
return preparation.

DECLARATION AND PAYMENT OF ESTIMATED
TAX
1. WHO MUST FILE: Every corporation subject to
the tax on all or part of its net profits must file a
Declaration of Estimated Income Tax (Form GR-
1040ES). A Declaration is not required from
corporations if the estimated tax is two hundred
fifty dollars ($250.00) or less.

2. WHEN AND WHERE TO FILE:

A. Declaration for Calendar Year: The
Declaration for a calendarthyear must be
filed on or before April 30 of that year.
The estimated tax is payable in equal
installments on or before April 30th, June
30th, September 30th and January 31st.

B. Declaration for Fiscal Year: The
Declaration for a year, or period differing
from the calendar year must be filed within
four (4) months after the beginning of each
fiscal year or period. For example, if a
fiscal year begins on April 1st, the
Declaration will be due on July 31st.
Remaining installments will then be due on
the last day of the 6th, 9th and 13th months
after the beginning of the fiscal year.

C. Filing and Payment: The Declaration
should be filed with the City of Grayling,
Income Tax Department, PO Box 549,
Grayling , MI 49738. The first installment
payment must accompany the Declaration.
The estimated tax may be paid in full with
the Declaration. ASSISTANCE
If you have questions or would like to request forms ,
call (348-2131 x108989 ) .
Questions by mail should be directed to:
City of Grayling, Income Tax Department,
PO B49 Grayling,OX 5 ,49738MI
www.cityofgrayling.org

Page 3 of 3

PDF file checksum: 2013378171

(Plugin #1/9.12/13.0)