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CITY OF PORTLAND INCOME TAX
20____ CORPORATE RETURN
Instructions for Form P-1120 for Corporations doing business in Portland
FILING DATE: When a tentative return is filed, a final return must be filed
Calendar year taxpayers must file by April 30, of the next no later than six (6) months after the filing of the tentative return.
year. Additional tax due, if any, must be paid with the final return.
Fiscal year taxpayers must file within 4 months after the
end of their fiscal year. Instructions for Page 1
Line 8. If you entered an amount on line 2 of page 1, use
REMITTANCE: either of the methods explained in the instructions for line 28 of
The tax due, if one dollar ($1.00) or more, must be paid Schedule C to determine the taxable portion of the gain or loss for the
when filing the return. Make remittance payable to taxable period. Do not include capital gains and losses on the sale or
TREASURER-CITY OF PORTLAND exchange of United States obligations since such gains and losses are
excluded from taxation under the uniform city income tax ordinance.
MAILING ADDRESS:
Mail your return and remittance to Line 12. Enter on this line the net capital loss carryover
CITY OF PORTLAND and net operating loss carryover applicable to Portland. Do not use
INCOME TAX DIVISION this line for a net operating loss carry back or capital loss carried
259 KENT STREET back and applied to prior years, but may be carried forward to the
PORTLAND MI 48875 same extent and on the same basis as under the Federal Internal
Revenue Code.
Effective Date of Tax
The City of Portland income tax became effective Carryover losses are to be allocated to Portland at the
January 1, 1984. Corporations are required to pay the tax each year percentage of business conducted in Portland in the year in which the
on that part of their net income attributable to business activity loss was sustained. If all business was not conducted in Portland in
conducted in Portland commencing with their first year, calendar or the year in which the loss was sustained, use the business allocation
fiscal, ending after January 1, 1984. percentage formula to arrive at the deductible portion of the loss. If
you did not allocate the loss reported on prior years’ returns and you
Corporations Required to File did not conduct 100% of your business in Portland, attach a schedule
Every corporation doing business in the city, whether or not showing your computation for the amount reported on this line.
it has an office or place of business in the city, and whether or not it
has net profits, is required to file an annual City of Portland Schedule C - Option
Corporation Income Tax Return. Form P-1120 or Corporate A corporation has the option of either entering on line 1a of
Common Form. page 1 the taxable income before net operating loss deductions and
Corporations cannot elect to file and be taxed as special deductions as shown on its U.S. Corporation Income Tax
partnerships. (Likewise, partnerships cannot elect to file and be taxed Return, Form 1120, or of starting with line 1b, and entering there the
as corporations.) total from line 30 of Schedule C of this return.
The ordinance specifically exempts from taxation state and If it starts with line 1a of page 1 it must attach a copy of its
national banks, trust companies, insurance companies, building and Federal Return.
loan and savings and loan associations, credit unions safety and Corporations reporting on the separate accounting method
collateral deposit companies, and any other association, joint stock are required to complete Schedule C and report income on line 1b of
company or corporation at least 90% of whose assets consist of page 1.
intangible personal property and at least 90% of whose gross income
consists of dividends or interest or other charges resulting from the Schedule C – Instructions
use of money or credit. Taxpayers electing to report under the separate accounting
method (Sec. 19 of the Ordinance) rather than under the
Filing Date apportionment formula (Secs. 20-24) will enter only the amounts
Taxpayers on a calendar year are required to file by April applicable to Portland business activity in Schedule C. To report
30, of the next year. Those on a fiscal year must file by the last day under the separate accounting method the taxpayer must regularly
of the fourth month following the end of the fiscal year. Returns keep its books and records in such a manner as to show with
shall be for the same calendar year, fiscal year, or other accounting reasonable accuracy the portion of its net profits attributable to work
period as the taxpayer uses for Federal income tax purposes. done, services performed or rendered, and other business activities
conducted within the city. Generally, a corporation that is unitary in
Extensions nature i.e., has central management, purchasing, warehousing,
All taxpayers having a liability for filing a City of Portland advertising, etc., cannot use separate accounting.
income tax return must file either a final return or a tentative return Depreciation – Line 15. use the same basis and method as
on or before the due date for filing. For Calendar-year taxpayers the used for Federal income tax reporting.
due date is April 30. Fiscal –year taxpayers must file either the final Contributions- Line 16. Contributions are deductible to
return or a tentative return on or before the last day of the fourth the same extent, and under the same limitations, as under the Federal
month after the close of the fiscal year. The amount of income tax Internal Revenue Code.
liability estimated on a tentative return, less prior payments if any, Dividends and Interest Lines 25 and 26. Taxpayers
must be paid at the time of filing. allocating on any basis other than separate accounting shall include
all interest, dividends, and other non-operating income to arrive at the
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total income subject to the allocation percentage. Taxpayers using Line 2. Enter in column 1 the total compensation paid to
separate accounting shall include in income subject to tax a all employees during the year and in column II show the amount of
proportionate share of dividends, interest, and other non-operating compensation paid to employees for work or services performed
income of the total corporation, using a direct allocation if the income within the City of Portland during the year.
is received by the divisions subject to the Portland tax, or Line 3. Enter in column 1 the total gross revenue from all
apportioning it on the same basis as general administrative and sales or services rendered during the year and in column II show the
overhead costs are apportioned to Portland activity. amount of revenue derived from sales made or services rendered in
Income from rents and royalties- Line 27. Follow the same the City of Portland during the year.
instructions here as for dividends and interest above.
Gain or loss from sale or exchange of property – Line 28. Enter Schedule E- Instructions
on line 28 of Schedule C the total amount of gain or loss from sale or Line 1. Use this line to adjust net profit for those items
exchange of property for the same period as reported in this schedule. reflected in the taxable period which are attributable to any period
Only the amount of the gain or loss occurring from January 1, 1984 prior to January 1, 1984.
to date of disposition shall be recognized for purposes of the Portland Examples of items of this nature which are adjustments to
income tax. Adjustment for this is to be made on page 1, however, prior periods would be assessments and interest based on deficiencies
rather than on Schedule C by removing the gain or loss on line 2 and in sales and use taxes, federal excise tax, personal and real property
inserting on line 8, only the portion of the gain or loss applicable to taxes etc.
the holding period subsequent to January 1, 1984 to the date of Line 6. The City of Portland Income Tax Ordinance
disposition. Any net capital loss carryover included in line 2 of page provides for the specific exclusion from the tax of interest from
1 should be excluded before entry on line 8 of page 1. The portion of obligations of the United States, the states of subordinate units of
line 2 that represents net capital loss carryover is to be entered on line government of the state.
12 of page 1in accordance with the instructions for that line. The Line 8. Taxpayers may deduct income, war profits and
amount of gain or loss occurring after January 1, 1984 (to be entered excess profits taxes imposed by foreign countries or possessions of
on page 1, line 8) is to be determine by either (1) computing the the United States, allocable to income included in taxable net income,
difference between the January 1, 1984 fair market value (December any part of which would be allowable as a deduction in determining
29, 1983 closing price for traded securities) or the cost if the date federal taxable income under the applicable provisions of the Federal
acquired was subsequent to January 1, 1984, and the proceeds from Internal Revenue Code.
the sale or exchange, or (2) by using the gain or loss for the entire
holding period , as computed for Federal income tax purposes, and Computation and Payment of Tax
computing the taxable portion of such gain or loss on the ratio that After computing your Portland Income Tax and deducting
the number of months held in the period subsequent to January 1, your credits, if there is any tax due it must be paid when filing this
1984 is to the total time the property was held. return. Make check or money order payable to TREASURER-
CITY OF PORTLAND and mail with this return to CITY OF
Schedule D – Instructions PORTLAND, INCOME TAX DIVISION, 259 KENT ST.,
The business allocation percentage formula is to be used by PORTLAND MICHIGAN 48875. If your payments and credits
corporations within business activity both inside and outside the City exceed the tax, show the amount of such overpayment on line 17 and
of Portland who, because they do not maintain sufficient records to check the proper box on line 19 to indicate whether you wish the
accurately reflect the net profits from operations conducted within the overpayment as a refund or as a credit on your estimated tax.
City of Portland, or for other reasons, are not using the separate Refunds will be made as quickly as possible, but please allow 90
accounting method. days before making an inquiry. Refunds of less than one dollar
A corporation located in Portland without a regularly ($1.00) will not be made. Tax due of less than one dollar ($1.00)
maintained and established out-of-city location SHOULD NOT use need not be paid.
the business allocation formula. Sales, and shipments, to out-of-city
destinations, when no out-of-city location is regularly maintained and Declaration and Payment of Estimated Tax
established, does not entitle apportionment of a part of the net profit 1. WHO MUST FILE: Every Corporation subject to the tax
as being earned as result of work done, services rendered, or other on all or part of its net profits must file a Declaration of
business activity conducted outside the city. Estimated Income Tax (Form P-1040-ES). A Declaration
Solicitation of orders by telephone or by catalogs or other is not required from corporations if the estimated tax on
mailed matter from a location within the City for shipment to an out- Line 3 is TWO HUNDRED FIFTY DOLLARS ($250.00)
of-city destination does not constitute out-of-city activity. Also, the or less.
solicitation of orders by an out-of-city independent contractor does 2. WHEN AND WHERE TO FILE AND PAY :
not constitute out-of–city activity for a local corporation. A. Declaration for Calendar Year. The Declaration for
Line 1. Enter in column 1 the average net book value of all a calendar year must be filed on or before April 30th,
real and tangible personal property owned by the business, regardless June 30th, September 30, and January 31 .st
of location; and in column II show the net book value of the real and B. Declaration for Fiscal year. The Declaration for a
tangible personal property owned and located or used in the City of year, or period differing from the calendar year must
Portland. The average net book value of real and tangible personal be filed within four (4) months after the beginning of
property may be determined by adding the net book values at the each fiscal year or period. For example, if your fiscal
beginning of the year and the net book values at the end of the year year begins on April 1st, your declaration will be due
and dividing the sum thus obtained by two. Any other method which on July 31st. Remaining installments will then be due
will accurately reflect the average net book value for the year will on the last day of the 6th, 9 thand 13 monthsthafter the
also be permitted. beginning of the fiscal year.
Line 1a. Enter in column I the gross annual rent multiplied C. Filing and Payment. The Declaration should be filed
by 8 for all rented real property regardless of location. In column II with the City of Portland, Income Tax Division, 259
show the gross annual rent multiplied by 8 for rented real property Kent St., Portland MI 48875. The First installment
located in the City of Portland, Gross annual rent refers to real payment must accompany the Declaration. However,
property only, rented or leased during the taxable period and should the estimated tax may be paid in full with the
include the actual sums of money or other consideration payable, declaration.
directly or indirectly, by the taxpayer for the use of possession of
such property.
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