Connecticut Corporation Business Tax Return Apportionment Computation of Income From Financial Service Company Activities

Corporation Business Tax Return Apportionment Computation of Income From Financial Service Company Activities
Form CT-1120 A-FS
Form CT-1120A-FS

Department of Revenue Services
State of Connecticut
(Rev. 12/17)

Corporation Business Tax Return
Apportionment Computation of Income
From Financial Service Company Activities

Enter Income Year Beginning _____________________, _______ , and Ending ____________________, _________
Corporation name	

Connecticut Tax Registration Number

Complete this form in blue or black ink only. See instructions.



Check here if the corporation elects to exclude receipts attributable to an international banking facility from the numerator
of its receipts factor and to include such receipts in the denominator of its receipts factor. The election is irrevocable for and
applicable for five successive income years.
	
Column A	
	Connecticut	

	 Receipts Factor Apportionment
	 1.	 Receipts from the lease or rental of real property	

1.

	 2.	 Receipts from the lease or rental of tangible personal property,
other than transportation property		

2.

	 3.	 Receipts from the lease or rental of transportation property	

3.

	 4.	 Interest, including fees and penalties, received on loans secured
by real property			

4.

	 5.	 Interest, including fees and penalties, received on loans not
secured by real property			

5.

	 6.	 Net gains from the sale of loans secured by real property	

6.

	 7.	 Net gains from the sale of loans not secured by real property	

7.

	 8.	 Loan servicing fees from loans secured by real property	

8.

	 9.	 Loan servicing fees from loans not secured by real property	

9.

Column B
Everywhere

	10.	 Interest, dividends, gains (but not less than zero), and other income
from investment and trading assets and activities: See instructions.
Check method used for this item:



Average Value Method



Gross Income Method	

	11.	 Receipts received for management, distribution, and administrative
services performed on behalf of an investment entity	

10.
11.

	12.	 Receipts for management, distribution, and administrative services
performed on behalf of a pension fund or retirement account



Elect average fair market value of funds: See instructions.	

12.

	13.	 Any other receipts included in factor but not listed above:
Describe_________________________________________________ 	13.
	14.	 Total: Add Lines 1 through 13 for each column.	

14.

	 Connecticut Apportionment Fraction
	15.	 Receipts apportionment fraction: Divide Line 14, Column A, by
Line 14, Column B, and carry to six places. Enter the result here
and on Form CT-1120, Schedule A, Line 2. Carry to six places.	

15.

0.

Form CT-1120A-FS Instructions
Complete this form in blue or black ink only.
Use Form CT-1120A-FS, Corporation Business Tax Return
Apportionment Computation of Income From Financial Service
Company Activities, if the company is a financial service
company, as defined in Conn. Gen. Stat. §12-218b, whose
business activity is taxable inside Connecticut, whether or not it
is taxable outside Connecticut.
This form does not apply to net income from services or activities
described in:
•	 Conn. Gen. Stat. §12-218(e), services provided to a regulated
investment company. Use Form CT-1120A-IRIC;
•	 Conn. Gen. Stat. §12-218(f), security brokerage services.
Use Form CT-1120A-SBC; and
•	 Conn. Gen. Stat. §12-218(i), credit card activities. Use Form
CT-1120A-CCA.
Such income shall be apportioned in accordance with subsections
(e), (f), or (i) of Conn. Gen. Stat. §12-218.
International banking facility: Receipts attributable to an
international banking facility are not included in the numerator
or denominator of the receipts factor. In lieu of such exclusion
of receipts attributable to an international banking facility, the
taxpayer may, on or before the due date (or extended due date) of
its Corporation Business Tax return, make an election to exclude
receipts attributable to an international banking facility from the
numerator of its receipts factor and to include such receipts in
the denominator of its receipts factor.
If the taxpayer makes the election, the taxpayer may not, in
arriving at its net income, deduct the gross income attributable to
the international banking facility from its gross income. Expenses
or losses attributable to the international banking facility, to the
extent deductible under the Internal Revenue Code, may be
deducted from its gross income. The election is irrevocable for
and applicable for five successive income years.

Definitions

Financial service company is defined broadly and is intended
to include the traditional business entities that are generally
considered to be engaged in the business of lending money,
extending credit, or otherwise dealing in money capital. See
Conn. Gen. Stat. §12-218b(a)(6), Ruling 2000-4 and Ruling
2015-1.
Loan means:
1.	 Any extension of credit resulting from direct negotiations
between the taxpayer and its customer; or
2.	 The purchase or receipt, in whole or in part, from another
of such extension of credit.
Billing address means the location indicated in the books and
records of the taxpayer, investment entity, pension fund, or
retirement account as the address where any notice, statement,
or bill relating to the customer, investor, or participant’s account
is mailed. The billing address shall be determined as of the first
day of the taxable year, or the date during the taxable year when
the relationship began between the taxpayer, investment entity,
pension fund, or retirement account and the customer, investor,
or participant.

Form CT-1120A-FS (Rev. 12/17)

Administrative services include clerical, accounting, record
keeping, transfer agency, bookkeeping, data processing,
custodial, internal auditing, legal, and tax services provided to
an investment entity, pension fund, or retirement account along
with management or distribution services.
Distribution services include selling interests in an investment
entity, pension fund, or retirement account. Distribution services
also include advertising, servicing, or marketing services
provided to an investment entity, pension fund, or retirement
account by an entity that sells interests in such investment entity,
pension fund, or retirement account.
Management services include:
1.	 The rendering of investment advice to an investment entity,
pension fund, or retirement account;
2.	 The determining when sales and purchases of property are
to be made on behalf of an investment entity, pension fund,
or retirement account; and
3.	 The selling or purchasing of property constituting assets of
an investment entity, pension fund, or retirement account
pursuant to a contract with such investment entity, pension
fund, or retirement account.

General Instructions

Apportion the net income of a financial service company to
Connecticut by multiplying such income by an apportionment
fraction that is calculated using the receipts factor that is reflected
on Line 15. The numerator of the receipts factor is the total of
the Connecticut receipts of the taxpayer during the income year
and is reflected in Column A, Line 14. The denominator of the
receipts factor is the total of the receipts of the taxpayer within
and outside Connecticut during the income year and is reflected
in Column B, Line 14. Use the same method to calculate receipts
for purposes of the denominator as is used to determine receipts
for purposes of the numerator. For Lines 1 through 13, enter
Connecticut receipts in Column A and enter total receipts in
Column B.

Line Instructions

Line 1 - Enter receipts from the lease, sublease, or rental of real
property on which the taxpayer may claim depreciation for federal
income tax purposes or real property to which the taxpayer holds
legal title and on which no other person may claim depreciation
for federal income tax purposes. Connecticut receipts from the
lease or rental of real property are equal to receipts from the
lease, sublease, or rental of real property that is owned by the
taxpayer and located in Connecticut.
Line 2 - Enter receipts from the lease, sublease, or rental of
tangible personal property other than transportation property
on which the taxpayer may claim depreciation for federal
income tax purposes or tangible personal property to which the
taxpayer holds legal title and on which no other person may
claim depreciation for federal income tax purposes. Connecticut
receipts from tangible personal property are equal to receipts
from the lease, sublease, or rental of tangible personal property
owned by the taxpayer if the tangible personal property is located
within Connecticut when it is first placed in service by the lessee.

Page 2 of 7

Line 3 - Enter receipts from the lease or rental of transportation
property, which means vehicles and vessels capable of moving
under their own power (such as aircraft, trains, water vessels,
and motor vehicles) and any equipment or containers attached
to such vehicles and vessels. If the transportation property is
an aircraft then the Connecticut receipts are equal to the total
receipts multiplied by the number of landings in Connecticut
and divided by the total number of landings for the aircraft. If the
transportation property is a motor vehicle then the Connecticut
receipts are equal to the total receipts if the motor vehicle
is registered in Connecticut. If the extent of the use of any
transportation property in Connecticut cannot be determined, the
property shall be deemed to be used wholly in the state which
the property has its principal base of operations.
Line 4 - Enter interest received on loans where 50% or more
of the aggregate fair market value of the collateral used to
secure the loan is real property. Interest includes fees and
penalties in the nature of interest. Connecticut receipts from
interest received on loans secured by real property are equal
to interest paid on loans if more than 50% of the fair market
value of the real property securing the loan is located within
Connecticut and interest paid on loans where more than 50%
of the fair market value of the real property securing the loan
is not located within any one state and the borrower is located
within Connecticut. A borrower is located in Connecticut if it is
engaged in a trade or business that maintains its commercial
domicile in Connecticut or it is not engaged in a trade or business
and its billing address is in Connecticut. The location and the fair
market value of the real property shall be determined at the time
of the original agreement.
Line 5 - Enter interest received on loans other than loans
described in Line 4. Interest includes fees and penalties in the
nature of interest. Connecticut receipts from loans not secured by
real property are equal to interest on such loans if the borrower
is located in Connecticut. A borrower is located in Connecticut if
it is engaged in a trade or business that maintains its commercial
domicile in Connecticut or it is not engaged in a trade or business
and its billing address is in Connecticut.
Line 6 - Enter the net gain (but not less than zero) from the
sale of loans where 50% or more of the aggregate fair market
value of the collateral used to secure the loan is real property.
The Connecticut net gain from the sale of such loans is equal
to the total net gain from the sale of such loans multiplied by
the amount in Column A, Line 4 and divided by the amount in
Column B, Line 4.
Line 7 - Enter the net gain (but not less than zero) from the sale
of loans other than loans described in Line 6. The Connecticut
net gain from the sale of such loans is equal to the total net gain
from the sale of such loans multiplied by the amount in Column A,
Line 5 and divided by the amount in Column B, Line 5.
Line 8 - Enter loan servicing fees derived from loans where
50% or more of the aggregate fair market value of the collateral
used to secure the loan is real property. Connecticut loan
servicing fees derived from such loans include the total of such
fees multiplied by the amount in Column A, Line 4 and divided
by the amount in Column B, Line 4. Connecticut loan servicing
fees also include fees for servicing such loans of another if the
borrower is located in Connecticut. A borrower is located in
Connecticut if it is engaged in a trade or business that maintains
its commercial domicile in Connecticut or it is not engaged in a
trade or business and its billing address is in Connecticut.
Form CT-1120A-FS (Rev. 12/17)

Line 9 - Enter loan servicing fees from loans other than loans
described in Line 8. Connecticut loan servicing fees derived from
loans not secured by real property include the total of such fees
multiplied by the amount in Column A, Line 5 and divided by the
amount in Column B, Line 5. Connecticut loan servicing fees also
include fees for servicing such loans of another if the borrower is
located in Connecticut. A borrower is located in Connecticut if it
is engaged in a trade or business that maintains its commercial
domicile in Connecticut or it is not engaged in a trade or business
and its billing address is in Connecticut.
Line 10 - Enter income from investment assets and activities
and trading assets and activities, including:
1.	 Interest;
2.	 Dividends;
3.	 Net gains (but not less than zero);
4.	 Investment securities;
5.	 Account assets;
6.	 Federal funds;
7.	 Securities purchased and sold under agreement to resell
or repurchase;
8.	 Options;
9.	 Futures contracts;
10.	 Forward contracts;
11.	 Notional principal contracts (i.e. swaps, equities, foreign
currency transactions);
12.	 Other income from investment assets and activities and
trading assets and activities;
13.	 The amount by which interest from federal funds sold
exceeds interest expense on federal funds purchased;
14.	 The amount by which securities purchased under resale
agreements exceeds interest expenses on securities sold
under repurchase agreements; and
15.	 The amount by which the interest, dividends, gains, and
other income from trading assets and activities (including
assets and activities in the matched book, in the arbitrage
book, and foreign currency transactions) exceeds the
amount paid in lieu of interest, the amount paid in lieu of
dividends, and the losses from such assets and activities.
Connecticut income from investment assets and activities
and trading assets and activities is calculated using either the
Average Value Method or the Gross Income Method. The
taxpayer may elect either method or the Commissioner may
require either method in order to accurately reflect the business
of the taxpayer in Connecticut. For both methods, a taxpayer
shall have the burden of proving that an investment asset or
activity is properly assigned to a regular place of business
outside Connecticut.
•	

Average Value Method:
1.	 Connecticut income from investment assets and
activities in the investment account is equal to the total
income from such assets and activities multiplied by
the average value of such assets properly assigned to
a place of business in Connecticut and divided by the
average value of all such assets.
2.	 Connecticut income from federal funds sold and
purchased and from securities purchased under resale
Page 3 of 7

agreement and securities sold under repurchase
agreement is equal to the total income from such funds
and securities multiplied by the average value of such
funds and securities assigned to a regular place of
business within Connecticut and divided by the average
value of all such funds and securities.
3.	 Connecticut income from trading assets and activities
(including assets and activities in the matched book, in
the arbitrage book, and foreign currency transactions)
is equal to the total income from such assets and
activities multiplied by the average value of such trading
assets assigned to a regular place of business within
Connecticut and divided by the average value of all
such assets. The average value of an asset, fund, or
security is calculated by adding the value of the asset,
fund, or security on the first day of the income year
and the value of the asset, fund, or security on the last
day of the income year and dividing that figure by two.
Either the taxpayer or the Commissioner may determine
Connecticut income by averaging the value of assets,
funds, or securities on a more frequent basis.
•	

Gross Income Method:
1.	 Connecticut income from investment assets and
activities in the investment account is equal to the total
income from such assets and activities multiplied by
the gross income from such assets which are properly
assigned to a regular place of business of the taxpayer
within Connecticut and divided by the total gross income
from all such assets.
2.	 Connecticut income from federal funds sold and
purchased and from securities purchased under resale
agreement and securities sold under repurchase
agreement is equal to the total income from such funds
and securities multiplied by the gross income from such
funds and securities assigned to a regular place of
business within Connecticut and divided by the gross
income from all such funds and securities.
3.	 Connecticut income from trading assets and activities
(including assets and activities in the matched book, in
the arbitrage book, and foreign currency transactions) is
equal to the total income from such assets and activities
multiplied by the gross income from such assets and
activities assigned to a regular place of business within
Connecticut and divided by the gross income from all
such assets and activities. If the taxpayer uses the
Gross Income Method then it must continue to use the
Gross Income Method until it receives permission from
the Commissioner to use the Average Value Method.

See Worksheets A, B, and C for additional assistance for Line 10.

Form CT-1120A-FS (Rev. 12/17)

Line 11 - Enter receipts for providing management, distribution,
and administrative services performed on behalf of an
investment entity, which includes a separate account of an
insurance company, an investment partnership, a real estate
investment trust, a real estate mortgage conduit, a financial
asset securitization investment trust, or a similar investment
entity which is exempt from, or not subject to, federal income tax.
Connecticut receipts received from management, distribution,
and administrative services performed on behalf of an investment
entity are equal to the total amount of such receipts multiplied by
the average value of the interests in the investment entity where
the billing address of the owner is in Connecticut and divided by
the average value of the total interests in the investment entity.
The average value of such interests is calculated by adding the
value of such interests on the first day of the income year and
the value of such interests on the last day of the income year
and dividing that total by two.
Line 12 - Enter receipts for providing management, distribution,
and administrative services performed on behalf of a pension
fund or retirement account, which generally means a fund, trust,
plan, account, annuity, or contract established according to a
federal or state statute which is designed to provide pension
or retirement benefits. Connecticut receipts received from
management, distribution, and administrative services performed
on behalf of a pension fund or retirement account are equal to the
total amount of such receipts multiplied by the average number
of participants in such pension fund or retirement account with
a billing address in Connecticut and divided by average number
of total participants with an interest in such pension fund or
retirement account. The average number of such participants is
calculated by adding the number of participants on the first day
of the income year and the number of participants on the last
day of the income year and dividing that total by two.
Election: The taxpayer may elect to calculate its Connecticut
receipts based on the average fair market value of the funds
under management of the pension fund or retirement account
in each income year allocated to the commercial domicile of
the sponsor of the pension fund or retirement account (plus the
fair market value of funds allocated to the billing address of the
participant if there is no such sponsor.) The election shall be
irrevocable for five years and shall be applicable to all receipts
from management, distribution, or administrative services
performed for any pension fund or retirement account.
Line 13 - Other receipts are included in Connecticut receipts if
such other receipts are derived from a customer with a billing
address in Connecticut. Otherwise, use Form CT-1120A.
Line 14 - Add Lines 1 through 13 in Column A and Column B,
and enter the total.
Line 15 - Divide Line 14, Column A, by Line 14, Column B. Enter
the result here and on Form CT-1120, Corporation Business Tax
Return, Schedule A, Line 2.

Page 4 of 7

Worksheet A - Total Income from Investment Assets and Activities and Trading Assets and Activities
	1.	 Interest..................................................................................................................................... 	

1.	

00

	2.	 Dividends ................................................................................................................................ 	

2.	

00

	 3.	 Net gains (not less than zero) ................................................................................................. 	3.	

00

	 4.	 Investment securities ............................................................................................................... 	4.	

00

	 5.	 Account assets ....................................................................................................................... 	5.	

00

	 6.	 Federal funds .......................................................................................................................... 	6.	

00

	 7.	 Securities purchased and sold under agreement to resell or repurchase............................... 	7.	

00

	8.	 Options.................................................................................................................................... 	8.	

00

	 9.	 Future contracts....................................................................................................................... 	9.	

00

	10.	 Forward contracts ................................................................................................................... 	10.	

00

	11.	 Notional principal contracts (swaps, equities, foreign currency transactions) ........................ 	11.	

00

	12.	 Other income from investment assets and activities and trading assets and activities .......... 	12.	

00

	13.	 Amount by which interest from federal funds sold exceeds interest expense on
federal funds purchased ......................................................................................................... 	13.	

00

	14.	 Amount by which securities purchased under resale agreements exceeds interest
on securities sold under repurchase agreements ................................................................... 	14.	

00

	15.	 Amount by which the interest, dividends, gains, and other income from trading assets
and activities (including assets and activities in the matched book, in the arbitrage book,
and foreign currency transactions) exceeds the amount paid in lieu of interest, the amount
paid in lieu of dividends, and the losses from such assets and activities ............................... 	15.	

00

	16.	 Add Lines 1 through 15. Enter the total here and on Line 10, Column B, on the front
of the return. ........................................................................................................................... 	16.	

00

Form CT-1120A-FS (Rev. 12/17)

Page 5 of 7

Worksheet B - Determining Connecticut Receipts Under the Average Value Method
	1.	Add Worksheet A, Lines 1 through 12. .................................................................................... 	

1.	

00

	2.	Value of assets used to calculate income on Worksheet A, Lines 1 through 12, with a
regular place of business in Connecticut on the first day of the income year ......................... 	

2.	

00

	 3.	 Value of assets used to calculate income on Worksheet A, Lines 1 through 12, with a
regular place of business in Connecticut on the last day of the income year ......................... 	3.	

00

	 4.	 Add Line 2 and Line 3. ............................................................................................................. 	4.	

00

	 5.	 Divide Line 4 by 2. ................................................................................................................... 	5.	

00

	 6.	 Value of total assets used to calculate income on Worksheet A, Lines 1 through 12,
on the first day of the income year .......................................................................................... 	6.	

00

	 7.	 Value of total assets used to calculate income on Worksheet A, Lines 1 through 12,
on the last day of the income year........................................................................................... 	7.	

00

	 8.	 Add Line 6 and Line 7.............................................................................................................. 	8.	

00

	 9.	 Divide Line 8 by 2. ................................................................................................................... 	9.	

00

	 10.	 Divide Line 5 by Line 9. ........................................................................................................... 	10.	

00

	 11.	 Multiply Line 1 by Line 10. ....................................................................................................... 	11.	

00

	 12.	 Add Worksheet A, Line 13 and Line 14. .................................................................................. 	12.	

00

	 13.	 Value of assets used to calculate income on Worksheet A, Line 13 and Line 14, with a
regular place of business in Connecticut on the first day of the income year ......................... 	13.	

00

	 14.	 Value of assets used to calculate income on Worksheet A, Line 13 and Line 14, with a
regular place of business in Connecticut on the last day of the income year ......................... 	14.	

00

	 15.	 Add Line 13 and Line 14. ........................................................................................................ 	15.	

00

	 16.	 Divide Line 15 by 2. ................................................................................................................. 	16.	

00

	 17.	 Value of total assets used to calculate income on Worksheet A, Line 13 and Line 14,
on the first day of the income year .......................................................................................... 	17.	

00

	 18.	 Value of total assets used to calculate income on Worksheet A, Line 13 and Line 14, on the
last day of the income year ..................................................................................................... 	18.	

00

	 19.	 Add Line 17 and Line 18. ........................................................................................................ 	19.	

00

	 20.	 Divide Line 19 by 2. ................................................................................................................. 	20.	

00

	 21.	 Divide Line 16 by Line 20. ....................................................................................................... 	21.	

00

	 22.	 Multiply Line 12 by Line 21. ..................................................................................................... 	22.	

00

	 23.	 Enter the amount from Worksheet A, Line 15. ........................................................................ 	23.	

00

	 24.	 Value of assets used to calculate income on Worksheet A, Line 15, with a regular
place of business in Connecticut on the first day of the income year ..................................... 	24.	

00

	 25.	 Value of assets used to calculate income on Worksheet A, Line 15, with a regular
place of business in Connecticut on the last day of the income year ...................................... 	25.	

00

	 26.	 Add Line 24 and Line 25. ........................................................................................................ 	26.	

00

	 27.	 Divide Line 26 by 2. ................................................................................................................. 	27.	

00

	 28.	 Value of total assets used to calculate income on Worksheet A, Line 15, on the first
day of the income year............................................................................................................. 	28.	

00

	 29.	 Value of total assets used to calculate income on Worksheet A, Line 15, on the last
day of the income year ............................................................................................................ 	29.	

00

	 30.	 Add Line 28 and Line 29. ........................................................................................................ 	30.	

00

	 31.	 Divide Line 30 by 2. ................................................................................................................. 	31.	

00

	 32.	 Divide Line 27 by Line 31. ....................................................................................................... 	32.	

00

	 33.	 Multiply Line 23 by Line 32. ..................................................................................................... 	33.	

00

	 34.	 Add Lines 11, 22, and 33. Enter the total here and on Line 10, Column A, on the front
of the return if checking the Average Value Method box. ........................................................ 	34.	

00

Form CT-1120A-FS (Rev. 12/17)

Page 6 of 7

Worksheet C - Determining Connecticut Receipts Under the Gross Income Method
	1.	Add Worksheet A, Lines 1 through 12. .....................................................................................	

1.	

00

	2.	Gross income from the assets used to calculate income on Worksheet A, Lines 1 through 12,
which are properly assigned to a regular place of business in Connecticut .............................	

2.	

00

	 3.	 Total gross income from the assets used to calculate income on Worksheet A, Lines 1
through 12 .................................................................................................................................	3.	

00

	 4.	 Divide Line 2 by Line 3. .............................................................................................................	4.	

00

	 5.	 Multiply Line 1 by Line 4. ..........................................................................................................	5.	

00

	 6.	 Add Worksheet A, Line 13 and Line 14. ....................................................................................	6.	

00

	 7.	 Gross income derived from assets used to calculate income on Worksheet A, Line 13 and
Line 14, which are properly assigned to a regular place of business in Connecticut ............... 	7.	

00

	 8.	 Total gross income from the assets used to calculate income on Worksheet A, Line 13 and
Line 14 ......................................................................................................................................	8.	

00

	 9.	 Divide Line 7 by Line 8. ............................................................................................................	9.	

00

	 10.	 Multiply Line 6 by Line 9. ..........................................................................................................	10.	

00

	 11.	 Enter the amount from Worksheet A, Line 15. ..........................................................................	11.	

00

	 12.	 Gross income derived from assets used to calculate income on Worksheet A, Line 15
which are properly assigned to a regular place of business in Connecticut .............................	12.	

00

	 13.	 Total gross income from the assets used to calculate income on Worksheet A, Line 15 .......... 	13.	

00

	 14.	 Divide Line 12 by Line 13. ........................................................................................................	14.	

00

	 15.	 Multiply Line 11 by Line 14. .......................................................................................................	15.	

00

	 16.	 Add Lines 5, 10, and 15. Enter the total here and on Line 10, Column A, on the front
of the return if checking the Gross Income Method box. ..........................................................	16.	

00

Form CT-1120A-FS (Rev. 12/17)

Page 7 of 7