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                                               CITY OF MUSKEGON
                                               CORPORATION INCOME TAX RETURN
                                   INSTRUCTIONS FOR FORM M-1120 FOR CORPORATIONS
                                               WITH BUSINESS ACTIVITY IN MUSKEGON
Direct Deposit                                                                           INSTRUCTIONS FOR PAGE 1
Direct deposit refund of overpayments is available for corporate tax returns.            Lines 1-9. Follow the instructions printed on the return form.
Corporations Required to File                                                            Lines 11 and 12. Follow the instructions printed on the return form.
Every corporation doing business in the city, whether or not it has an office or         RENAISSANCE ZONE OR TOOL & DIE RECOVERY ZONE DEDUCTION
place of business in the city, is required to file an annual City of Muskegon            Line 10. A corporation located and doing business in a Muskegon Renaissance
Corporation Income Tax Return, Form M-1120.                                              or Tool & Die Recovery Zone may be eligible to claim a tax deduction. Corporations
Corporations cannot elect to file and be taxed as partnerships. Subchapter S             qualified to claim Renaissance or Tool & Die Recovery Zone deduction must
corporations are treated as C Corporations.                                              calculate the deduction or M-1120 RZ form. A corporation is not qualified to claim
                                                                                         the deduction if the corporation is delinquent for any Michigan or local taxes.
The Muskegon Income Tax Ordinance specifically exempts financial institutions            Contact the Income Tax Department to request the Schedule RZ.
from taxation. “Financial Institutions” are defined as state and national banks,
trust companies, building and loan associations, savings and loan associations,          PAYMENTS AND CREDITS
credit unions, safety and collateral deposit companies, and any other association,       Line 13. Enter the total of estimated payments for the year of return, amounts
joint stock company or corporation at least 90% of whose assets consist of               carried forward from the previous year M-1120, amounts paid with an extension
intangible personal property and at least 90% of whose gross income consists of          request and credit for tax paid by a partnership on behalf of the corporation on
dividends, interest or other charges resulting from the use of money or credit.          line 13.
Mailing of Return Forms                                                                  OVERPAYMENT OF TAX
Corporation income tax return forms are normally mailed to every corporation             Line 14. If the total tax payments (line 13) are greater than tax due (line 12)
that filed a return for the previous tax year.                                           subtract line 12 from line 13 and enter the tax overpayment.
Tool & Die Recovery Zone Deduction                                                       Line 15. Enter all or other portion of the overpayment to be applied to the 2007
A corporation located and doing business in a Muskegon Tool & Die Recovery               estimated tax as a credit forward.
Zone may be eligible to claim the Tool & Die Recovery Zone deduction. This               Line 16. Donate your refund to a city project.
deduction allows the corporation to deduct the portion of their income earned in
a Muskegon Tool & Die Recovery Zone from income subject to Muskegon income               Line 17. Enter all or the portion of the overpayment to be refunded via a paper
tax. A taxpayer is not qualified to claim the deduction if the corporation is delinquent refund check.
for any Michigan or local taxes. A Muskegon income tax return must be filed to
claim this deduction. Schedule RZ of M-1120 is required to be attached to the            Line 18. Enter all or the portion of the overpayment to be refunded via a direct
corporation return when claiming the Tool & Die Recovery Zone deduction.                 deposit and enter the following: routing number, type of account and account number.
                                                                                         An overpayment refund will be issued via a paper check or direct deposit. A
Tax Rate                                                                                 refund may not be split. Please allow 90 days before making any inquiry relative
1.0% effective July 1, 1993.                                                             to a refund.
Filing Date                                                                              TAX DUE
Taxpayers on a calendar year are required to file by April 30th. Those on a fiscal       Line 19. If tax due (line 12) is greater than the total tax payments (line 13) subtract
year must file by the last day of the fourth month following the end of the fiscal       line 13 from line 12 and enter the tax due. Tax due must be paid when filing the
year. Returns shall be for the same calendar year, fiscal year or other accounting       return. Make check or money order payable to TREASURER, CITY OF
period as the taxpayer uses for federal income tax purposes.                             MUSKEGON, and mail the remittance with the return to CITY OF MUSKEGON
                                                                                         INCOME TAX DEPARTMENT, PO BOX 29, MUSKEGON, MI 49443-0029.
Remittance
The tax due must be paid when filing the return. Make check or money order               INSTRUCTIONS FOR PAGE 2
payable to:                                                                              SCHEDULE S
         TREASURER, CITY OF MUSKEGON                                                     S corporations must file as C corporations. Schedule S is used to reconcile the
                                                                                         amount reported on Line 1, Page 1 of M-1120 with federal Form 1120S and
Mailing Address                                                                          Schedule K (Form 1120S).
Mail your return and remittance to:
         CITY OF MUSKEGON INCOME TAX DEPARTMENT                                          SCHEDULE C
         PO BOX 29                                                                       Column 1 Line 1. Enter on Line 1 the nondeductible portion of a loss from the
         MUSKEGON, MI 49443-0029                                                         sale or exchange of property acquired prior to July 1, 1993. The portion of the
                                                                                         loss occurring prior to the inception of the Ordinance, July 1, 1993 is not
Effective Date of Tax                                                                    recognized. The amount of loss occurring prior to July 1, 1993 is determined by
The City of Muskegon income tax became effective July 1, 1993. Corporations              either (1) computing the difference between the total gain or loss for the property
are required to pay the tax each year on that part of their net income attributable      as reported for federal income tax purposes and the Muskegon taxable portion of
to business activity conducted in Muskegon, commencing with their first year             the loss computed by substituting the fair market value of the property on July 1,
ending after July 1, 1993.                                                               1993 (the June 30, 1993, closing price for traded securities) for the basis in
                                                                                         determining gain or loss; or (2) by multiplying the loss for the entire holding period,
Extensions                                                                               as computed for federal income tax purposes, by a fraction, the numerator being
Upon filing the form APPLICATION FOR EXTENSION OF TIME TO FILE                           the number of months the property was held prior to July 1, 1993 and denominator
MUSKEGON INCOME TAX RETURNS (available on the City’s website) on or                      being the total number of months the property was held. See Column 2, Line 5 for
before the date for filing a return, the Income Tax Administrator may extend the         instructions relative to gains from sales or exchanges of property acquired prior
time for filing up to six months. When an extension is requested, the tentative tax      to July 1, 1993.
must be paid.
                                                                                         Capital losses from U.S. Government obligations included in income reported on
When an extension form is filed, it may be assumed that the extension is                 Page 1, Line 1 are not deductible. Remove these losses by including them in the
automatically granted unless otherwise notified. When the return is filed, a copy        amount reported on Line 1.
of the application for extension must be attached. If the return is filed after the
extended due date, penalty and interest will apply from the original due date.           Column 1, Line 4. Enter the losses from entities filing as partnerships that are
                                                                                         included in taxable income reported on Page 1, Line 1.
                                                                                         Column 2, Line 1. Enter the amount of interest income from obligations of the
                                                                                         United States, the states or subordinate units of government of the state that is
                                                                                         included in taxable income reported on Page 1, Line 1.

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Column 2, Line 2. If you reported dividend income, enter on this line the amount Line 2. Enter on this line the net capital loss carryover applicable to Muskegon.
of the dividend-received deduction allowed by the federal Internal Revenue Code Net capital losses sustained by a corporation for periods subsequent to July 1,
for dividends received. 1993 may be carried forward in the same manner as under the federal Internal
Revenue Code. No deduction will be allowed for capital losses sustained prior
Column 2, Line 3 and Line 4. Taxpayers may deduct income war profits and to July 1, 1993. If all business was not conducted in Muskegon in the year in
excess profits taxes imposed by foreign countries or possessions of the United which the loss was sustained, use the business allocation percentage formula
States, allocable to income included in taxable net income, any part of which to arrive at the deductible portion of the loss. Attach a schedule showing your
would be allowable as a deduction in determining federal taxable income under computation for the amount reported on this line.
the applicable provisions of the federal Internal Revenue Code.
If a foreign tax credit, rather than a foreign tax deduction, was claimed on your Line 3. Corporations who are partners in a business activity taxed as a
federal return, enter on line 3 the portion of the foreign tax credit which was partnership that has business activity in Muskegon must enter on this line their
grossed up and included in your Muskegon return as dividends received. portion of the Muskegon taxable income or loss from the partnership(s). Attach
Enter on Line 4 the “foreign taxes paid or accrued” portion of the foreign tax a schedule showing your computation for the amount reported on this line
credit claimed on your federal return, not in excess of the federal limitations including the name and taxpayer identification number of the partnership(s).
thereon. The balance of your foreign tax credit is not deductible. INFORMATION AND PREPARER AUTHORIZATION
Column 2, Line 5. Enter on Line 5 the nontaxable portion of a gain from the Third Party Designee. If the “yes” box is marked, the corporation is authorizing
sale or exchange of property acquired prior to July 1, 1993. The portion of the the Muskegon Income Tax Department to call the preparer to answer any
gain occurring prior to the inception of the Ordinance is not recognized. Refer questions that may arise during the processing of its return. The corporation is
to the instructions for Schedule C, Column 1, Line 1 for computation instructions. also authorizing the preparer: to give the Department any information that is
missing from the return; to call the Department for information about the
Capital gains from U.S. Government obligations included in income reported processing of the return or the status of any related refund or payments; and to
on Page 1, Line 1 are not taxable. Remove these gains by including them in the respond to certain notices that the corporation has shared with the preparer
amount reported on Line 5. about math errors, offsets and return preparation.
Column 2, Line 6. Enter income from entities filing as partnerships that are
included in taxable income reported on Page 1, Line 1. DECLARATION AND PAYMENT OF ESTIMATED TAX
1. WHO MUST FILE: Every corporation subject to the tax on all or part of its
SCHEDULE D net profits must file a Declaration of Estimated Income Tax (Form M-1040ES).
The business allocation percentage formula must be used by corporations with A Declaration is not required from corporations if the estimated tax is two
business activity both within and outside the City of Muskegon who have not hundred fifty dollars ($250.00) or less.
been approved to use the separate accounting method. If a corporation has a 2. WHEN AND WHERE TO FILE AND PAY:
property and payroll percentage that is 100% Muskegon, you do not have a A. Declaration for Calendar Year. The Declaration for a calendar year must
business activity outside the City of Muskegon and may not allocate sales. Enter be filed on or before April 30th of that year. The estimated tax is payable
100% on Schedule D, Line 5. in equal installments on or before April 30th, June 30th, September
30th and January 31st.
Line 1. Enter in Column 1 the average net book value of all real and tangible B. Declaration for Fiscal Year: the Declaration for a year, or period differing
personal property owned by the business, regardless of location, and in column from the calendar year must be filed within four (4) months after the
2 show the net book value of the real and tangible personal property owned beginning of each fiscal year or period. For example, if a fiscal year
and located or used in the City of Muskegon. The average net book value of begins on April 1st, the Declaration will be due on July 31st. Remaining
real and tangible personal property may be determined by adding the net book installments will then be due on the last day of the 6th, 9th and 13th
values at the end of the year and dividing the sum thus obtained by two. months after the beginning of the fiscal year.
Line 1a. Enter in Column 1 the gross annual rent multiplied by 8 for all rented C. Filing and Payment: The Declaration should be filed with the Muskegon
real property regardless of location. In Column 2 show the gross annual rent City Income Tax Department, P.O. Box 29, Muskegon, MI 49443-0029.
multiplied by 8 for rented real property located in the City of Muskegon. Gross The first installment payment must accompany the Declaration. The
annual rent refers to real property only, rented or leased during the taxable estimated tax may be paid in full with the Declaration.
period, and should include the actual sums of money or other consideration
paid, directly or indirectly, by the taxpayer for the use or possession of such ASSISTANCE
property. If you have questions, would like to request forms, or need assistance in preparing
your return call (231) 724-6770. Questions by mail should be directed to Muskegon
Line 2. Enter in Column 1 the total compensation paid to all employees during City Income Tax Department, P.O. Box 29, Muskegon, MI 49443-0029.
the year, and in Column 2 show the amount of compensation paid to employees
for work or services performed within the City of Muskegon during the year. WEBSITE
Line 3. Enter in Column 1 the total gross revenue from all sales or services rendered Income tax forms, instructions and additional information are available under
during the year, and in column 2 show the amount of revenue derived from sales the Income Tax Department section of the City of Muskegon website,
made or services rendered in the City of Muskegon during the year. If there is no www.shorelinecity.com/incometax.asp.
regularly maintained sales force outside of the city, this allocation factor must be
100% for businesses with no other business activity outside the city. NOTICE
These instructions are interpretations of the Muskegon Income Tax Ordinance.
Separate Accounting - The taxpayer may petition for, or the administrator may The Ordinance will prevail in any disagreement between the instructions and
require, use of the separate accounting method. If such method is petitioned, the Ordinance.
the administrator may require a detailed statement to determine whether the
net profits attributable to the city will be apportioned with reasonable accuracy.
Generally, a corporation that is unitary in nature (i.e., has central management,
purchasing, warehousing, advertising, etc.) cannot use separate accounting,
Taxpayers allocating on any basis other than separate accounting shall include
all interest, dividends and other non-operating income to arrive at the total
income subject to the allocation percentage.
Taxpayers using separate accounting shall include in income subject to tax a
proportionate share of dividends, interest and other non-operating income of
the total corporation. This type of income is apportioned to Muskegon activity
on the same basis as general administrative and overhead costs are apportioned.
SCHEDULE G
Line 1. Net operating losses carried forward are to be reported on this line.
There is no provision for carrying back losses to prior tax years. Carryover losses
are to be allocated to Muskegon at the percentage of business conducted in
Muskegon in the year in which the loss was sustained. If all business was not
conducted in Muskegon in the year in which the loss was sustained, use the
business allocation percentage formula to arrive at the deductible portion of
the loss. Attach a schedule showing your computation for the amount reported
on this line.

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20__ __ CITY OF MUSKEGON M-1120
CORPORATION INCOME TAX RETURN

or Fiscal Year Beginning____________, 20__ __ and ending____________ , ______

NAME FEDERAL EMPLOYER IDENTIFICATION NUMBER

ADDRESS (NUMBER AND STREET OR RURAL ROUTE)

CITY OR TOWN STATE ZIP CODE

A. Amended return? See instructions E. Initial Muskegon Return
B. Is this amended return as a result of a federal audit? F. Final Muskegon Return
C. If Yes, enter the Federal Determination date. G. Did you file a consolidated return with the IRS?
D. Is this a consolidated return? H. Short period

TAX COMPUTATION Round numbers to
nearest dollar
1. Taxable income before net operating loss deduction and special deductions
per U.S. 1120 or per Page 2, Schedule S, Line 5 (attach copy of Federal 1120
or 1120S and Schedule K) ........................................................................................................... 1
2. Enter items not deductible (from Page 2, Schedule C, Column 1, Line 5) ................................... 2
3. TOTAL (add Lines 1 and 2)........................................................................................................... 3
4. Enter items not taxable (from Page 2, Schedule C, Column 2, Line 7) ........................................ 4
5. TOTAL (Line 3 less Line 4) ........................................................................................................... 5
6. Apportionment percentage from Schedule D ............................. 6 %
7. TOTAL (multiply Line 5 by percentage on Line 6) ........................................................................ 7
8. ADJUSTMENTS: applicable portion of net operating loss carryover and/or capital
loss carryover and/or allocated partnership income .................................................................... 8
9. Net income ................................................................................................................................... 9
10. Renaissance Zone Deduction (attach Renaissance Zone Deduction Schedule)
and Tool & Die Recovery Zone Deduction.................................................................................... 10
11. TOTAL income subject to tax (Line 9 less Line 10) ...................................................................... 11
12. Tax (multiply Line 11 by 1%)......................................................................................................... 12

PAYMENTS AND CREDITS
13. Estimated payments, credits and other payments for tax year of the return (see instructions).......... 13

OVERPAYMENT, CREDIT FORWARD OR REFUND
14. If Line 13 is larger than Line 12, enter amount of Overpayment .................................................. 14
15. Amount to be credited to next year’s taxes................................................................................... 15
16. Amount to be donated to Annual Project...................................................................................... 16
17. Amount to be refunded (if amended, see instructions) via a refund check .................................. 17
18. Amount to be refunded via direct deposit to the following bank account
a. Routing number
b. Type of account Checking Savings
c. Account number........................................................................................................................ 18

TAX DUE
19. If Line 12 is larger than Line 13, enter amount of Tax Due
(Make check payable to: Treasurer, City of Muskegon) ................................................................ 19

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SCHEDULE S
Schedule S is used by Subchapter S corporations to reconcile the amount reported on Line 1, Page 1, with federal Form 1120S
and Schedule K of federal 1120S.
1. Ordinary income (loss) from trade or business (per federal 1120S) .................................................................................................1. ____________________
2. Income (loss) per Schedule K, federal 1120S, Lines 2 through 10...................................................................................................2. ____________________
3. Total income (loss) (add Lines 1 and 2) ............................................................................................................................................3. ____________________
4. Deductions per Schedule K, federal 1120S ......................................................................................................................................4. ____________________
5. Taxable income before NOL deduction and special deductions (subtract Line 4 from Line 3) Enter on Page 1, Line 1 ..................5. ____________________
SCHEDULE C
Schedule C is used for adjustments provided in the City Income Tax Ordinances. The period of time used to compute these
adjustments must be the same as the time period used to report income. These adjustments are allowed to the extent that they
are related to income reported on Page 1, Line 1.

COLUMN 1 - ADD ITEMS NOT DEDUCTIBLE COLUMN 2 - DEDUCT ITEMS DEDUCTIBLE
1. Nondeductible portion of loss, from sale of 1. Interest from obligations of the United States,
property acquired prior to 7/1/1993................ 1. ____________________ the states or subordinate units of government ....... 1. ____________________
2. All expenses (including interest) incurred in 2. Dividends received deduction ........................ 2. ____________________
connection with income not subject to 3. Foreign Dividend gross up ............................. 3. ____________________
City of Muskegon income tax ......................... 2. ____________________ 4. Foreign taxes paid or accrued deduction ....... 4. ____________________
3. City of Muskegon income tax paid or accrued ....... 3. ____________________ 5. Nontaxable portion of gain from sales of
4. Other (submit schedule) ................................. 4. ____________________ property acquired prior to 7/1/1993................ 5. ____________________
6. Other (submit schedule) ................................. 6. ____________________
5. Total additions (enter on Page 1, Line 2) ....... 5. ____________________ 7. Total Deductions (enter on Page 1, Line 4) .... 7. ____________________
SCHEDULE D
In the case of a taxpayer authorized by the Finance Director to use a special formula, attach computations and furnish the following:
A. Copy of approval letter B. Percentage used - enter here____________ and on Page 1, Line 6.
Are you electing to use the Multistate Tax Compact Provision? YES (if yes, attach schedules) NO
Located Located in Percentage
INCOME APPORTIONMENT Everywhere (Col. 1) City of Muskegon (Col. 2) (Col. 2 ÷ Col. 1))

1. Average net book value of real and tangible personal property.............................
A. Gross annual rent paid for real property multiplied by 8 ...................................
B. TOTAL (add Lines 1 and 1a) ............................................................................. %
2. Total wages, salaries, commissions and other compensation of all employees .................. %
3. Gross receipts from sales made or services rendered .......................................... %
4. Total (add Lines 1b, 2 and 3. You must compute a percentage for each line) ............................................................................................. %
5. Average* (enter here and on Page 1, Line 6).............................................................................................................................................. %
*In determining the average, divide Line 4 by 3. However, if a factor does not exist, divide the sum of the percentages by the number
of factors actually used.
SCHEDULE G - AFTER ALLOCATION ADJUSTMENTS
1. Allocated net operating loss deduction (enter as a negative amount) ..............................................................................................1. ____________________
2. Allocated capital loss carryover (enter as a negative amount) .........................................................................................................2. ____________________
3. Allocated partnership income (enter income as a positive and losses as a negative) .....................................................................3. ____________________
4. Total adjustments (add Lines 1 through 3) enter here and on Page 1, Line 8 ..................................................................................4. ____________________

Where incorporated ___________________________ Date incorporated ______________ Principal business activity (NAICS) _______________________
Address in City of Muskegon__________________________________ Contact Person _______________________________ Phone _________________
Total number of location(s) everywhere _________ Number of City location(s) included in this return ______________
Attach a list of addresses of City of Muskegon locations included in this return
THIRD PARTY DESIGNEE Do you want to allow another person to discuss this return with the Income Tax Department?
YES (complete the following) NO
Designee’s Name Phone
Under penalty of perjury, I declare that I have examined this return (including accompanying schedules and statements) and to the best of my knowledge and belief
it is true, correct and complete. If prepared by a person other than taxpayer, the declaration is based on all information of which the preparer has any knowledge.

SIGNATURE OF OFFICER DATE TITLE OF OFFICER

SIGNATURE OF OFFICER DATE TITLE OF OFFICER
DUE DATE: This return is due April 30th or at the end of the fourth month after the close of your tax year.
MAIL TO: CITY OF MUSKEGON
PO BOX 29
MUSKEGON MI 494443-0029

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