Partnership & S Corporation Apportionment

Partnerships and S corporations doing business in more than one state must apportion their income as described below. This ensures income is reported to the state in which the income is earned and taxable. Partnerships and S corporations doing business only in Colorado will source 100% of its income to Colorado and will not apportion their income.

Income is generally apportioned in one of two ways:

  • Single-sales factor
  • Colorado sourced income of nonresident individuals method

Single-Sales Factor

Income is generally apportioned using the single–sales method. When using single-sales method of apportionment, all business income must be apportioned using the single-sales factor. Nonbusiness income may either be directly allocated to the appropriate state or treated as business income, subject to the single– sales factor apportionment. Complete and include Part IV to your return if you are apportioning income using the single-sales factor apportionment method. 

Colorado-Sourced Income of a Nonresident

Colorado sourced income apportioned under §39-22-109, C.R.S., is computed by including income that is determined to be from Colorado sources. Include a schedule to form DR 0106 explaining how Colorado sourced income was determined. Also include Part III of your return. Modifications may be sourced to Colorado only to the extent that the income to which they relate is sourced to Colorado.