Schedule ACA: Air Carrier Apportionment (2024)

Who files this form

Qualifying air carriers must use this alternate method to apportion their business income to Arizona. The taxpayer must be engaged in air commerce, meaning transporting people or property for hire by aircraft in interstate, intrastate, or international transportation.

For Form 120 combined or consolidated returns, the combined group or Arizona affiliated group must use this method if 50 percent or more of the taxpayer’s gross income comes from air commerce. A single apportionment ratio applies to all group members.

Include Schedule ACA with the tax return.

What you'll need

Have the following information ready to complete Schedule ACA:

• Your name as shown on Form 99T, 120, 120S, 120X, or 165, and your Employer Identification Number (EIN).
• Revenue aircraft miles flown within Arizona for flights beginning or ending in Arizona.
• Total revenue aircraft miles flown everywhere.
• The applicable tax return, which must include this schedule.

How to file

Include Schedule ACA with your tax return.

1. On line 1, enter revenue aircraft miles flown within Arizona for flights beginning or ending in Arizona.
2. On line 2, enter total revenue aircraft miles flown everywhere.
3. Divide line 1 by line 2 and carry the quotient to six decimal places. Enter it on line 3.

Also enter the line 3 ratio in the applicable location:

• Form 99T: page 1, line 4.
• Form 120: page 1, line 9.
• Form 120S: page 1, line 7, and Schedule K-1(NR), column (b).
• Form 120X: page 1, line 9(c).
• Form 165: Schedule K-1(NR), column (b).

Common mistakes

• Leaving out the schedule: The form reminds filers to include Schedule ACA with the tax return.

Questions people ask

What does “air commerce” mean?

It means transporting people or property for hire by aircraft in interstate, intrastate, or international transportation.

Which miles belong in the Arizona numerator?

Use revenue aircraft miles flown within Arizona by the taxpayer’s aircraft for flights beginning or ending in Arizona. The denominator is total revenue aircraft miles flown by the taxpayer’s aircraft everywhere.

What are “revenue aircraft miles flown”?

They are aircraft miles flown in revenue service. Aircraft miles are calculated using airport-to-airport distances for each flight stage actually completed, whether or not the flight followed the scheduled pattern. Operation to a flag stop counts as a completed stage even if no landing occurs.

How are miles calculated when airport-to-airport distances do not apply?

Multiply the normal cruising speed for the aircraft type by the airborne hours.

How many decimal places should the apportionment ratio have?

Divide line 1 by line 2 and carry the quotient to six decimal places.

Official sources

• https://azdor.gov/forms