N-20 Sch. O&P: Schedules O and P (Form N-20), Allocation and Apportionment of Income (Revision 2020)
Hawaii · Hawaii DoTax · Used for tax years 2024, 2025, 2026
Schedules O and P (Form N-20) determine a partnership’s business income or loss apportioned to Hawaii. They report income and apportionment factors based on property, payroll, and sales in Hawaii and everywhere, and are attached to Form N-20.
Who files this form
A partnership must complete Schedules O and P if it had ordinary income or loss from trade or business activities both within and outside Hawaii. These schedules determine the business income or loss apportioned to Hawaii.
Each partnership must specifically state the income attributable to Hawaii and the income attributable everywhere for each partner.
What you'll need
Have the following information available to complete the schedules:
- Form N-20, page 1, line 16, for ordinary business income or loss for Hawaii tax purposes.
- Property values for Hawaii and everywhere at the beginning and end of the tax year. Use original cost for owned property and net annual rent multiplied by eight for the entries marked for leasehold interests and rented property.
- Total compensation paid in Hawaii and everywhere during the tax period.
- Total sales in Hawaii and everywhere during the tax period.
- Amounts reported on returns or reports to other states under the Uniform Division of Income for Tax Purposes Act, for the comparison on Schedule P, line 9.
Federal Form 8825 may be attached to Form N-20 as a schedule of expenses for net rents and royalties from real property located in Hawaii.
How to file
Attach Schedules O and P to Form N-20.
- Complete Schedule P to calculate the property, payroll, and sales factors and their average.
- Transfer Schedule P, line 8, to Schedule O, line 2.
- On Schedule O, multiply the ordinary income or loss on line 1 by the apportionment factor on line 2.
- Transfer the result from Schedule O, line 3, to Form N-20, Schedule K, line 1, column b.
The supplied form text does not give a mailing address or e-filing directions.
Common mistakes
- Do not round percentages to fewer places. The form says to compute all percentages to five decimal places, shown as .00000%.
- Do not forget to attach these schedules to Form N-20.
- Do not leave a “No” answer on Schedule P, line 9, unexplained. The form asks for an explanation if the listed amounts differ from those reported to other states.
Questions people ask
How is the apportionment factor calculated?
Normally, add the property, payroll, and sales factors and divide by three. If a factor has a zero denominator, omit that factor from the total and reduce the divisor by one for each such factor.
How is rented property valued?
Rented property is generally valued at eight times the net annual rental rate. If the rental period is less than 12 months, the rent paid for the actual rental period is treated as the annual rental rate for the tax period.
What if the standard calculation does not fairly represent the partnership’s Hawaii business activity?
The partnership may request separate accounting, exclusion of one or more factors, inclusion of additional factors, or another method that accurately reflects its Hawaii business activity. Complete Schedules O and P to show that computation.
Are receipts from an occasional sale of a fixed asset included in the sales factor?
Substantial gross receipts from an occasional sale of a fixed asset used in the regular course of business must be excluded. The form gives the sale of a factory or plant as an example.