Collapse to view only § 3060.40 - Calculation of the assumed Federal income tax.
- § 3060.1 - Scope.
- § 3060.10 - Costing.
- § 3060.11 - Valuation of assets.
- § 3060.12 - Asset allocation.
- § 3060.13 - Valuation of liabilities.
- § 3060.14 - Competitive products enterprise statement of allocated assets and liabilities.
- § 3060.20 - Reports.
- § 3060.21 - Income report.
- § 3060.22 - Financial status report.
- § 3060.23 - Identified property and equipment assets report.
- § 3060.24 - Competitive products fund report.
- § 3060.30 - Statement of allocated assets and liabilities for competitive products.
- § 3060.31 - Initial filing.
- § 3060.40 - Calculation of the assumed Federal income tax.
- § 3060.41 - Supporting documentation.
- § 3060.42 - Commission review.
- § 3060.43 - Annual transfer from competitive products fund to Postal Service fund.
§ 3060.1 - Scope.
The rules in this part are applicable to the Postal Service's theoretical competitive products enterprise developed pursuant to 39 U.S.C. 2011 and 3634 and to the Postal Service's obligation to calculate annually an assumed Federal income tax on competitive products income and transfer annually any such assumed Federal income tax due from the Competitive Products Fund to the Postal Service Fund.
§ 3060.10 - Costing.
(a) The assumed taxable income from competitive products for the Postal Service's theoretical competitive products enterprise for a fiscal year shall be based on total revenues generated by competitive products during that year less the costs identified in paragraph (b) of this section calculated using the methodology most recently approved by the Commission.
(b) The net income for the Postal Service's theoretical competitive products enterprise shall reflect the following costs:
(1) Attributable costs, including volume-variable costs, product-specific costs, and those inframarginal costs calculated as part of a competitive product's incremental costs; and
(2) The appropriate share of institutional costs assigned to competitive products by the Commission pursuant to 39 U.S.C. 3633(a)(3).
§ 3060.11 - Valuation of assets.
For the purposes of 39 U.S.C. 2011, the total assets of the Postal Service theoretical competitive products enterprise are the greater of:
(a) The percentage of total Postal Service revenues and receipts from competitive products times the total net assets of the Postal Service, or
(b) The net assets related to the provision of competitive products as determined pursuant to § 3060.12.
§ 3060.12 - Asset allocation.
Within 6 months of January 23, 2009, and for each fiscal year thereafter, the Postal Service will develop the net assets of the theoretical competitive products enterprise as follows:
(a) Identify all asset accounts within the Postal Service's Chart of Accounts used solely for the provision of competitive products.
(b) Identify all asset accounts within the Postal Service's Chart of Accounts used solely for the provision of market dominant products.
(c) The portion of asset accounts in the Postal Service's Chart of Accounts that are not identified in either paragraph (a) or paragraph (b) of this section shall be assigned to the Postal Service theoretical competitive products enterprise using a method of allocation based on appropriate revenue or cost drivers approved by the Commission.
(d) Within 6 months of January 23, 2009, the Postal Service shall submit to the Commission for approval a proposed methodology detailing how each asset account identified in the Chart of Accounts shall be allocated to the theoretical competitive products enterprise and provide an explanation in support of each allocation.
(e) If the Postal Service desires to change the methodologies outlined above, it shall utilize the procedures provided in § 3050.11 of this chapter.
§ 3060.13 - Valuation of liabilities.
Within 6 months of January 23, 2009, and for each fiscal year thereafter, the Postal Service will develop the liabilities of the theoretical competitive products enterprise as follows:
(a) Identify all liability accounts within the Postal Service's Chart of Accounts used solely for the provision of competitive products.
(b) Identify all liability accounts within the Postal Service's Chart of Accounts used solely for the provision of market dominant products.
(c) The portion of liability accounts in the Postal Service's Chart of Accounts that are not identified in either paragraph (a) or paragraph (b) of this section shall be assigned to the theoretical competitive products enterprise using a method of allocation based on appropriate revenue or cost drivers approved by the Commission.
(d) Within 6 months of the effective date of these rules, the Postal Service shall submit to the Commission for approval a proposed methodology detailing how each liability account identified in the Chart of Accounts shall be allocated to the theoretical competitive products enterprise and provide an explanation in support of each allocation.
(e) If the Postal Service desires to change the methodologies outlined above, it shall utilize the procedures provided in § 3050.11 of this chapter.
§ 3060.14 - Competitive products enterprise statement of allocated assets and liabilities.
The Postal Service will report the assets and liabilities of the theoretical competitive products enterprise as computed under §§ 3060.12 and 3060.13 in the format as prescribed under § 3060.30 for each fiscal year starting with FY 2010.
§ 3060.20 - Reports.
(a) Beginning with reports for FY 2009, the Postal Service shall file with the Commission each of the reports required by this part by no later than 90 days after the close of each fiscal year. For FY 2008, the Postal Service may file these reports by January 15, 2009, with the exception of the report required by § 3060.24.
(b) Each report shall include workpapers that cite all numbers to primary sources and such other information needed to present complete and accurate financial information concerning the provision of competitive products.
(c) Each report shall utilize the same books of accounts and data collection systems used to produce the report required by part 3050 of this chapter.
(d) Each report shall include summary descriptions of computations used, assumptions made, and other relevant information in the form of notes to the financial statements.
(e) A one-time extension until January 15, 2009, shall be permitted for the submission of the reports due for fiscal year ending September 30, 2008.
(f) The accounting practices used by the Postal Service in the reports filed for FY 2008, as approved by the Commission, shall be used for all future reports until such time as they may be changed by the Commission. If the Postal Service desires to change such practices, it shall utilize the procedures provided in § 3050.11 of this chapter.
§ 3060.21 - Income report.
The Postal Service shall file an Income Report in the form and content of table 1 to § 3060.21.
Table 1 to § 3060.21—Competitive Products Income Statement—PRC Form CP-01
[$ in 000s]
| FY 20xx | FY 20xx-1 | Change
from SPLY | Percent
change from SPLY | Revenue: | $x,xxx | $x,xxx | $xxx | xx.x | (1) Mail and Services Revenues | xxx | xxx | xx | xx.x | (2) Investment Income | x,xx | x,xxx | xxx | xx.x | (3) Total Competitive Products Revenue | Expenses: | x,xxx | (4) Volume-Variable Costs | x,xxx | x,xxx | xxx | xx.x | (5) Product Specific Costs | x,xxx | x,xxx | xxx | xx.x | (6) Incremental Inframarginal Costs | x,xxx | x,xxx | xxx | xx.x | (7) Total Competitive Products Attributable Costs | x,xxx | x,xxx | xxx | xx.x | (8) Net Contribution Competitive Products Market Tests | x,xxx | x,xxx | xxx | xx.x | (9) Net Income Before Institutional Cost Contribution | x,xxx | x,xxx | xxx | (10) Required Institutional Cost Contribution | x,xxx | x,xxx | xxx | x.x.x | (11) Net Income (Loss) Before Tax | x,xxx | x,xxx | xxx | xx.x | (12) Assumed Federal Income Tax | x,xxx | x,xxx | xxx | xx.x | (13) Net Income (Loss) After Tax | x,xxx | x,xxx | xxx | xx.x | Line (1): Total revenues from Competitive Products volumes and Ancillary Services. | Line (2): Income provided from investment of surplus Competitive Products revenues. | Line (3): Sum total of revenues from Competitive Products volumes, services, and investments. | Line (4): Total Competitive Products volume-variable costs as shown in the Cost and Revenue Analysis (CRA) report. | Line (5): Total Competitive Products product-specific costs as shown in the CRA report. | Line (6): Inframarginal costs calculated as part of total Competitive Products incremental costs as shown in ACR Library Reference “Competitive Product Incremental and Group Specific Costs” (Currently NP10). | Line (7): Sum total of Competitive Products costs (sum of lines 4, 5, and 6). | Line (8): Net Contribution Competitive Products Market Tests as shown in the Annual Compliance Report. | Line (9): Difference between Competitive Products total revenues and attributable costs and Market Tests Contributions (line 3 less line 7 plus line 8). | Line (10): Minimum amount of Institutional cost contribution required under 39 CFR 3035.7 of this chapter. | Line (11): Line 9 less line 10. | Line (12): Total assumed Federal income tax as calculated under 39 CFR 3060.40. | Line (13): Line 11 less line 12. |
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§ 3060.22 - Financial status report.
The Postal Service shall file a Financial Status Report in the form and content of Table 2, below.
Table 2—Annual Summary of Competitive Products Financials—PRC Form CP-02
[$ in 000s]
| Beginning value | Change from prior year | Ending value | (1) Cumulative Net Income (Loss) After Assumed Federal Income Tax | (2) Total Financial Obligations (List of Financial Obligations) | (3) Total Financial Investments (List of Financial Investments) | Line 1: Beginning Value: Sum total of Net Income (Loss) as of October 1 of Reportable Fiscal Year. | Change from Prior Year: Amount of Net Income (Loss) of Reportable Fiscal Year. | Ending Value: Sum of Beginning Value and the Change from Prior Year. | Line 2: Beginning Value: Sum total of Financial Obligations as of October 1 of Reportable Fiscal Year. | Change from Prior Year: Amount of Net Financial Obligations of Reportable Fiscal Year. | Ending Value: Sum of Beginning Value and the Change from Prior Year. | Line 3: Beginning Value: Sum total of Financial Investments as of October 1 of Reportable Fiscal Year. | Change from Prior Year: Amount of Net Financial Investments of Reportable Fiscal Year. | Ending Value: Sum of Beginning Value and the Change from Prior Year. |
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§ 3060.23 - Identified property and equipment assets report.
The Postal Service shall file an Identified Property and Equipment Assets Report in the form and content of Table 3, below.
Table 3—Competitive Products Property and Equipment Assets—PRC Form CP-03
[$ in 000s]
| Finance No. | Finance
location | Asset
identifier | Asset
description | Cost | Accumulated depreciation | Net book value | Total | $x,xxx | $x,xxx | $x,xxx |
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§ 3060.24 - Competitive products fund report.
Within 90 days of the close of each fiscal year the Postal Service will provide the most recent report of the activity of the Competitive Products Fund as provided to the Secretary of the Treasury under 39 U.S.C. 2011(i)(1).
§ 3060.30 - Statement of allocated assets and liabilities for competitive products.
(a) The Postal Service shall file a Statement of Allocated Assets and Liabilities for Competitive Products in the form and content of Table 4, below.
Table 4—Statement of Allocated Assets and Liabilities for Competitive Products—PRC Form CP-04
[$ in millions]
| USPS annual report | FY20XX
competitive products | FY 20XX-1 competitive products | Distributed on basis of: | Total net assets | Cash and Cash Equivalents | $x,xxx | $x,xxx | $x,xxx | Net Accounts Receivable | x,xxx | x,xxx | x,xxx | Supplies, Advances and Prepayments | x,xxx | x,xxx | x,xxx | Appropriations Receivable—Revenue Forgone | x,xxx | x,xxx | x,xxx | Total Current Assets | x,xxx | x,xxx | x,xxx | Property and Equipment: | Buildings | x,xxx | x,xxx | x,xxx | Leasehold Improvements | x,xxx | x,xxx | x,xxx | Equipment | x,xxx | x,xxx | x,xxx | Land | x,xxx | x,xxx | x,xxx | Accumulated Depreciation | x,xxx | x,xxx | x,xxx | Construction in Progress | x,xxx | x,xxx | x,xxx | Total Property and Equipment, Net | x,xxx | x,xxx | x,xxx | Total Assets | $x,xxx | $x,xxx | $x,xxx | Total Assets Determined from 39 U.S.C. 2011(e)(5) | $x,xxx | $x,xxx | $x,xxx | Total net liabilities | Liabilities | Current Liabilities: | Compensation and Benefits | x,xxx | x,xxx | x,xxx | Payables and Accrued Expenses | x,xxx | x,xxx | x,xxx | Customer Deposit Accounts | x,xxx | x,xxx | x,xxx | Deferred Revenue-Prepaid Postage | x,xxx | x,xxx | x,xxx | Outstanding Postal Money Orders | x,xxx | x,xxx | x,xxx | Prepaid Box Rent and Other Deferred Revenue | x,xxx | x,xxx | x,xxx | Debt | x,xxx | x,xxx | x,xxx | Non-Current Liabilities: | x,xxx | x,xxx | x,xxx | Workers' Compensation | x,xxx | x,xxx | x,xxx | Employees Accumulated Leave | x,xxx | x,xxx | x,xxx | Deferred Appropriation and Other Revenue | Long-Term Portion of Capital Lease Obligations | x,xxx | x,xxx | x,xxx | Deferred Gains on Sales of Property | x,xxx | x,xxx | x,xxx | Contingent Liabilities and Other | x,xxx | x,xxx | x,xxx | Total Liabilities | x,xxx | x,xxx | x,xxx |
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(b) The Statement of Allocated Assets and Liabilities for Competitive Products shall detail the analysis and selection of methods of allocation of total assets and liabilities to the competitive products.
§ 3060.31 - Initial filing.
The due date for filing the initial Statement of Allocated Assets and Liabilities for Competitive Products is 90 days after the close of FY 2010.
§ 3060.40 - Calculation of the assumed Federal income tax.
(a) The assumed Federal income tax on competitive products income shall be based on the Postal Service theoretical competitive products enterprise income statement for the relevant year and must be calculated in compliance with chapter 1 of the Internal Revenue Code by computing the tax liability on the taxable income from the competitive products of the Postal Service theoretical competitive products enterprise at the applicable corporate tax rate.
(b) The end of the fiscal year for the annual calculation of the assumed Federal income tax on competitive products income shall be September 30.
(c) The calculation of the assumed Federal income tax due shall be submitted to the Commission no later than the January 15 following the close of the fiscal year referenced in paragraph (b) of this section.
(d) No estimated Federal income taxes need to be calculated or paid.
(e) No state, local, or foreign income taxes need to be calculated or paid.
§ 3060.41 - Supporting documentation.
(a) In support of its calculation of the assumed Federal income tax, the Postal Service shall file detailed schedules reporting the Postal Service theoretical competitive products enterprise assumed taxable income, effective tax rate, and tax due.
(b) Adjustments made to book income, if any, to arrive at the assumed taxable income for any year shall be submitted to the Commission no later than January 15 of the following year.
§ 3060.42 - Commission review.
(a) Interested persons shall be provided an opportunity to comment on the filing of the calculation of the assumed Federal income tax and supporting documentation.
(b) The Commission will review the calculation of the assumed Federal income tax submitted pursuant to § 3060.40, the supporting documentation submitted pursuant to § 3060.41, and any comments. The Commission then will issue an order either approving the calculation of the assumed Federal income tax for that tax year or take such other action as the Commission deems appropriate, including, but not limited to, directing the Postal Service to file additional supporting materials.
(c) The Commission will issue such order no later than 6 months after the Postal Service's filing pursuant to § 3060.40.
(d) Notwithstanding paragraph (b) of this section, if the Commission determines within 3 years of its submission that the Postal Service's calculation of an assumed Federal income tax is incomplete, inaccurate, or otherwise deficient, the Commission will notify the Postal Service in writing and provide it with an opportunity to cure or otherwise explain the deficiency. Upon receipt of the Postal Service's responsive pleading, the Commission may order such action as it deems appropriate.
§ 3060.43 - Annual transfer from competitive products fund to Postal Service fund.
(a) The Postal Service must on an annual basis transfer the assumed Federal income tax due on competitive products income from the Competitive Products Fund to the Postal Service Fund.
(b) If the assumed taxable income from competitive products for a given fiscal year is positive, the assumed Federal income tax due, calculated pursuant to § 3060.40, shall be transferred to the Postal Service Fund no later than the January 15 following the close of the relevant fiscal year.
(c) If assumed taxable income from competitive products for a given fiscal year is negative, and:
(1) A payment was made to the Postal Service Fund for the previous tax year, a transfer equaling the lesser of the amount paid into the Postal Service Fund for the past 2 tax years or the amount of the hypothetical tax on the loss shall be made from the Postal Service Fund to the Competitive Products Fund no later than the January 15 following the close of the relevant fiscal year; or
(2) No payment has been made into the Postal Service Fund for the previous 2 tax years, the loss may be carried forward and offset against any calculated assumed Federal taxable income on competitive products income for 20 years.