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- No, corporations that are members of an in-state unitary business are not required to file a unitary combined report. An in-state unitary business is one where none of the corporations in the unitary combined group do any business in any state other than Virginia.
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The use of mandatory unitary combined reporting has become increasingly popular among states in recent years, driven by state budgetary shortfalls and the perceived distortion of taxable income by multistate corporations filing separate company reports.
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Elective Filing Based on the Federal Consolidated Group -- Most states with a corporate income tax conform, in large part, to the federal corporate income tax. The federal consolidated group filing requirement is guided by a simple, effective, and bright-line rule: ownership percentage.
Apr 14, 2015 · One of the biggest questions that arise in the context of acquisitions is when the acquired and acquiring companies are permitted or required to file a unitary combined return.
Nov 29, 2022 · A majority of states that impose a corporate income tax have adopted the use of mandatory worldwide, or water’s-edge, combined reporting methods for unitary businesses. At the same time, historically separate-filing states are seeking to adopt combined reporting tax regimes for corporate taxpayers.
Nov 11, 2010 · State X is a mandatory unitary combined state that has adopted a worldwide combination, but that permits unitary groups to file on a water’s-edge basis. Assuming State X has implemented economic nexus provisions, Foreign Corporation A will be deemed to be doing business in State X.
An increasing number of states have enacted or proposed combined reporting requirements for related entities involved in a unitary business. As of Jan. 1, 2012, 24 states and the District of Columbia require combined reporting as part of their corporate income tax regimes.
The Portfolio, Income Taxes: Consolidated Returns and Combined Reporting, compares state combined reports and state consolidated returns in detail and discusses the mechanics and implications of filing combined reports.
