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Tax Management Portfolio Income Taxes: Consolidated Returns and Combined Reporting, No. 1130, compares state combined reports and state consolidated returns in detail and discusses the mechanics and implications of filing combined reports and the different types of state consolidated returns.
Apr 14, 2015 · The unitary business principle plays an important role not only as a criterion for combined reporting, but also as a touchstone for a state’s ability to tax extraterritorial values.
The first difference is a concept unique to state reporting — the unitary business principle. A U.S. consolidated federal income tax return is made by taxpayer election and requires 80% ownership of vote and value, and the Sec. 1504 affiliated group includes only U.S. corporations.
Sep 26, 2017 · by Betsy Gallup. Published on 26 Sep 2017. The unitary state income tax is a means by which certain states regulate the collection of income in the form of taxes from companies that do interstate commerce or file consolidated tax returns.
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.
For additional information about these items, contact Mr. Fairbanks at (202) 521-1503 or greg.fairbanks@gt.com. 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 ...
The water’s-edge return should exclude domestic “80/20” companies and all foreign domiciled entities except unitary foreign entities with in-state nexus, to the extent of their effectively connected income. States specifically should avoid adopting “tax haven” legislation as provided in the COST Policy Statement.
