Search results
People also ask
What is unitary state income tax?
Are taxpayers part of a unitary business?
What is the difference between a separate state and a unitary state?
Why do corporations have multiple unitary tax returns?
Sep 26, 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. While the regulation and requirements vary greatly among states, some generalities may be used to explain the concept.
Dec 8, 2010 · Although you may find this revelation shocking, the simple fact is that all states are unitary states. In other words, all states must abide by the unitary business principle in administering their corporate income tax regimes.
- Unitary Group Opportunities
- Functional Integration
- Centralization of Management
- Economies of Scale
- Jurisdictional Inconsistency
- Sources
While combined reporting often limits potential opportunities for impacted businesses through the imposition of mandatory rules under separate reporting regimes, several opportunities may be available, including defining the unitary group subject to combination, as well as apportionment planning in the proper calculation of the sales factor. In mos...
The functional integration test looks to shared functions and refers to transfers between, or pooling among, business entities that significantly affect the operation of the business activities.5Generally, functional integration includes, but is not limited to, transfers or pooling with respect to the business’s products or services, technical info...
The centralized management test focuses on not the ability to control but the actual amount of common control exercised between business segments. Centralization of management exists when directors, officers, and/or other management employees jointly participate in the management decisions that affect the respective business activities and that may...
The economies of scale test focuses on whether there is any income earned as a result of shared functions, activities, or operations. Economies of scale refer to a relation among and between business activities resulting in a significant decrease in the average per-unit cost of operational or administrative functions due to the increase in operatio...
Currently, approximately 30 jurisdictions mandate unitary combined reporting for general corporations that are commonly owned or controlled. However, notwithstanding the constitutional tests discussed above, these states adopt varying statutory definitions of “unitary” for purposes of combined reporting. Even in cases where the definitions in diffe...
Butler Brothers v. McColgan, 315 U.S. 501 (1942); See also 17 Cal. 2d 664.Edison California Stores v. McColgan, 183 P.2d 16 (1947).Mobil Oil Corp. v. Commissioner of Taxes of Vermont, 445 U.S. 425 (1980).Ibid.This Technical Bulletin explains the unitary business principle and the definition of unitary business for New Jersey Corporation Business Tax purposes . For periods ending on and after July 31, 2023 (highlighting added for emphasis) the definition of a unitary business is defined in N.J.S.A. 54:10A-4(gg) as:
- 109KB
- 5
Combined reporting: a method of reporting/filing returns where all affiliates engaged in a unitary business must include their income, expenses, apportionment, etc. on a single report to calculate the group's tax liability. Consolidated return: a return where the parent corporation of an affiliated group includes the above items for itself and ...
Nov 28, 2023 · Filing two state tax returns, where one state is a separate-return state and the other is a unitary state; A loss by the entity filing in the separate-return state; A state tax rate change
The key point in determining the state income tax for a company conducting interstate commerce is how the unitary business concept applies to the computation of taxable income. For example, the apportionment of income between business and non-business income typically depends upon how a state applies the unitary business concept.
