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What is unitary state income tax?
Are taxpayers part of a unitary business?
Is a business within a state a unitary business?
Why do corporations have multiple unitary tax returns?
Apr 14, 2015 · The unitary business principle finds its roots in 19th-century property taxation, when the U.S. Supreme Court first observed that an integrated business should be taxed as one unit instead of...
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.
‘Unitary business’ means, for privilege periods ending before July 31, 2023, a single economic enterprise that is made up either of separate parts of a single business entity or of a group of business entities under common ownership that are sufficiently interdependent, integrated, and interrelated through their activities so as to provide a syn...
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Feb 24, 2017 · How Combined Reporting Works. For corporations that only do business in one state, paying corporate income taxes can be simple – all of their profits are taxable in the state in which they are located. For corporations with subsidiaries in multiple states, the task of determining the amount of profits subject to taxation is more complicated.
- Unitary Business Group
- Water’s Edge and Other Filing Elections
- Water’s-Edge Group Membership
- Calculation of Taxable Income
- Apportionment and Joyce-Finnigan Methodology
- Treatment of NOLS and Credits
- Future Considerations
A characteristic permeating each state’s reporting methodology is a broadly defined concept of the unitary business group. West Virginia defines a unitary business as a single economic enterprise made up of separate parts of a single business entity or of a commonly controlled group of business entities. They must be “sufficiently interdependent, i...
A West Virginia combined group is required to file on a water’s-edge basis, unless the group elects to file on a worldwide combined basis (WV Code §§11-2413f(a), (b)). The worldwide election must be made on a timely filed, original return by every member of the unitary business subject to tax (WV Code §11-24-13f(b) (1)). The election is binding and...
A West Virginia water’s-edge group consists of combined group members that: 1. Are incorporated or formed in the United States; 2. Have apportionment factors in the United States averaging 20% or more; 3. Are domestic international sales corporations, foreign sales corporations, or export trade corporations; 4. Are members not included in the first...
In West Virginia, each member is responsible for tax based on its taxable income or loss apportioned or allocated to West Virginia. This includes the member’s apportioned share of the combined group’s business income. A member’s net business income is determined by removing all but business income, expense, and loss from that member’s total income....
West Virginia combined group members must utilize a three-factor formula comprising property, payroll, and double-weighted sales. West Virginia has proposed that it will follow the Joyce approach beginning January 1, 2009 (Ap peal of Joyce, Inc., No. 66-SBE-070 (Cal. State Bd. of Equalization 11/23/66)). Under Joyce, the sales of members with their...
West Virginia allows an NOL carryover earned during a tax year in which the taxpayer filed a consolidated return to be applied as a deduction from taxable income of any member of the controlled group until it is used or expires. NOLs earned otherwise may only be applied to the member that generated the loss (WV Code §11-24-13c(b)(1)(G)). In general...
The next few months are likely to result in a number of refinements to the filing methodologies in West Virginia, Massachusetts, and Wisconsin as taxpayers submit the first combined filings. At the same time, states’ regulations are still being clarified and finalized, and potential technical corrections bills are being considered. One of the bigge...
Therefore, the Ruling holds that if a partner is engaged in a unitary business with the partnership and holds a 25% interest, the partner and 25% of the partnership's income and factors are combined. Unlike a unitary group of corporations, pass-through entities need not hold more than 50% of an entity to be unitary with that entity.
Dec 8, 2010 · News Flash: All States Are Unitary States. Each year, many taxpayers file inaccurate corporate income tax returns in separate-reporting jurisdictions because they do not consider the unitary business principle applicable to those states. Although you may find this revelation shocking, the simple fact is that all states are unitary states.
