Connecticut General Statutes 12-223a – Combined corporation business tax return
(a) Subject to the provisions of subsection (e) of this section, any taxpayer included in a consolidated return with one or more other corporations for federal income tax purposes may elect to file a combined return under this chapter together with such other companies subject to the tax imposed thereunder as are included in the federal consolidated corporation income tax return and such combined return shall be filed in such form and setting forth such information as the Commissioner of Revenue Services may require. Notice of an election made pursuant to the provisions of this subsection and consent to such election must be submitted in written form to the Commissioner of Revenue Services by each corporation so electing not later than the due date, or if an extension of time to file has been requested and granted, the extended due date of the returns due from the electing corporations for the initial income year for which the election to file a combined return is made. Such election shall be in effect for such initial income year and for each succeeding income years unless and until such election is revoked in accordance with the provisions of subsection (d) of this section.
Terms Used In Connecticut General Statutes 12-223a
- Commissioner: means the Commissioner of Revenue Services. See Connecticut General Statutes 12-213
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Income year: means the calendar year upon the basis of which net income is computed under this part, unless a fiscal year other than the calendar year has been established for federal income tax purposes, in which case it means the fiscal year so established or a period of less than twelve months ending as of the date on which liability under this chapter ceases to accrue by reason of dissolution, forfeiture, withdrawal, merger or consolidation. See Connecticut General Statutes 12-213
- Intangible property: Property that has no intrinsic value, but is merely the evidence of value such as stock certificates, bonds, and promissory notes.
- Net income: means net earnings received during the income year and available for contributors of capital, whether they are creditors or stockholders, computed by subtracting from gross income the deductions allowed by the terms of section 12-217, except that in the case of a domestic insurance company which is a life insurance company, "net income" means life insurance company taxable income (A) increased by any amount or amounts which have been deducted in the computation of gain or loss from operations in respect of (i) the life insurance company's share of tax-exempt interest, (ii) operations loss carry-backs and capital loss carry-backs, and (iii) operations loss carry-overs and capital loss carry-overs arising in any taxable year commencing prior to January 1, 1973, and (B) reduced by any amount or amounts which have been deducted as operations loss carry-backs or capital loss carry-backs in the computation of gain or loss from operations for any taxable year commencing on or after January 1, 1973, but only to the extent that such amount or amounts would, for federal tax purposes, have been deductible in the taxable year as operations loss carry-overs or capital loss carry-overs if they had not been deducted in a previous taxable year as carry-backs, and provided no expense related to income, the taxation of which by the state of Connecticut is prohibited by the law or . See Connecticut General Statutes 12-213
- succeeding: when used by way of reference to any section or sections, mean the section or sections next preceding, next following or next succeeding, unless some other section is expressly designated in such reference. See Connecticut General Statutes 1-1
- Unitary business: means 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, which enterprise is sufficiently interdependent, integrated or interrelated through its activities so as to provide mutual benefit and produce a significant sharing or exchange of value among such entities, or a significant flow of value among the separate parts. See Connecticut General Statutes 12-213
(b) Subject to the provisions of subsection (e) of this section, any taxpayer, other than a corporation filing a combined return with one or more other corporations under subsection (a) of this section, which owns or controls either directly or indirectly substantially all the capital stock of one or more corporations, or substantially all the capital stock of which is owned or controlled either directly or indirectly by one or more other corporations or by interests which own or control either directly or indirectly substantially all the capital stock of one or more other corporations, may, in the discretion of the Commissioner of Revenue Services, be required or permitted by written approval of the Commissioner of Revenue Services to make a return on a combined basis covering any such other corporations and setting forth such information as the Commissioner of Revenue Services may require, provided no combined return covering any corporation not subject to tax under this chapter shall be required unless the Commissioner of Revenue Services deems such a return necessary, because of intercompany transactions or some agreement, understanding, arrangement or transaction referred to in section 12-226a, in order properly to reflect the tax liability under this part.
(c) (1) (A) In the case of a combined return, the tax shall be measured by the sum of the separate net income or loss of each corporation included or the minimum tax base of the included corporations but only to the extent that said income, loss or minimum tax base of any included corporation is separately apportioned to Connecticut in accordance with the provisions of section 12-218, 12-218b, 12-219a or 12-244, whichever is applicable. In computing said net income or loss, intercorporate dividends shall be eliminated, and in computing the combined additional tax base, intercorporate stockholdings shall be eliminated.
(B) In computing said net income or loss, any intangible expenses and costs, as defined in section 12-218c, any interest expenses and costs, as defined in section 12-218c, and any income attributable to such intangible expenses and costs or to such interest expenses and costs shall be eliminated, provided the corporation that is required to make adjustments under section 12-218c for such intangible expenses and costs or for such interest expenses and costs, and the related member or members, as defined in section 12-218c, are included in such combined return. If any such income and any such expenses and costs are eliminated as provided in this subparagraph, the intangible property, as defined in section 12-218c, of the corporation eliminating such income shall not be taken into account in apportioning under the provisions of section 12-219a the tax calculated under subsection (a) of section 12-219 of such corporation.
(2) If the method of determining the combined measure of such tax in accordance with this subsection for two or more affiliated companies validly electing to file a combined return under the provisions of subsection (a) of this section is deemed by such companies to unfairly attribute an undue proportion of their total income or minimum tax base to this state, said companies may submit a petition in writing to the Commissioner of Revenue Services for approval of an alternate method of determining the combined measure of their tax not later than sixty days prior to the due date of the combined return to which the petition applies, determined with regard to any extension of time for filing such return, and said commissioner shall grant or deny such approval before said due date. In deciding whether or not the companies included in such combined return should be granted approval to employ the alternate method proposed in such petition, the Commissioner of Revenue Services shall consider approval only in the event that the petitioners have clearly established to the satisfaction of said commissioner that all the companies included in such combined return are, in substance, parts of a unitary business engaged in a single business enterprise and further that there are substantial intercorporate business transactions among such included companies.
(3) Upon the filing of a combined return under subsection (a) or (b) of this section, combined returns shall be filed for all succeeding income years or periods for those corporations reporting therein, provided, in the case of corporations filing under subsection (a) of this section, such corporations are included in a federal consolidated corporation income tax return filed for the succeeding income years and, in the case of a corporation filing under subsection (b) of this section, the aforesaid ownership or control continues in full force and effect and is not extended to other corporations, and further, provided no substantial change is made in the nature or locations of the operations of such corporations.
(d) Notwithstanding the provisions of subsections (a) and (c) of this section, any taxpayer which has elected to file a combined return under this chapter as provided in said subsection (a), may subsequently revoke its election to file a combined corporation business tax return and elect to file a separate corporation business tax return under this chapter, although continuing to be included in a federal consolidated corporation income tax return with other companies subject to tax under this chapter, provided such election shall not be effective before the fifth income year immediately following the initial income year in which the corporation elected to file a combined return under this chapter. Notice of an election made pursuant to the provisions of this subsection and consent to such election must be submitted in written form to the Commissioner of Revenue Services by each corporation that had been included in such combined return not later than the due date, or if an extension of time to file has been requested and granted, extended due date of the separate returns due from the electing corporations for the initial income year for which the election to file separate returns is made. The election to file separate returns shall be irrevocable for and applicable for five successive income years.
(e) The provisions of this section shall not apply to income years commencing on or after January 1, 2016.