§ 11-654.3 Combined reports.
AC § 11-654.3
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(a)The tax on a combined report shall be the highest of (1) the combined business income multiplied by the tax rate specified in clause (i) of subparagraph one of paragraph (e) of subdivision one of section 11-654 of this subchapter; (2) the combined capital multiplied by the tax rate specified in clause (ii) of subparagraph one of paragraph (e) of subdivision one of section 11-654 of this subchapter, but not exceeding the limitation provided for in such clause (ii); or (3) the fixed dollar minimum that is attributable to the designated agent of the combined group. In addition, the tax on a combined report shall include the fixed dollar minimum tax specified in clause (iv) of subparagraph one of paragraph (e) of subdivision one of section 11-654 of this subchapter for each member of the combined group, other than the designated agent, that is a taxpayer.
(b)The combined business income base is the amount of the combined business income of the combined group that is allocated to the city, reduced by any prior net operating loss conversion subtraction and any net operating loss deduction for the combined group. The combined capital base is the amount of the combined capital of the combined group that is allocated to the city.
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(c)A corporation required or permitted to make a combined report under this section does not include (1) a corporation that is taxable under a tax imposed by subchapter two or three of this chapter or chapter eleven of this title (except for a vendor of utility services that is taxable under both chapter eleven of this title and this subchapter), or would be taxable under a tax imposed by subchapter two or three of this chapter or chapter eleven of this title (except for a vendor of utility services that is taxable under both chapter eleven of this title and this subchapter), or would have been taxable as an insurance corporation under the former part IV, title R, chapter forty-six of the administrative code as in effect on June thirtieth, nineteen hundred seventy-four; (2) a REIT that is not a captive REIT, and a RIC that is not a captive RIC; or (3) an alien corporation that under any provision of the internal revenue code is not treated as a "domestic corporation" as defined in section seven thousand seven hundred one of such code and has no effectively connected income for the taxable year pursuant to clause (iii) of the opening paragraph of subdivision eight of section 11-652 of this subchapter. If a corporation is subject to tax under this subchapter solely as a result of its ownership of a limited partner interest in a limited partnership that is doing business, employing capital, owning or leasing property, or maintaining an office in this city, and none of the corporation's related corporations are subject to tax under this subchapter, such corporation shall not be required or permitted to file a combined report under this section with such related corporations.
(d)A combined report shall be filed by the designated agent of the combined group as determined under subdivision seven of this section.
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(2)In computing combined capital, all intercorporate stockholdings, intercorporate bills, intercorporate notes receivable and payable, intercorporate accounts receivable and payable, and other intercorporate indebtedness, shall be eliminated.
(3)In the case of a corporation that files a combined report, either in the year the net operating loss is incurred or in the year in which a deduction is claimed on account of the loss, the combined net operating loss deduction is determined as if the combined group is a single corporation and, to the extent possible and not otherwise inconsistent with this subdivision, is subject to the same limitations that would apply for federal income tax purposes under the internal revenue code and the code of federal regulations as if such corporation had filed for such taxable year a consolidated federal income tax return with the same corporations included in the combined report. If a corporation files a combined report, regardless of whether it filed a separate return or consolidated return for federal income tax purposes, the net operating loss and net operating loss deduction for the combined group must be computed as if the corporation had filed a consolidated return for the same corporations for federal income tax purposes.
(4)In general, any net operating loss carryover from a year in which a combined report was filed shall be based on the combined net operating loss of the group of corporations filing such report. The portion of the combined loss attributable to any member of the group that files a separate report for a succeeding taxable year will be an amount bearing the same relation to the combined loss as the net operating loss of such corporation bears to the total net operating loss of all members of the group having such losses to the extent that they are taken into account in computing the combined net operating loss.
(d-1)A prior net operating loss conversion subtraction is allowed in computing the combined business income base, as provided in subdivisions one and two of section 11-654.1 of this subchapter. Such subtraction may reduce the tax on combined business income to the higher of the tax on combined capital or the fixed dollar minimum amount that is attributable to the designated agent of the combined group.
(e)(i) Any election made pursuant to paragraph (b) of subdivision five, paragraphs (b) and (c) of subdivision five-a of section 11-652 of this subchapter, and paragraph (g) of subdivision three of section 11-654.1 of this subchapter shall apply to all members of the combined group.
(ii)The determination of whether or not the limitation on investment income provided in subparagraph (iii) of paragraph (a) of subdivision five of section 11-652 of this subchapter to the combined group shall be based on the investment income of the combined group, determined without regard to interest expenses attributable to investment capital or investment income, and the entire net income of the combined group.
(f)(1) In the case of a captive REIT or captive RIC required under this section to be included in a combined report, entire net income shall be computed as required under subdivision seven (in the case of a captive REIT) or subdivision eight (in the case of a captive RIC) of section 11-653 of this subchapter. However, the deduction under the internal revenue code for dividends paid by the captive REIT or captive RIC to any member of the affiliated group that includes the corporation that directly or indirectly owns over fifty percent of the voting stock of the captive REIT or captive RIC shall not be allowed. For purposes of this subparagraph, the term "affiliated group" means "affiliated group" as defined in section fifteen hundred four of the internal revenue code, but without regard to the exceptions provided for in subsection (b) of that section.
(g)If more than one member of a combined group is eligible for any of the modifications described in paragraphs (q), (r) or (s) of subdivision eight of section 11-652 of this subchapter, all such members must utilize the same modification.
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6.Every member of the combined group that is subject to tax under this article shall be jointly and severally liable for the tax due pursuant to a combined report.
7.Each combined group shall appoint a designated agent for the combined group, which shall be a taxpayer. Only the designated agent may act on behalf of the members of the combined group for matters relating to the combined report.
