IDAPA 35.01.01.365 — USE OF THE COMBINED REPORT (RULE 365)

Section 63-3027, Idaho Code
01.
In General. Use of the combined report does not disregard the separate corporate identities of the
members of the unitary group. The combined report is simply the computation, by the formula apportionment
method, of the unitary apportionable income reportable to Idaho by the separate corporate members of the unitary
group. For purposes of this rule, included corporation means a corporation required to file an Idaho income tax return
as a result of its own activities in Idaho and using a combined report.
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02.
Separate Computations. Each included corporation will:
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a.
Be responsible for computing and paying its tax including any minimum tax due pursuant to
Sections 63-3025 and 63-3025A, Idaho Code, as determined by the combined report;
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b.
Separately compute Idaho tax credits and limitations, except the investment tax credit, which is
applied pursuant to Section 63-3029B, Idaho Code, and Rules 710 through 717 of these rules; and
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c.
Separately determine and pay the permanent building fund tax required by Section 63-3082, Idaho
Code.
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03.
Net Operating Loss. The Idaho net operating loss carryover or carryback for each included
corporation is limited to its share of the combined net operating loss apportioned to Idaho for each taxable year. See
Rule 200 of these rules.
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04.
Nexus. Each corporation is to determine whether it has nexus in Idaho based on its activities or
those conducted on its behalf.
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05.
Throwback Sales. When a corporation's activities conducted in a state are within the protection of
Public Law 86-272, the principle established in Appeal of Joyce, Inc., California State Board of Equalization,
November 23, 1966, commonly known as the Joyce Rule, applies. Therefore, only the activities conducted by or on
behalf of the corporation is to be considered for this purpose.
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06.
Filing Returns. Each included corporation may file a separate return reporting its share of the
combined net income or loss of the unitary group. In the alternative, the unitary group may elect to file a group return
for all the included corporations. This election is allowed as a convenience to the taxpayer. Its use does not preclude
the need for the separate recognition and computational requirements in this rule.
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07.
Dividends and Other Intangible Income. Dividends and other intangible income is to be included
in income subject to apportionment to the extent they constitute apportionable income received from companies not
included in the combined report. However, a dividend deduction and factor adjustments are allowed to the extent
dividends received are paid from prior year earnings previously included in income subject to apportionment. Part I,
Subchapter C, Internal Revenue Code, is applied to determine the taxable year in which the earnings and profits were
earned that paid the dividend. It is the taxpayer's responsibility to prove that the dividend, or a portion of it, was
previously included in Idaho apportionable income.
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