N.Y. Tax Law § 210-C — Combined reports

§ 210-C. Combined reports. 1. Tax. (a) The tax on a combined report\nshall be the highest of (i) the combined business income base multiplied\nby the tax rate specified in paragraph (a) of subdivision one of section\ntwo hundred ten of this article; (ii) the combined capital base\nmultiplied by the tax rate specified in paragraph (b) of subdivision one\nof section two hundred ten of this article, but not exceeding the\nlimitation provided for in that paragraph (b); or (iii) the fixed dollar\nminimum that is attributable to the designated agent of the combined\ngroup. In addition, the tax on a combined report shall include the fixed\ndollar minimum tax specified in paragraph (d) of subdivision one of\nsection two hundred ten of this article for each member of the combined\ngroup, other than the designated agent, that is a taxpayer.\n (b) The combined business income base is the amount of the combined\nbusiness income of the combined group that is apportioned to the state,\nreduced by any prior net operating loss conversion subtraction and any\nnet operating loss deduction for the combined group. The combined\ncapital base is the amount of the combined capital of the combined group\nthat is apportioned to the state.\n 2. Combined reports required. (a) Except as provided in paragraph (c)\nof this subdivision, any taxpayer (i) which owns or controls either\ndirectly or indirectly more than fifty percent of the voting power of\nthe capital stock of one or more other corporations, or (ii) more than\nfifty percent of the voting power of the capital stock of which is owned\nor controlled either directly or indirectly by one or more other\ncorporations, or (iii) more than fifty percent of the voting power of\nthe capital stock of which and the capital stock of one or more other\ncorporations, is owned or controlled, directly or indirectly, by the\nsame interests, and (iv) that is engaged in a unitary business with\nthose corporations (hereinafter referred to as "related corporations"),\nshall make a combined report with those other corporations.\n (b) A corporation required to make a combined report within the\nmeaning of this section shall also include (i) a captive REIT and a\ncaptive RIC if the captive REIT or captive RIC is not required to be\nincluded in a combined report under article thirty-three of this\nchapter; (ii) a combinable captive insurance company; and (iii) an alien\ncorporation that satisfies the conditions in paragraph (a) of this\nsubdivision if (I) under any provision of the internal revenue code,\nthat corporation is treated as a "domestic corporation" as defined in\nsection seven thousand seven hundred one of the internal revenue code,\nor (II) it has effectively connected income for the taxable year\npursuant to clause (iv) of the opening paragraph of subdivision nine of\nsection two hundred eight of this article.\n (c) A corporation required or permitted to make a combined report\nunder this section does not include (i) a corporation that is taxable\nunder a franchise tax imposed by article nine or article thirty-three of\nthis chapter or would be taxable under a franchise tax imposed by\narticle nine or thirty-three of this chapter if subject to tax; (ii) a\nREIT that is not a captive REIT, and a RIC that is not a captive RIC;\n(iii) a New York S corporation; or (iv) an alien corporation that under\nany provision of the internal revenue code is not treated as a "domestic\ncorporation" as defined in section seven thousand seven hundred one of\nsuch code and has no effectively connected income for the taxable year\npursuant to clause (iv) of the opening paragraph of subdivision nine of\nsection two hundred eight of this article. If a corporation is subject\nto tax under this article solely as a result of its ownership of a\nlimited partner interest in a limited partnership that is doing\nbusiness, employing capital, owning or leasing property, maintaining an\noffice in this state, or deriving receipts from activity in this state,\nand none of the corporation's related corporations are subject to tax\nunder this article, such corporation shall not be required or permitted\nto file a combined report under this section with such related\ncorporations.\n (d) A combined report shall be filed by the designated agent of the\ncombined group as determined under subdivision seven of this section.\n 3. Commonly owned group election. (a) Subject to the provisions of\nparagraph (c) of subdivision two of this section, a taxpayer may elect\nto treat as its combined group all corporations that meet the ownership\nrequirements described in paragraph (a) of subdivision two of this\nsection (such corporations collectively referred to in this subdivision\nas the "commonly owned group"). If that election is made, the commonly\nowned group shall calculate the combined business income, combined\ncapital, and fixed dollar minimum bases of all members of the group in\naccordance with subdivision four of this section, whether or not that\nbusiness income or business capital is from a single unitary business.\n (b) The election under this subdivision shall be made on an original,\ntimely filed return of the combined group, determined with regard to\nextensions of time for filing. Any corporation entering a commonly owned\ngroup subsequent to the year of election shall be included in the\ncombined group and is considered to have waived any objection to its\ninclusion in the combined group.\n (c) The election shall be irrevocable, and binding for and applicable\nto the taxable year for which it is made and for the next six taxable\nyears. The election will automatically be renewed for another seven\ntaxable years after it has been in effect for seven taxable years unless\nit is affirmatively revoked. The revocation shall be made on an\noriginal, timely filed return for the first taxable year after the\ncompletion of a seven year period for which an election under this\nsubdivision was in place. In the case of a revocation, a new election\nunder this subdivision shall not be permitted in any of the immediately\nfollowing three taxable years. In determining the seven and three year\nperiods described in this paragraph, short taxable years shall not be\nconsidered or counted.\n 4. Computation of tax bases on a combined report. (a) In computing the\ntax bases for a combined report, the combined group shall generally be\ntreated as a single corporation, except as otherwise provided, and\nsubject to any regulations or guidance issued by the commissioner or the\ndepartment.\n (b)(i) In computing combined business income, all intercorporate\ndividends shall be eliminated, and all other intercorporate transactions\nshall be deferred in a manner similar to the United States Treasury\nregulations relating to intercompany transactions under section fifteen\nhundred two of the internal revenue code.\n (ii) In computing combined capital, all intercorporate stockholdings,\nintercorporate bills, intercorporate notes receivable and payable,\nintercorporate accounts receivable and payable, and other intercorporate\nindebtedness, shall be eliminated.\n (c) Qualification for credits, including any limitations thereon,\nshall be determined separately for each of the members of the combined\ngroup, and shall not be determined on a combined group basis, except as\notherwise provided. However, the credits shall be applied against the\ncombined tax of the group. To the extent that a provision of section two\nhundred ten-B of this article limits a credit to the fixed dollar\nminimum amount prescribed in paragraph (d) of subdivision one of section\ntwo hundred ten of this article, such fixed dollar minimum amount shall\nbe the fixed dollar minimum amount that is attributable to the\ndesignated agent of the combined group.\n (d) (i) A net operating loss deduction is allowed in computing the\ncombined business income base. Such deduction may reduce the tax on the\ncombined business income base to the higher of the tax on the combined\ncapital base or the fixed dollar minimum amount that is attributable to\nthe designated agent of the combined group. A combined net operating\nloss deduction is equal to the amount of combined net operating loss or\nlosses from one or more taxable years that are carried forward or\ncarried back to a particular taxable year. A combined net operating loss\nis the combined business loss incurred in a particular taxable year\nmultiplied by the combined apportionment factor for that year determined\nas provided in subdivision five of this section.\n (ii) The combined net operating loss deduction and combined net\noperating loss are also subject to the provisions contained in clauses\none through seven of subparagraph (ix) of paragraph (a) of subdivision\none of section two hundred ten of this article.\n (iii) In the case of a corporation that files a combined report,\neither in the year the net operating loss is incurred or in the year in\nwhich a deduction is claimed on account of the loss, the combined net\noperating loss deduction is determined as if the combined group is a\nsingle corporation and, to the extent possible and not otherwise\ninconsistent with this subdivision, is subject to the same limitations\nthat would apply for federal income tax purposes under the internal\nrevenue code and the code of federal regulations as if such corporation\nhad filed for such taxable year a consolidated federal income tax return\nwith the same corporations included in the combined report. If a\ncorporation files a combined report, regardless of whether it filed a\nseparate return or consolidated return for federal income tax purposes,\nthe net operating loss and net operating loss deduction for the combined\ngroup must be computed as if the corporation had filed a consolidated\nreturn for the same corporations for federal income tax purposes.\n (iv) In general, any net operating loss carryover from a year in which\na combined report was filed shall be based on the combined net operating\nloss of the group of corporations filing such report. The portion of the\ncombined loss attributable to any member of the group that files a\nseparate report for a succeeding taxable year will be an amount bearing\nthe same relation to the combined loss as the net operating loss of such\ncorporation bears to the total net operating loss of all members of the\ngroup having such losses to the extent that they are taken into account\nin computing the combined net operating loss.\n (d-1) A prior net operating loss conversion subtraction is allowed in\ncomputing the combined business income base, as provided in subparagraph\n(viii) of paragraph (a) of subdivision one of section two hundred ten of\nthis article. Such subtraction may reduce the tax on the combined\nbusiness income base to the higher of the tax on the combined capital\nbase or the fixed dollar minimum amount that is attributable to the\ndesignated agent of the combined group.\n (e) (i) Any election made pursuant to paragraph (b) of subdivision\nsix, paragraphs (b) and (c) of subdivision six-a of section two hundred\neight, and item (IV) of subclause two of clause (B) of subparagraph\n(viii) and clause seven of subparagraph (ix) of paragraph (a) of\nsubdivision one of section two hundred ten of this article shall apply\nto all members of the combined group.\n (ii) The determination of whether or not the limitation on investment\nincome provided in subparagraph (iii) of paragraph (a) of subdivision\nsix of section two hundred eight of this article applies to the combined\ngroup shall be based on the investment income of the combined group,\ndetermined without regard to interest expenses attributable to\ninvestment capital or investment income, and the entire net income of\nthe combined group.\n (f)(i) In the case of a captive REIT or captive RIC required under\nthis section to be included in a combined report, entire net income\nshall be computed as required under subdivision five (in the case of a\ncaptive REIT) or subdivision seven (in the case of a captive RIC) of\nsection two hundred nine of this article. However, the deduction under\nthe internal revenue code for dividends paid by the captive REIT or\ncaptive RIC to any member of the affiliated group that includes the\ncorporation that directly or indirectly owns over fifty percent of the\nvoting stock of the captive REIT or captive RIC shall not be allowed.\nFor purposes of this subparagraph, the term "affiliated group" means\n"affiliated group" as defined in section fifteen hundred four of the\ninternal revenue code, but without regard to the exceptions provided for\nin subsection (b) of that section.\n (ii) In the case of a combinable captive insurance company required\nunder this section to be included in a combined report, entire net\nincome shall be computed as required by subdivision nine of section two\nhundred eight of this article.\n (g) If more than one member of a combined group is eligible for any of\nthe modifications described in paragraphs (r), (s) and (t) of\nsubdivision nine of section two hundred eight of this article, all such\nmembers must utilize the same modification.\n 5. Apportionment on a combined report. (a) In determining the\napportionment factor for a combined report, the receipts, net income,\nnet gains and other items of all members of the combined group, whether\nor not they are a taxpayer, are included and intercorporate receipts,\nincome and gains are eliminated. Receipts, net income, net gains and\nother items are sourced, and the amounts allowed in the apportionment\nfactor are determined, as provided in section two hundred ten-A of this\narticle.\n (b) An election made to apportion income and gains from qualifying\nfinancial instruments pursuant to subparagraph one of paragraph (a) of\nsubdivision five of section two hundred ten-A of this article shall\napply to all members of the combined group.\n 6. Liability of combined group members. Every member of the combined\ngroup that is subject to tax under this article shall be jointly and\nseverally liable for the tax due pursuant to a combined report.\n 7. Designated agent. Each combined group shall have one designated\nagent for the combined group, which shall be a taxpayer. Only the\ndesignated agent may act on behalf of the members of the combined group\nfor matters relating to the combined report.\n