2023 Connecticut General Statutes › Title 12 - Taxation › Chapter 208 - Corporation Business Tax › Section 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.
(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.
(P.A. 73-350, S. 19, 27; P.A. 74-304, S. 1, 3; P.A. 77-534, S. 1, 2; 77-607, S. 1, 2; 77-614, S. 139, 587, 610; P.A. 78-303, S. 85, 136; P.A. 81-411, S. 4, 42; P.A. 96-197, S. 10, 11; P.A. 98-110, S. 21, 27; 98-244, S. 8, 35; P.A. 00-174, S. 26, 83; June Sp. Sess. P.A. 01-6, S. 26, 85; June 30 Sp. Sess. P.A. 03-1, S. 90; June 30 Sp. Sess. P.A. 03-6, S. 81; P.A. 15-244, S. 157; June Sp. Sess. P.A. 15-5, S. 139, 150.)
History: P.A. 73-350 effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973; P.A. 74-304 substituted “additional tax base” for “minimum base” and clarified provisions re combined returns, effective May 30, 1974, and applicable to income years beginning on or after January 1, 1973; P.A. 77-534 amended Subsec. (1) to add provisions re notice of election to submit combined return, effective June 29, 1977, and applicable to income years ending on or after that date; P.A. 77-607 clarified use of combined net income as basis for tax, added provisions re approval of alternate method of computing tax by tax commissioner and added Subsec. (4) re switching from combined filing to separate filing, effective July 6, 1977, and applicable to income years beginning on or after January 1, 1977; P.A. 77-614 and P.A. 78-303 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 81-411 changed reference to consolidated return to combined return and deleted reference to separate allocation, effective June 18, 1981, and applicable to income years commencing on or after December 28, 1980; P.A. 96-197 amended Subdiv. (3) to replace “additional” with “minimum” in reference to the tax base, effective June 3, 1996, and applicable to income years commencing on or after January 1, 1996; P.A. 98-110 added provisions re treatment of Sec. 12-218c and made technical changes, effective May 19, 1998, and applicable to income years commencing on or after January 1, 1999; P.A. 98-244 allowed corporations to revoke combined return status after the fifth income year immediately following the year of the election to file a combined return, effective June 8, 1998, and applicable to income years commencing on or after January 1, 1998; P.A. 00-174 amended Subsec. (c)(1) to divide provisions into Subparas. (A) and (B) and to provide for treatment of intangible property for purposes of the tax imposed under Sec. 12-219 for corporations eliminating income, expenses or costs under this section, effective May 26, 2000, and applicable to income years commencing on or after January 1, 2000; June Sp. Sess. P.A. 01-6 amended Subsec. (c)(2) to provide for due dates of petitions in the case of returns for which there is an extension of time, effective July 1, 2001, and applicable to income years commencing on or after January 1, 2001, with respect to petitions filed on or after October 1, 2001; June 30 Sp. Sess. P.A. 03-1 made technical changes in Subsec. (a), amended Subsec. (c) to provide for calculation of tax in case of combined return, redesignated existing Subsec. (c)(2) as new Subsec. (d) and amended same by making technical changes and adding required finding re accuracy of tax liability, redesignated existing Subsecs. (c)(3) and (d) as Subsecs. (e) and (f), and made technical changes in Subsec. (f), effective August 16, 2003, and applicable to income years commencing on or after January 1, 2003; June 30 Sp. Sess. P.A. 03-6 repealed changes made by June 30 Sp. Sess. P.A. 03-1, restoring prior version of section, and added reference to Sec. 12-218b in Subsec. (c)(1)(A), effective August 20, 2003, and applicable to income years commencing on or after January 1, 2003; P.A. 15-244 added Subsec. (e) re section not to apply to income years commencing on or after January 1, 2015, and made conforming changes in Subsecs. (a) and (b), effective June 30, 2015, and applicable to income years commencing on or after January 1, 2015; June Sp. Sess. P.A. 15-5 changed effective date of P.A. 15-244, S. 157, from June 30, 2015, and applicable to income years commencing on or after January 1, 2015, to January 1, 2016, and applicable to income years commencing on or after that date, effective June 30, 2015, and amended Subsec. (e) to provide that section not apply to income years commencing on or after January 1, 2016, effective January 1, 2016, and applicable to income years commencing on or after that date.
Cited. 43 CS 91.