2023 New York Laws › TAX - Tax › Article 9-A - Franchise Tax on Business Corporations › 210-C - Combined Reports.

§  210-C.  Combined reports.  1. Tax. (a) The tax on a combined report
shall be the highest of (i) the combined business income base multiplied
by the tax rate specified in paragraph (a) of subdivision one of section
two hundred  ten  of  this  article;  (ii)  the  combined  capital  base
multiplied by the tax rate specified in paragraph (b) of subdivision one
of  section  two  hundred  ten  of  this  article, but not exceeding the
limitation provided for in that paragraph (b); or (iii) 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  paragraph (d) of subdivision one of
section two hundred ten of this article 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 apportioned to the  state,
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 apportioned to the state.
2.  Combined reports required. (a) Except as provided in paragraph (c)
of this subdivision, any taxpayer (i)  which  owns  or  controls  either
directly  or  indirectly  more than fifty percent of the voting power of
the capital stock of one or more other corporations, or (ii)  more  than
fifty percent of the voting power of the capital stock of which is owned
or  controlled  either  directly  or  indirectly  by  one  or more other
corporations, or (iii) more than fifty percent of the  voting  power  of
the  capital  stock  of which and the capital stock of one or more other
corporations, is owned or controlled, directly  or  indirectly,  by  the
same  interests,  and  (iv)  that  is engaged in a unitary business with
those corporations (hereinafter referred to as "related  corporations"),
shall make a combined report with those other corporations.
(b)  A  corporation  required  to  make  a  combined report within the
meaning of this section shall also include (i)  a  captive  REIT  and  a
captive  RIC  if  the  captive REIT or captive RIC is not required to be
included in  a  combined  report  under  article  thirty-three  of  this
chapter; (ii) a combinable captive insurance company; and (iii) an alien
corporation  that  satisfies  the  conditions  in  paragraph (a) of this
subdivision if (I) under any provision of  the  internal  revenue  code,
that  corporation  is  treated as a "domestic corporation" as defined in
section seven thousand seven hundred one of the internal  revenue  code,
or  (II)  it  has  effectively  connected  income  for  the taxable year
pursuant to clause (iv) of the opening paragraph of subdivision nine  of
section two hundred eight of this article.
(c)  A  corporation  required  or  permitted to make a combined report
under this section does not include (i) a corporation  that  is  taxable
under a franchise tax imposed by article nine or article thirty-three of
this  chapter  or  would  be  taxable  under  a franchise tax imposed by
article nine or thirty-three of this chapter if subject to tax;  (ii)  a
REIT  that  is  not a captive REIT, and a RIC that is not a captive RIC;
(iii) a New York S corporation; or (iv) 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 (iv) of the opening paragraph of subdivision nine of
section two hundred eight of this article. If a corporation  is  subject
to  tax  under  this  article  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, maintaining an
office in this state, or deriving receipts from activity in this  state,

and  none  of  the corporation's related corporations are subject to tax
under this article, 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.
3. Commonly owned group election. (a) Subject  to  the  provisions  of
paragraph  (c)  of subdivision two of this section, a taxpayer may elect
to treat as its combined group all corporations that meet the  ownership
requirements  described  in  paragraph  (a)  of  subdivision two of this
section (such corporations collectively referred to in this  subdivision
as  the  "commonly owned group"). If that election is made, the commonly
owned group shall  calculate  the  combined  business  income,  combined
capital,  and  fixed dollar minimum bases of all members of the group in
accordance with subdivision four of this section, whether  or  not  that
business income or business capital is from a single unitary business.
(b)  The election under this subdivision shall be made on an original,
timely filed return of the combined group,  determined  with  regard  to
extensions of time for filing. Any corporation entering a commonly owned
group  subsequent  to  the  year  of  election  shall be included in the
combined group and is considered to have waived  any  objection  to  its
inclusion in the combined group.
(c)  The election shall be irrevocable, and binding for and applicable
to the taxable year for which it is made and for the  next  six  taxable
years.  The  election  will  automatically  be renewed for another seven
taxable years after it has been in effect for seven taxable years unless
it is  affirmatively  revoked.  The  revocation  shall  be  made  on  an
original,  timely  filed  return  for  the  first taxable year after the
completion of a seven year period  for  which  an  election  under  this
subdivision  was  in  place. In the case of a revocation, a new election
under this subdivision shall not be permitted in any of the  immediately
following  three  taxable years. In determining the seven and three year
periods described in this paragraph, short taxable years  shall  not  be
considered or counted.
4. Computation of tax bases on a combined report. (a) In computing the
tax  bases  for a combined report, the combined group shall generally be
treated as a single  corporation,  except  as  otherwise  provided,  and
subject to any regulations or guidance issued by the commissioner or the
department.
(b)(i)  In  computing  combined  business  income,  all intercorporate
dividends shall be eliminated, and all other intercorporate transactions
shall be deferred in a manner similar  to  the  United  States  Treasury
regulations  relating to intercompany transactions under section fifteen
hundred two of the internal revenue code.
(ii) 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.
(c) Qualification for  credits,  including  any  limitations  thereon,
shall  be  determined separately for each of the members of the combined
group, and shall not be determined on a combined group basis, except  as
otherwise  provided.  However,  the credits shall be applied against the
combined tax of the group. To the extent that a provision of section two
hundred ten-B of this article  limits  a  credit  to  the  fixed  dollar
minimum amount prescribed in paragraph (d) of subdivision one of section
two  hundred ten of this article, such fixed dollar minimum amount shall
be  the  fixed  dollar  minimum  amount  that  is  attributable  to  the
designated agent of the combined group.
(d)  (i)  A  net  operating loss deduction is allowed in computing the
combined business income base. Such deduction may reduce the tax on  the
combined  business  income base to the higher of the tax on the combined
capital base or the fixed dollar minimum amount that is attributable  to
the  designated  agent  of  the combined group. A combined net operating
loss deduction is equal to the amount of combined net operating loss  or
losses  from  one  or  more  taxable  years  that are carried forward or
carried back to a particular taxable year. A combined net operating loss
is the combined business loss incurred  in  a  particular  taxable  year
multiplied by the combined apportionment factor for that year determined
as provided in subdivision five of this section.
(ii)  The  combined  net  operating  loss  deduction  and combined net
operating loss are also subject to the provisions contained  in  clauses
one  through  seven of subparagraph (ix) of paragraph (a) of subdivision
one of section two hundred ten of this article.
(iii) 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.
(iv) 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 subparagraph
(viii) of paragraph (a) of subdivision one of section two hundred ten of
this  article.  Such  subtraction  may  reduce  the  tax on the combined
business income base to the higher of the tax on  the  combined  capital
base  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
six,  paragraphs (b) and (c) of subdivision six-a of section two hundred
eight, and item (IV) of subclause two  of  clause  (B)  of  subparagraph
(viii)  and  clause  seven  of  subparagraph  (ix)  of  paragraph (a) of
subdivision one of section two hundred ten of this article  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
six of section two hundred eight of this article applies 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)(i)  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 five (in the case of a
captive REIT) or subdivision seven (in the case of  a  captive  RIC)  of
section  two  hundred nine of this article. 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.
(ii) In the case of a combinable captive  insurance  company  required
under  this  section  to  be  included  in a combined report, entire net
income shall be computed as required by subdivision nine of section  two
hundred eight of this article.
(g) If more than one member of a combined group is eligible for any of
the   modifications   described  in  paragraphs  (r),  (s)  and  (t)  of
subdivision nine of section two hundred eight of this article, all  such
members must utilize the same modification.
5.  Apportionment  on  a  combined  report.  (a)  In  determining  the
apportionment factor for a combined report, the  receipts,  net  income,
net  gains and other items of all members of the combined group, whether
or not they are a taxpayer, are included  and  intercorporate  receipts,
income  and  gains  are  eliminated. Receipts, net income, net gains and
other items are sourced, and the amounts allowed  in  the  apportionment
factor  are determined, as provided in section two hundred ten-A of this
article.
(b) An election made to apportion income  and  gains  from  qualifying
financial  instruments  pursuant to subparagraph one of paragraph (a) of
subdivision five of section two hundred  ten-A  of  this  article  shall
apply to all members of the combined group.
6.  Liability  of combined group members. 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.  Designated  agent.  Each  combined group shall have one 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.