2023 District of Columbia Code › Title 47 - Taxation, Licensing, Permits, Assessments, and Fees. [Enacted title] › Chapter 18 - Income and Franchise Taxes › Subchapter X - Purpose of Chapter and Allocation and Apportionment › § 47–1810.08. Accounting rules; future deductions

§ 47–1810.08. Accounting rules; future deductions.
(a) If the enactment of combined reporting requirements for unitary businesses results in an increase to a combined group’s net deferred tax liability, the combined group shall be entitled to a deduction to the extent determined under subsection (b) of this section. Only publicly traded companies, including affiliated corporations participating in the filing of a publicly traded company’s financial statements prepared in accordance with generally accepted accounting principles, as of September 14, 2011, shall be eligible for this deduction. To the extent the deduction would produce a net operating loss in any tax year, the unused deduction may be carried forward to each succeeding tax year by the combined group.
(b)(1) For the 7-year period beginning with the 15th year of the combined filing, a combined group shall be entitled to a deduction equal to 1/7th of the net increase in the taxable temporary differences that caused the increase in the net deferred tax liability, as computed at the time of enactment in accordance with generally accepted accounting principles, that would result from the imposition of the combined reporting requirements but for the deduction provided under this section. The amount of the deduction shall in no case exceed the amount necessary to offset any increase in net deferred tax liability, as computed in accordance with generally accepted accounting principles, that would result from the imposition of all of the provisions of combined reporting but for the deduction provided under this section.
(2) If there is an underpayment of estimated tax for tax year 2020 as a result of taking into account the deduction pursuant to this section, the estimated tax interest resulting from such underpayment, upon application, shall be waived.
(c) For the purposes of this section, the term “net deferred tax liability” shall mean the net increase, if any, in deferred tax liabilities minus the net increase, if any, in deferred tax assets of the combined group, as computed in accordance with generally accepted accounting principles.
(Sept. 14, 2011, D.C. Law 19-21, § 8002(d), 58 DCR 6226; Sept. 26, 2012, D.C. Law 19-171, § 114(i), 59 DCR 6190; Dec. 24, 2013, D.C. Law 20-61, § 7102(d), 60 DCR 12472; Oct. 8, 2016, D.C. Law 21-160, § 7042, 63 DCR 10775; Dec. 3, 2020, D.C. Law 23-149, § 7182, 67 DCR 10493.)
Effect of Amendments
The 2012 amendment by D.C. Law 19-171 substituted “this chapter” for “this act” in the second sentence of (b).
The 2013 amendment by D.C. Law 20-61 rewrote the section.
Emergency Legislation
For temporary amendment of section, see § 302(d) of the Fiscal Year 2013 Budget Support Technical Clarification Emergency Amendment Act of 2012 (D.C. Act 19-482, October 12, 2012, 59 DCR 12478), applicable for taxable years beginning after December 31, 2010.
For temporary (90 days) amendment of this section, see §§ 7102(d) and 7103 of the Fiscal Year 2014 Budget Support Emergency Act of 2013 (D.C. Act 20-130, July 30, 2013, 60 DCR 11384, 20 DCSTAT 1827).
For temporary (90 days) amendment of this section, see §§ 7102(d) and 7103 of the Fiscal Year 2014 Budget Support Congressional Review Emergency Act of 2013 (D.C. Act 20-204, October 17, 2013, 60 DCR 15341, 20 DCSTAT 2311).
Temporary Legislation
Section 302(d) of D.C. Law 19-226 amended this section to read as follows:
“§ 47-1810.08. Accounting rules; future deductions.
“(a) If the enactment of combined reporting requirements for unitary businesses results in an increase to a combined group’s net deferred tax liability, the combined group shall be entitled to a deduction to the extent determined under subsection (b) of this section. Only publicly traded companies, including affiliated corporations participating in the filing of a publicly traded company’s financial statements prepared in accordance with generally accepted accounting principles, as of September 14, 2011 shall be eligible for this deduction. To the extent the deduction would produce a net operating loss in any tax year, the unused deduction may be carried forward to each succeeding tax year indefinitely by the combined group and deducted without regard to any limitation.
“(b) For the 7-year period beginning with the 5th year of the combined filing, a combined group shall be entitled to a deduction equal to 1/7th of the net increase in the taxable temporary differences that caused the increase in the net deferred tax liability, as computed at the time of enactment in accordance with generally accepted accounting principles, that would result from the imposition of the combined reporting requirements but for the deduction provided under this section. The amount of the deduction shall in no case exceed the amount necessary to offset any increase in net deferred tax liability, as computed in accordance with generally accepted accounting principles, that would result from the imposition of all of the provisions of combined reporting but for the deduction provided under this section.
“(c) For the purposes of this section, the term ‘net deferred tax liability’ shall mean the net increase, if any, in deferred tax liabilities minus the net increase, if any, in deferred tax assets of the combined group, as computed in accordance with generally accepted accounting principles.”
Section 303 of D.C. Law 19-226 provided that § 302 of the act shall apply for taxable years beginning after December 31, 2010.
Section 402(b) of D.C. Law 19-226 provided that the act shall expire after 225 days of its having taken effect.
Short Title
Section 7101 of D.C. Law 20-61 provided that Subtitle J of Title VII of the act may be cited as the “Combined Reporting Clarification Act of 2013”.
Editor's Notes
Section 8004 of D.C. Law 19-21 provided: “Sec. 8004. Applicability. This subtitle shall apply for taxable years beginning after December 31, 2010.”
Applicability of D.C. Law 20-61: Section 7103 of D.C. Law 20-61 provided that § 7102 of the act shall apply for taxable years beginning after December 31, 2010.