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 › § 47–1810.04. Determination of taxable income or loss using combined report; components of income subject to tax in the District, application of tax credits and post-apportionment deductions; determination of taxpayer’s share of the business income of a combine group apportionable to the District

§ 47–1810.04. Determination of taxable income or loss using combined report; components of income subject to tax in the District, application of tax credits and post-apportionment deductions; determination of taxpayer’s share of the business income of a combine group apportionable to the District.
(a) The use of a combined report does not disregard the separate identities of the taxpayer members of the combined group. Each taxpayer member is responsible for tax based on its taxable income or loss apportioned or allocated to the District, which shall include, in addition to other types of income, the taxpayer member’s apportioned share of business income of the combined group, where business income of the combined group is calculated as a summation of the individual net business incomes of all members of the combined group. A member’s net business income is determined by removing all but business income, expense, and loss from that member’s total income, as provided in this section and § 47-1810.05.
(b)(1) Each taxpayer member is responsible for tax based on its taxable income or loss apportioned or allocated to the District, which shall include its:
(A) Share of any business income apportionable to the District of each of the combined groups of which it is a member, as determined under subsection (c) of this section;
(B) Share of any business income apportionable to the District of a distinct business activity conducted within and without the District wholly by the taxpayer member, as determined under the provisions for apportionment of business income set forth in this chapter;
(C) Income from a business conducted wholly by the taxpayer member entirely within the District;
(D) Income sourced to the District from the sale or exchange of capital or assets, and from involuntary conversions, as determined under § 47-1810.05(b)(8);
(E) Nonbusiness income or loss allocable to the District as determined under the provisions for allocation of nonbusiness income set forth in this chapter;
(F) Income or loss allocated or apportioned in an earlier year required to be taken into account as District source income during the income year, other than a net operating loss; and
(G) Net operating loss carryover.
(2) If the taxable income computed pursuant to this section and § 47-1810.05 results in a loss for a taxpayer member of the combined group, that taxpayer member has a District net operating loss, subject to the net operating loss limitations and carryover provisions of this chapter. The District net operating loss shall be applied as a deduction in the subsequent year only if that taxpayer has District source positive net income, whether or not the taxpayer is a member of a combined reporting group in the subsequent year.
(3) Except where otherwise provided, no tax credit or post-apportionment deduction earned by one member of the group, but not fully used by or allowed to that member, may be used, in whole or in part, by another member of the group or applied, in whole or in part, against the total income of the combined group. A post-apportionment deduction carried over into a subsequent year as to the member that incurred it, and available as a deduction to that member in a subsequent year, will be considered in the computation of the income of that member in the subsequent year regardless of the composition of that income as apportioned, allocated, or wholly within the District.
(c) Except as provided in paragraph (3), the taxpayers share of the business income apportionable to the District of each combined group of which it is a member shall be the product of the:
(1) Business income of the combined group, determined under § 47-1810.05; and
(2) Taxpayer member’s apportionment percentage, determined in accordance with this chapter, including in the property, payroll, and sales factor numerators of the taxpayer’s property, payroll, and sales, respectively, associated with the combined group’s unitary business in the District and including in the denominator the property, payroll, and sales of all members of the combined group, including the taxpayer, which property, payroll, and sales are associated with the combined group’s unitary business wherever located.
(3) For taxable years beginning after December 31, 2014, the apportionment provisions of § 47-1810.02(d-2) shall apply.
(Sept. 14, 2011, D.C. Law 19-21, § 8002(d), 58 DCR 6226; Sept. 26, 2012, D.C. Law 19-171, § 114(h), 59 DCR 6190; Dec. 24, 2013, D.C. Law 20-61, § 7102(d), 60 DCR 12472; Feb. 26, 2015, D.C. Law 20-155, § 7012(c)(11), 61 DCR 9990.)
Section References
This section is referenced in § 47-1805.02a and § 47-1810.05.
Effect of Amendments
The 2012 amendment by D.C. Law 19-171 deleted the comma preceding “results” in (b)(2).
The 2013 amendment by D.C. Law 20-61 rewrote the section.
The 2015 amendment by D.C. Law 20-155 added “Except as provided in paragraph (3)” in the introductory language of (c); and added (c)(3).
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 amendment of section, see § 302(c) of the Fiscal Year 2013 Budget Support Technical Clarification Congressional Review Emergency Amendment Act of 2012 (D.C. Act 19-604, January 14, 2013, 60 DCR 1045), 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).
For temporary (90 days) amendment of this section, see § 7022(c)(11) of the Fiscal Year 2015 Budget Support Emergency Act of 2014 (D.C. Act 20-377, July 14, 2014, 61 DCR 7598, 20 STAT 3696).
For temporary (90 days) amendment of this section, see § 7012(c)(11) of the Fiscal Year 2015 Budget Support Congressional Review Emergency Act of 2014 (D.C. Act 20-449, October 10, 2014, 61 DCR 10915, 20 STAT 4188).
For temporary (90 days) amendment of this section, see § 7012(c)(11) of the Fiscal Year 2015 Budget Support Second Congressional Review Emergency Act of 2014 (D.C. Act 20-566, January 9, 2015, 62 DCR 884, 21 STAT 541).
Temporary Legislation
Section 302(d) of D.C. Law 19-226 amended this section to read as follows:
“§ 47-1810.04. Determination of taxable income or loss using combined report; components of income subject to tax in the District, application of tax credits and post- apportionment deductions; determination of taxpayer’s share of the business income of a combine group apportionable to the District.
“(a) The use of a combined report does not disregard the separate identities of the taxpayer members of the combined group. Each taxpayer member is responsible for tax based on its taxable income or loss apportioned or allocated to the District, which shall include, in addition to other types of income, the taxpayer member’s apportioned share of business income of the combined group, where business income of the combined group is calculated as a summation of the individual net business incomes of all members of the combined group. A member’s net business income is determined by removing all but business income, expense, and loss from that member’s total income, as provided in this section and § 47-1810.05.
“(b)(1) Each taxpayer member is responsible for tax based on its taxable income or loss apportioned or allocated to the District, which shall include its:
“(A) Share of any business income apportionable to the District of each of the combined groups of which it is a member, as determined under subsection (c) of this section;
“(B) Share of any business income apportionable to the District of a distinct business activity conducted within and without the District wholly by the taxpayer member, as determined under the provisions for apportionment of business income set forth in this chapter;
“(C) Income from a business conducted wholly by the taxpayer member entirely within the District;
“(D) Income sourced to the District from the sale or exchange of capital or assets, and from involuntary conversions, as determined under § 47-1810.05(b)(8);
“(E) Nonbusiness income or loss allocable to the District as determined under the provisions for allocation of nonbusiness income set forth in this chapter;
“(F) Income or loss allocated or apportioned in an earlier year required to be taken into account as District source income during the income year, other than a net operating loss; and
“(G) Net operating loss carryover.
“(2) If the taxable income computed pursuant to this section and § 47-1810.05 results in a loss for a taxpayer member of the combined group, that taxpayer member has a District net operating loss, subject to the net operating loss limitations and carryover provisions of this chapter. The District net operating loss shall be applied as a deduction in the subsequent year only if that taxpayer has District source positive net income, whether or not the taxpayer is a member of a combined reporting group in the subsequent year.
“(3) Except where otherwise provided, no tax credit or post-apportionment deduction earned by one member of the group, but not fully used by or allowed to that member, may be used, in whole or in part, by another member of the group or applied, in whole or in part, against the total income of the combined group. A post-apportionment deduction carried over into a subsequent year as to the member that incurred it, and available as a deduction to that member in a subsequent year, will be considered in the computation of the income of that member in the subsequent year regardless of the composition of that income as apportioned, allocated, or wholly within the District.
“(c)(1) The taxpayer’s share of the business income apportionable to the District of each combined group of which it is a member shall be the product of the:
“(A) Business income of the combined group, determined under § 47- 1810.05; and
“(B) Taxpayer member’s apportionment percentage, determined in accordance with this chapter, including in the property, payroll, and sales factor numerators of the taxpayer’s property, payroll, and sales, respectively, associated with the combined group’s unitary business in the District and including in the denominator the property, payroll, and sales of all members of the combined group, including the taxpayer, which property, payroll, and sales are associated with the combined group’s unitary business wherever located.
“(2) If any member owns an interest in a partnership that is not an unincorporated business, as defined by § 47-1808.01, the income or loss of such partnership shall be apportioned to the District using the apportionment factor of the partnership, and the combined group member-partner’s distributive share of such income shall be added to the combined group member-partner’s income.”
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.