Rhode Island Code of Regulations › Title 280 - Department of Revenue › Chapter 20 - Division of Taxation › Subchapter 25 - Business Corporation Tax › Part 9 - Apportionment of Net Income (280-RICR-20-25-9) › Section 280-RICR-20-25-9.7 - Combined Reporting Requirement for Tax Years Beginning on or After January 1, 2015

Current through June 14, 2024
A. Commencement of
				 Mandatory Unitary Combined Reporting. For tax years beginning on or after
				 January 1, 2015, a C corporation must report on its Rhode Island corporate
				 income tax return not only its own income, but also the combined income of the
				 other corporations that are members in its combined group. The C corporation
				 must treat all such corporations and affiliates as if they comprise one, single
				 unitary company, and combine all income into a single pool. Thus, each member
				 in the combined group must include all receipts, i.e., total receipts or gross
				 receipts, from sales or other sources, without regard to whether the member has
				 corporate income tax nexus in this state. In calculating the single sales
				 factor for a combined group, receipts between members included in the group
				 must be eliminated.
B. Treatment of
				 C Corporation's Pass-Through Entity Income. When a partnership or other
				 pass-through entity does not elect to be taxed as a corporation for federal tax
				 purposes and is directly or indirectly held by a corporation, including any
				 member in a combined group, then the business conducted by the partnership or
				 pass-through entity shall be considered the business of the corporation to the
				 extent of the corporation's distributive share of the partnership or
				 pass-through entity income. Such distributive share shall be included in the
				 net income calculations of the corporation and the combined group, and shall be
				 apportioned to Rhode Island for corporate income tax purposes as set forth in
				 this Regulation, consistent with the decision reached by the Rhode Island
				 Supreme Court in Homart Dev. Co. v. Norberg, 529 A.2d 115 (R.I.
				 1987).
C. Single Sales Factor
				 Apportionment. For purposes of combined reporting, a C corporation must use the
				 single sales factor apportionment formula, as described in §
										9.8     of this Part. The purpose
				 of apportionment in the context of combined reporting is to determine the
				 combined group's Rhode Island source income, which is taxable. In determining
				 the combined group's taxable income in this manner, the Division of Taxation is
				 merely measuring the in-state activities of the combined group, and not
				 imposing a tax on members in the combined group that lack nexus with Rhode
				 Island or that are protected from Rhode Island taxation by Public Law 86-272.
				 After determining through such an apportionment formula the amount of a
				 combined group's net income apportioned to Rhode Island, combined group net
				 income is solely attributed to and tax is solely imposed on those members in
				 the combined group that have corporate income tax nexus with Rhode Island.
D. Members of the Combined Group
				 with Different Accounting Periods:
1.
				 Mandatory Election of Uniform Accounting Period. If the taxable year of a
				 member in a combined group differs from the taxable year of the combined group,
				 the designated agent shall elect to determine the portion of that member's
				 income to be included in one of the following ways:
a. a separate income statement prepared from
				 the books and records for the months included in the group's taxable year;
				 or
b. including all of the income
				 for the year that ends during the group's taxable year.