04-18 Amend Municipal Net Profit Taxes 128.22 - 128.2215

Home Browse Search

consolidated tax return is binding for a five -year period beginning with the first taxable year of the election. (3) An election made under subsection (b)(1) or (2) of this section is binding on all members of the affiliated group of corporations subject to a municipal income tax. (4) When a taxpayer makes the election allowed under section 128.22 of the Codified Ordinances, a valid election made by the taxpayer under subsection (b)(1) or (2) of section 128.063 of the Codified Ordinances is binding upon the tax commissioner for the remainder of the five -year period. (5) When an election made under section 128.22 of the Codified Ordinances is terminated, a valid election made under this section is binding upon the tax commissioner for the remainder of the five -year period. (c) A taxpayer that is a member of an affiliated group of corporations that filed a consolidated federal income tax return for a taxable year shall file a consolidated tax return for that taxable year if the tax commissioner determines, by a preponderance of the evidence, that intercompany transactions have not been conducted at arm's length and that there has been a distortive shifting of income or expenses with regard to allocation of net profits to a municipal corporation. A taxpayer that is required to file a consolidated tax return for a taxable year shall file a consolidated tax return for all subsequent taxable years unless the taxpayer requests and receives written permission from the commissioner to file a separate return or a taxpayer has experienced a. change in circumstances. (d) A taxpayer shall prepare a consolidated tax return in the same manner as is required under the United States department of treasury regulations that prescribe procedures for the preparation of the consolidated federal income tax return required to be filed by the common parent of the affiliated group of which the taxpayer is a member. (e)(1) Except as otherwise provided in subsections (e)(2), (3), and (4) of this section, corporations that file a consolidated tax return shall compute adjusted federal taxable income, as defined in section 128.2201 of the Codified Ordinances, by substituting "consolidated federal taxable income" for "federal taxable income" wherever "federal taxable income" appears in that subsection and by substituting "an affiliated group of corporation's" for "a C corporation's" wherever "a C corporation's" appears in that subsection. (2) No corporation filing a consolidated tax return shall make any adjustment otherwise required under subsection (b) of section 128.2201 of the Codified Ordinances to the extent that the item of income or deduction otherwise subject to the adjustment has been eliminated or consolidated in the computation of consolidated federal taxable income. (3) If the net profit or loss of a pass - through entity having at least eighty per cent of the value of its ownership interest owned or controlled, directly or indirectly, by an affiliated group of corporations is included in that affiliated group's consolidated federal taxable income for a taxable year, the corporation filing a consolidated tax return shall do one of the following with respect to that pass - through entity's net profit or loss for that taxable year: