Mayor Vincent C. Gray signed the District of Columbia’s on July 30, 2013 (see http://legiscan.com/DC/text/B20-0199/2013). Key amendments were made to income tax provisions, including the combined reporting provisions.
Most notably, a “unitary business” is now defined as a single economic enterprise made up either of separate parts of a single business entity or of a commonly controlled group of businesses entities that are sufficiently interdependent, integrated, and interrelated through their activities.
Several other definitional amendments were made for combined reporting purposes, including:
“Corporation” was updated to mean (1) any corporation as defined by the laws of the District or organization of any kind treated as a corporation for tax purposes under the laws of the District; and (2) a joint-stock company, trust, association, and S corporation, or other corporation that is taxable as a corporation under federal income tax law.
The definition of “doing business” now includes the activity of a partnership.
A “person” does not include a qualified high-technology company.
The legislation removed the provision requiring a partnership’s property, payroll, and sales to be included in the partnership’s apportionment percentage for purposes of determining a taxpayer’s share of business income of a combined group apportionable to the District.
The legislation also removes the provision concerning the allocation and apportionment of a combined group’s business income if the group includes or owns an incorporated business that would be subject to the tax on unincorporated businesses.
The views express in this article are those of the author and do not necessarily reflect the position or policy of Berkeley Research Group, LLC.
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