SB202 Summary

• Requires related entities engaged in a unitary business to file combined corporate income tax returns instead of separate returns, preventing income shifting to tax-favorable states.

• Establishes definitions for "unitary business," "combined group," and "tax haven" to determine which corporations must file combined reports and includes mechanisms for the commissioner to require combination by regulation.

• Creates "water's-edge" and "affiliated group" election options allowing taxpayers to limit combined reporting scope, with water's-edge elections binding for 10 years and affiliated group elections for 10-year renewable periods.

• Specifies income calculation methodology for combined groups including treatment of intercompany transactions, dividends, charitable expenses, and capital gains/losses with detailed apportionment factor rules.

• Effective for all taxable years beginning after December 31, 2014; grants Department of Revenue broad discretion to promulgate implementation rules.