SB 485 Summary

• Establishes combined unitary tax return filing requirement for groups of corporations with common ownership (at least 50%) engaged in a unitary business, effective for income years beginning January 1, 2010

• Combined group net income calculated by aggregating income from all members (both taxable and nontaxable), eliminating intercorporate dividends and intercompany transactions, with special provisions for foreign entities and pass-through entities

• Taxable members apportion their share of combined group net income to Connecticut using a three-factor apportionment formula (property, payroll, and receipts), with nontaxable members' receipts allocated to taxable members based on relative receipts

• Allows election by designated taxable member to determine tax on world-wide basis (including foreign income) or default water's-edge basis (excluding most foreign entities unless earning over 20% from intangible property or services)

• Replaces previous optional combined return election under section 12-223a with mandatory combined filing for qualifying unitary business groups; designates one taxable member to file return and pay tax on behalf of group, with all members jointly and severally liable