Consolidated returns

1. As used in this section: a. "Combined report" means a tax return on which the tax liability is computed using the method described in chapters 81-03-05.2 and 81-03-05.3. b. "Consolidated return" means a single corporation income tax return that reports the tax liability of more than one corporation engaged in business in or having sources of income from North Dakota. c. "Taxpayer" means a corporation liable to report income or loss to North Dakota. 2. Only taxpayers who compute their liability using the combined report method may file a consolidated return. The consolidated return must contain the following information: a. Identifies the name and federal identification number of the corporation that will file the consolidated return. b. Reports the tax liabilities of all taxpayers in the combined report. 3. All taxpayers in the combined group must continue to file a consolidated return until the commissioner is notified in writing of the combined group's intent to file individual returns. 4. This section is effective for all tax years beginning after December 31, 1992. Example: Corporation A Corporation B Corporation C Combined Amounts Facts: Federal taxable income $500,000 $(80,000) $40,000 $460,000 State adjustments 10,000 1,000 5,000 16,000 North Dakota property 150,000 0 10,000 Total property 150,000 100,000 10,000 260,000 North Dakota payroll 60,000 0 40,000 Total payroll 60,000 100,000 40,000 200,000 North Dakota sales 1,000,000 0 200,000 Total sales 1,500,000 300,000 200,000 2,000,000 Computation of apportionment factor Corporation A Corporation C North Dakota property $150,000 $10,000 Combined property 260,000 260,000 Property factor .576923 .038462 North Dakota payroll 60,000 40,000 Combined payroll 200,000 200,000 Payroll factor .300000 .200000 North Dakota sales 1,000,000 200,000 Combined sales 2,000,000 2,000,000 Sales factor .500000 .100000 Sum of factors 1.376923 .338462 Apportionment factor .458974 .112821 Computation of tax liability Corporation A Corporation C Total Tax Due Federal taxable income $460,000 $460,000 State adjustments 16,000 16,000 North Dakota apportionable income 476,000 476,000 Apportionment factor .458974 .112821 North Dakota taxable income 218,472 53,703 North Dakota tax due (2015 rates) 8,501 1,400 $9,901