N.D. Admin. Code 81-03-05.1-08

Current through Supplement No. 392, April, 2024

Section 81-03-05.1-08 - 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

N.D. Admin Code 81-03-05.1-08

Effective December 1, 1993; amended effective September 1, 1997.

Amended by Administrative Rules Supplement 2016-361, July 2016, effective 7/1/2016.

General Authority: NDCC 57-38-56

Law Implemented: NDCC 57-38-14