New York Laws
Article 9-A - Franchise Tax on Business Corporations
210-C - Combined Reports.

(b) The combined business income base is the amount of the combined
business income of the combined group that is apportioned to the state,
reduced by any prior net operating loss conversion subtraction and any
net operating loss deduction for the combined group. The combined
capital base is the amount of the combined capital of the combined group
that is apportioned to the state.
2. Combined reports required. (a) Except as provided in paragraph (c)
of this subdivision, any taxpayer (i) which owns or controls either
directly or indirectly more than fifty percent of the voting power of
the capital stock of one or more other corporations, or (ii) more than
fifty percent of the voting power of the capital stock of which is owned
or controlled either directly or indirectly by one or more other
corporations, or (iii) more than fifty percent of the voting power of
the capital stock of which and the capital stock of one or more other
corporations, is owned or controlled, directly or indirectly, by the
same interests, and (iv) that is engaged in a unitary business with
those corporations (hereinafter referred to as "related corporations"),
shall make a combined report with those other corporations.
(b) A corporation required to make a combined report within the
meaning of this section shall also include (i) a captive REIT and a
captive RIC if the captive REIT or captive RIC is not required to be
included in a combined report under article thirty-three of this
chapter; (ii) a combinable captive insurance company; and (iii) an alien
corporation that satisfies the conditions in paragraph (a) of this
subdivision if (I) under any provision of the internal revenue code,
that corporation is treated as a "domestic corporation" as defined in
section seven thousand seven hundred one of the internal revenue code,
or (II) it has effectively connected income for the taxable year
pursuant to clause (iv) of the opening paragraph of subdivision nine of
section two hundred eight of this article.
(c) A corporation required or permitted to make a combined report
under this section does not include (i) a corporation that is taxable
under a franchise tax imposed by article nine or article thirty-three of
this chapter or would be taxable under a franchise tax imposed by
article nine or thirty-three of this chapter if subject to tax; (ii) a
REIT that is not a captive REIT, and a RIC that is not a captive RIC;
(iii) a New York S corporation; or (iv) an alien corporation that under
any provision of the internal revenue code is not treated as a "domestic
corporation" as defined in section seven thousand seven hundred one of
such code and has no effectively connected income for the taxable year
pursuant to clause (iv) of the opening paragraph of subdivision nine of
section two hundred eight of this article. If a corporation is subject
to tax under this article solely as a result of its ownership of a
limited partner interest in a limited partnership that is doing
business, employing capital, owning or leasing property, maintaining an
office in this state, or deriving receipts from activity in this state,

and none of the corporation's related corporations are subject to tax
under this article, such corporation shall not be required or permitted
to file a combined report under this section with such related
corporations.
(d) A combined report shall be filed by the designated agent of the
combined group as determined under subdivision seven of this section.
3. Commonly owned group election. (a) Subject to the provisions of
paragraph (c) of subdivision two of this section, a taxpayer may elect
to treat as its combined group all corporations that meet the ownership
requirements described in paragraph (a) of subdivision two of this
section (such corporations collectively referred to in this subdivision
as the "commonly owned group"). If that election is made, the commonly
owned group shall calculate the combined business income, combined
capital, and fixed dollar minimum bases of all members of the group in
accordance with subdivision four of this section, whether or not that
business income or business capital is from a single unitary business.
(b) The election under this subdivision shall be made on an original,
timely filed return of the combined group, determined with regard to
extensions of time for filing. Any corporation entering a commonly owned
group subsequent to the year of election shall be included in the
combined group and is considered to have waived any objection to its
inclusion in the combined group.
(c) The election shall be irrevocable, and binding for and applicable
to the taxable year for which it is made and for the next six taxable
years. The election will automatically be renewed for another seven
taxable years after it has been in effect for seven taxable years unless
it is affirmatively revoked. The revocation shall be made on an
original, timely filed return for the first taxable year after the
completion of a seven year period for which an election under this
subdivision was in place. In the case of a revocation, a new election
under this subdivision shall not be permitted in any of the immediately
following three taxable years. In determining the seven and three year
periods described in this paragraph, short taxable years shall not be
considered or counted.
4. Computation of tax bases on a combined report. (a) In computing the
tax bases for a combined report, the combined group shall generally be
treated as a single corporation, except as otherwise provided, and
subject to any regulations or guidance issued by the commissioner or the
department.
(b)(i) In computing combined business income, all intercorporate
dividends shall be eliminated, and all other intercorporate transactions
shall be deferred in a manner similar to the United States Treasury
regulations relating to intercompany transactions under section fifteen
hundred two of the internal revenue code.
(ii) In computing combined capital, all intercorporate stockholdings,
intercorporate bills, intercorporate notes receivable and payable,
intercorporate accounts receivable and payable, and other intercorporate
indebtedness, shall be eliminated.
(c) Qualification for credits, including any limitations thereon,
shall be determined separately for each of the members of the combined
group, and shall not be determined on a combined group basis, except as
otherwise provided. However, the credits shall be applied against the
combined tax of the group. To the extent that a provision of section two
hundred ten-B of this article limits a credit to the fixed dollar
minimum amount prescribed in paragraph (d) of subdivision one of section
two hundred ten of this article, such fixed dollar minimum amount shall
be the fixed dollar minimum amount that is attributable to the
designated agent of the combined group.
(d) (i) A net operating loss deduction is allowed in computing the
combined business income base. Such deduction may reduce the tax on the
combined business income base to the higher of the tax on the combined
capital base or the fixed dollar minimum amount that is attributable to
the designated agent of the combined group. A combined net operating
loss deduction is equal to the amount of combined net operating loss or
losses from one or more taxable years that are carried forward or
carried back to a particular taxable year. A combined net operating loss
is the combined business loss incurred in a particular taxable year
multiplied by the combined apportionment factor for that year determined
as provided in subdivision five of this section.
(ii) The combined net operating loss deduction and combined net
operating loss are also subject to the provisions contained in clauses
one through seven of subparagraph (ix) of paragraph (a) of subdivision
one of section two hundred ten of this article.
(iii) In the case of a corporation that files a combined report,
either in the year the net operating loss is incurred or in the year in
which a deduction is claimed on account of the loss, the combined net
operating loss deduction is determined as if the combined group is a
single corporation and, to the extent possible and not otherwise
inconsistent with this subdivision, is subject to the same limitations
that would apply for federal income tax purposes under the internal
revenue code and the code of federal regulations as if such corporation
had filed for such taxable year a consolidated federal income tax return
with the same corporations included in the combined report. If a
corporation files a combined report, regardless of whether it filed a
separate return or consolidated return for federal income tax purposes,
the net operating loss and net operating loss deduction for the combined
group must be computed as if the corporation had filed a consolidated
return for the same corporations for federal income tax purposes.
(iv) In general, any net operating loss carryover from a year in which
a combined report was filed shall be based on the combined net operating
loss of the group of corporations filing such report. The portion of the
combined loss attributable to any member of the group that files a
separate report for a succeeding taxable year will be an amount bearing
the same relation to the combined loss as the net operating loss of such
corporation bears to the total net operating loss of all members of the
group having such losses to the extent that they are taken into account
in computing the combined net operating loss.
(d-1) A prior net operating loss conversion subtraction is allowed in
computing the combined business income base, as provided in subparagraph
(viii) of paragraph (a) of subdivision one of section two hundred ten of
this article. Such subtraction may reduce the tax on the combined
business income base to the higher of the tax on the combined capital
base or the fixed dollar minimum amount that is attributable to the
designated agent of the combined group.
(e) (i) Any election made pursuant to paragraph (b) of subdivision
six, paragraphs (b) and (c) of subdivision six-a of section two hundred
eight, and item (IV) of subclause two of clause (B) of subparagraph
(viii) and clause seven of subparagraph (ix) of paragraph (a) of
subdivision one of section two hundred ten of this article shall apply
to all members of the combined group.
(ii) The determination of whether or not the limitation on investment
income provided in subparagraph (iii) of paragraph (a) of subdivision
six of section two hundred eight of this article applies to the combined
group shall be based on the investment income of the combined group,
determined without regard to interest expenses attributable to

investment capital or investment income, and the entire net income of
the combined group.
(f)(i) In the case of a captive REIT or captive RIC required under
this section to be included in a combined report, entire net income
shall be computed as required under subdivision five (in the case of a
captive REIT) or subdivision seven (in the case of a captive RIC) of
section two hundred nine of this article. However, the deduction under
the internal revenue code for dividends paid by the captive REIT or
captive RIC to any member of the affiliated group that includes the
corporation that directly or indirectly owns over fifty percent of the
voting stock of the captive REIT or captive RIC shall not be allowed.
For purposes of this subparagraph, the term "affiliated group" means
"affiliated group" as defined in section fifteen hundred four of the
internal revenue code, but without regard to the exceptions provided for
in subsection (b) of that section.
(ii) In the case of a combinable captive insurance company required
under this section to be included in a combined report, entire net
income shall be computed as required by subdivision nine of section two
hundred eight of this article.
(g) If more than one member of a combined group is eligible for any of
the modifications described in paragraphs (r), (s) and (t) of
subdivision nine of section two hundred eight of this article, all such
members must utilize the same modification.
5. Apportionment on a combined report. (a) In determining the
apportionment factor for a combined report, the receipts, net income,
net gains and other items of all members of the combined group, whether
or not they are a taxpayer, are included and intercorporate receipts,
income and gains are eliminated. Receipts, net income, net gains and
other items are sourced, and the amounts allowed in the apportionment
factor are determined, as provided in section two hundred ten-A of this
article.
(b) An election made to apportion income and gains from qualifying
financial instruments pursuant to subparagraph one of paragraph (a) of
subdivision five of section two hundred ten-A of this article shall
apply to all members of the combined group.
6. Liability of combined group members. Every member of the combined
group that is subject to tax under this article shall be jointly and
severally liable for the tax due pursuant to a combined report.
7. Designated agent. Each combined group shall have one designated
agent for the combined group, which shall be a taxpayer. Only the
designated agent may act on behalf of the members of the combined group
for matters relating to the combined report.