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Selling a business unit requires closely examining a myriad of potential commercial and financial outcomes Early cases the unitary business principle originated in the united states in the 19th century with state property taxes and transcontinental railroad and express companies. For state corporate income tax purposes, one of the most critical considerations is the unitary business principle.
Means a single economic enterprise that is made up either of separate parts of a single business entity or of a group of business entities under common ownership that are sufficiently interdependent, integrated, and interrelated through their activities so as to provide a synergy and mutual benefit that produces a sharing or exchange of value among them and a. The supreme court has since ordained the unitary business principle as the ‘‘linchpin of apportionability in the field of state income taxation.’’ 3 a Bear in mind that the unitary business principle is neither synonymous with nor inseparable from combined reporting
Because most states either statutorily require or permit some method of combined reporting, it is important for taxpayers to understand the intricacies of and opportunities in combined reporting statutes and regulations
It first examines how the states apply the unitary business principle, which is unique, and then dis cusses some of the historical and constitutional influences that have shaped state corporate income tax practices. (1) this rule is based partially on a model regulation adopted by the multistate tax commission to promote uniform treatment of the unitary business principle by the states Sections (3) through (10) of this rule apply to tax years beginning on or after january 1, 2007 However, the principles outlined in those sections may also be applied to years prior to 2007 to the extent that they reflect.
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