Current through August 31, 2023
Section
63-3027(22),
Idaho Code
01.
Combined
Report. Each corporation that is a member of a unitary business
transacting business within and without Idaho is to allocate and apportion its
income to Idaho using a combined report pursuant to Rules
360 through
369 of these rules. See Rules
340 through
344 of these rules for the
principles for determining the existence of a unitary business.
(4-6-23)
02.
Domestic
International Sales Corporations. If an affiliated group subject to the
income tax jurisdiction of Idaho owns more than fifty percent (50%) of the
voting power of the stock of a corporation classified as a Domestic
International Sales Corporation (DISC) pursuant to the provisions of Section
992, Internal Revenue Code, a
combined filing with the DISC is required. (4-6-23)
03.
Foreign Sales Corporations.
If an affiliated group subject to the income tax jurisdiction of Idaho owns
more than fifty percent (50%) of the voting power of the stock of a corporation
classified as a Foreign Sales Corporation (FSC) pursuant to the provisions of
Section 922, Internal
Revenue Code, a combined filing with the FSC is required. (4-6-23)
04.
Intercompany Transactions.
If a return is filed on a combined basis, the intercompany transactions are to
be eliminated to the extent necessary to properly reflect combined income and
to properly compute the apportionment factor. (4-6-23)
a. Dividends received from a real estate
investment trust or a regulated investment company and not included in the
pre-apportionment tax base as a result of the federal deduction for dividends
paid allowed to the dividend payor are not eliminated as intercompany
transactions in computing combined income. (4-6-23)
b. Internal Revenue Code Section
1248 Dividends. (4-6-23)
i. Taxpayers Using the Worldwide Filing
Method. A corporation included in a worldwide combined group is to treat
Section 1248
dividends as dividends for Idaho income tax purposes. An intercompany dividend
elimination is allowed to the extent dividends received are paid from current
or prior year earnings previously included in income subject to apportionment.
(4-6-23)
ii. Taxpayers Using the
Water's Edge Filing Method. A corporation included in a water's edge combined
group is to treat Section
1248 dividends as dividends that
qualify for the dividend exclusion allowed by Section
63-3027C(c)(1),
Idaho Code. (4-6-23)
c.
Dividends received from a stock insurance subsidiary and deducted by a mutual
insurance holding company or an intermediate holding company pursuant to
Section 41-3821, Idaho Code, are not
eliminated as intercompany transactions in computing combined income.
(4-6-23)
05.
Insurance Companies. Pursuant to Section
41-405, Idaho Code, payment of an
Idaho tax upon an insurance company's premiums will be in lieu of an income
tax. (4-6-23)
a. If an insurance company is a
member of a unitary business and pays the Idaho premium tax, the insurance
company is to be included in the combined group and its income and factor
attributes included in the combined report. The income tax attributable to the
insurance company is to be deducted from the total tax computed in the combined
report. Income tax credits that the insurance company may have earned may not
be shared with other members of the unitary group. (4-6-23)
b. If an insurance company is a member of a
unitary business and pays a premium tax to a state other than Idaho, or does
not pay a premium tax to any state, the insurance company is to be included in
the combined group and its income and factor attributes included in the
combined report. The insurance company is liable for the Idaho income tax
computed on its activity in Idaho and is not exempt from the income tax as a
result of Section 41405,
Idaho Code. (4-6-23)
