North Dakota Administrative Code
Title 81 - Tax Commissioner
Article 81-03 - Income Taxes and Privilege Taxes Based on Income
Chapter 81-03-05.1 - Income Tax on Corporations
Section 81-03-05.1-08 - Consolidated returns

Universal Citation: ND Admin Code ยง 81-03-05.1-08

Current through Supplement No. 394, October, 2024

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

General Authority: NDCC 57-38-56

Law Implemented: NDCC 57-38-14

Disclaimer: These regulations may not be the most recent version. North Dakota may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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