Oklahoma Administrative Code
Title 710 - Oklahoma Tax Commission
Chapter 50 - Income
Subchapter 17 - Oklahoma Taxable Income for Corporations
Part 3 - CONSOLIDATED RETURNS
Section 710:50-17-34 - Computation of Oklahoma taxable income on consolidated return
Current through Vol. 42, No. 1, September 16, 2024
(a) To arrive at Oklahoma taxable income on a Consolidated Return, the group's consolidated income, loss or deductions shall be determined in accordance with the provisions of 68 O.S. 2358 and 68 O.S. 2362. Therefore, each member of the group shall determine its Oklahoma net taxable income by whatever method is proper (direct accounting, unitary, etc.) and then, the net taxable income of each member shall be aggregated into a taxable total.
Example: The Federal Net Income reported for the following groups of corporations was as follows:
Corporation A | $10,000.00 |
Corporation B | 5,000.00 |
Corporation C | (14,000.00) |
Corporation D | 1,000.00 |
Corporation E | 6,000.00 |
Consolidated Federal Net Income | $8,000.00 |
Assume only corporations (A), (B) and (C) operate in Oklahoma. Also assume corporation (A) and (C) are unitary business while corporation (B) is not of a unitary nature and is on direct accounting. If, in this example, Oklahoma's portion, using the three factor formula, was 10% and 5% for corporations (A) and (C) respectively, and $2,500.00 of Corporation (B) income was earned from sources in Oklahoma, the computation of Oklahoma's taxable income is as follows:
Corporation A (10% of 10,000.00) | $1,000.00 |
Corporation B Direct | 2,500.00 |
Corporation C (5% of (14,000.00)) | (700.00) |
Oklahoma Taxable Income | $2,800.00 |
(On a Consolidated Basis) |
(b) The correct procedure for filing a combined return is as follows:
(c) If it is the Taxpayer's intention to file a combined return but a separate Form 512 for each company is filed, the returns will be treated as separate returns by the Tax Commission.
(d) The taxpayer should state on the face of the Form 512 the following: "This is a combined return-do not separate" .