1 Department of Revenue Services Form CT-1120U. State of Connecticut (New 12/03). Unitary Corporation business Tax return Instructions GENERAL INFORMATION. Who May File Form CT-1120U. Form CT-1120U, Unitary Corporation business Tax election to file a Unitary return must be made by the electing return , may be filed by a taxpayer in two situations: corporations not later than the due date or the extended 1. Taxpayer is subject to interest add back. due date of the returns for which the election is made. The election to file a Unitary return must be in effect for at If the taxpayer in computing net income under Conn. least five income years, and will continue in effect Gen. Stat. 12-217, is required to add back otherwise thereafter until it is revoked.
2 Deductible interest expenses and costs directly or indirectly paid, accrued, or incurred to one or more Change of Election related members, the taxpayer may elect to calculate Any Corporation that has elected to file a Unitary return its tax on a Unitary basis using Form CT-1120U, may subsequently revoke its election; however, the including all members of the Unitary group provided revocation will not be effective before the fifth income year there are substantial intercorporate business immediately following the initial income year in which the transactions among such included corporations. Corporation elected to file a Unitary return . The election (See 2003 Conn. Pub. Acts 6, 78 (June Spec. Sess.);. to discontinue the Unitary filing must be submitted in writing or on Form CT-1120CC-R, Revocation of Election and 2.)
3 Taxpayer petitions for and is granted approval Consent to File Combined Corporation business Tax by the Commissioner of Revenue Services return , by each Corporation included in the Unitary return , (Commissioner) to file on a Unitary method. and the election must be made by the electing corporations by the due date or the extended due date of If the taxpayer petitions the Commissioner to file a the return for the initial income year for which the election combined Corporation business tax return on a Unitary is made. basis, because the statutory method of determining the taxpayer's combined measure of the tax is deemed Calculation of the Unitary Tax by the taxpayer to unfairly attribute an undue The Unitary return is subject to the following: proportion of its taxable income or minimum tax base to Connecticut, and the petition is granted by the z The Unitary group must meet the definition of a Unitary Commissioner, the taxpayer may calculate its tax on business as set forth above.
4 A Unitary basis using Form CT-1120U. z Each Corporation included in the Connecticut Unitary group must complete a separate Form CT-1120, Definition of a Unitary business Corporation business Tax return ;. A Unitary business is characterized by significant flows of value evidenced by factors such as those described z The Unitary group must use a three factor in Mobil Oil Corp. v. Vermont, 445 425 (1980): apportionment formula consisting of property, payroll, functional integration, centralization of management, and and double weighted gross receipts under Conn. Gen. economies of scale. These factors provide evidence of Stat. 12-218(c);. whether the business activities operate as an integrated z Each Corporation included in the Unitary group is whole or exhibit substantial mutual interdependence.
5 Subject to the minimum tax under Conn. Gen. Facts suggesting the presence of the factors mentioned Stat. 12-219;. above should be analyzed in combination for their cumulative effect and not in isolation. z The Unitary group is subject to the surtax;. z The Unitary group must calculate the capital base Consent and Notice of Election tax under Conn. Gen. Stat. 12-219 on a Unitary basis. Each Corporation that consents to be included in a Unitary In calculating the capital base tax, intercompany Corporation business Tax return must submit Form stock holdings should be eliminated;. CT-1120CC, Combined return Consent, for the initial income year for which the election is being made. The Form CT-1120U Instructions (New 12/03) Page 1 of 8.
6 Z The Unitary group must complete and attach Form When to File Form CT-1120U. CT-1120Q, Connecticut Corporate Unitary Every Corporation must file a return on or before the first Questionnaire, located on the Department of Revenue day of the month following the due date of the company's Services (DRS) Web site at ; and corresponding federal income tax return for the income z The Unitary group must complete and attach Form year (April 1 for calendar year taxpayers). In the case of CT-1120AB, Add Back and Exceptions to Add Back any company that is not required to file a federal income of Interest and Intangible Expenses, located on tax return for the income year, the Connecticut Unitary the DRS Web site, if applicable. Corporation business tax return is due on or before the first day of the fourth month following the end of the income Special Instructions for First Year Unitary year.
7 If the due date falls on a Saturday, Sunday, or legal Filers holiday, the next business day is the due date. The return z The Unitary group cannot use net operating losses will meet the timely filed and timely payment rules if the that have been carried forward from returns filed Postal Service cancellation date, or the date recorded prior to the establishment of the Connecticut or marked by a designated private delivery service (PDS). Unitary group. Only losses incurred by the Unitary using a designated type of service, is on or before the group in the first year of the Unitary return (and due date. Not all services provided by these designated thereafter) can be taken on the Unitary return ; PDSs qualify. z The Unitary group cannot use tax credits that The following are the designated PDSs and designated were earned prior to the establishment of the types of service at the time of publication: Connecticut Unitary group.
8 Only tax credits earned Airborne Express DHL Worldwide Express by the Unitary group in the first year of the Unitary (Airborne) (DHL). return (and thereafter) can be claimed on the Unitary Overnight Air Express Service DHL Same Day Service return ; and Next Afternoon Service DHL USA Overnight Second Day Service z If the taxpayer elects to file on a Unitary basis, the Federal Express United Parcel Service election is irrevocable for five successive income (FedEx) (UPS). years. FedEx Priority Over night UPS Next Day Air FedEx Standard Overnight UPS Next Day Air Saver General Computation FedEx 2 Day UPS 2nd Day Air FedEx International Priority UPS 2nd Day Air The Unitary tax shall be measured by the combined entire FedEx International First UPS Worldwide Express Plus net income of all the corporations included in the return UPS Worldwide Express as if they were one Corporation .
9 In computing combined entire net income, intercorporate dividends shall be This list is subject to change. See Policy Statement eliminated. The combined entire net income of such 2002(4), Designated Private Delivery Services and corporations shall be apportioned to Connecticut as if Designated Types of Service. they were one Corporation , and the provisions of If Form CT-1120U is filed late, see Interest and Penalties Conn. Gen. Stat. 12-223b governing intercompany on Page 3, to determine if interest and penalty should be rents and business receipts shall apply. reported with this return . Attachments Required Extension Request Attach to Form CT-1120U, a complete copy of the federal To get an extension of time to file the annual return , the consolidated return , including income statements and Unitary group must file Form CT-1120 EXT, Application balance sheets, federal M-1 adjustments, and a schedule for Extension of Time to File Corporation business Tax of intercompany eliminations as filed with the Internal return , not later than the first day of the month following Revenue Service (IRS).
10 The due date of the Unitary group's corresponding federal Form CT-1120 must be completed and attached to Form income tax return for the income year (April 1 for calendar CT-1120U, for each Corporation included in the Unitary year taxpayers). In the case of any company not required group. to file a federal income tax return for the income year, the extension request must be filed on or before the first day All applicable tax credit forms, schedules, any other of the fourth month following the end of the income year. required forms, and any letters of approval or eligibility Payment of the total tax due must be included with the received from the agency administering the tax credit must request. The timely filing of Form CT-1120 EXT will be attached to and made part of this tax return for each automatically extend the due date for six months.