Unitary Business Groups
A unitary business group is a group of two or more persons that are corporations, insurance companies or financial institutions that satisfy both a control test and one of two relationship tests. The control test is satisfied when one person owns or controls, directly or indirectly, more than 50% of the ownership interest with voting or comparable rights of the other person or persons. The relationship test is met if the group has business activities or operations that either (1) result in a flow of value between or among persons in the group, or (2) are integrated with, are dependent upon, or contribute to each other. Foreign persons and foreign operating entities are excluded from a unitary business group.
Unitary groups are treated as a single taxpayer. Unitary returns are filed by taxpayer type: either corporation or financial institution. Insurance companies do not file combined returns. Transactions between members of the group are eliminated from calculation of the tax base and apportionment factor. Further, transactions with financial institution and insurance company members of the group are eliminated from the corporate unitary return.