Form Fit-20 - Financial Institution Tax Booklet - 2013 Page 5
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30Partnerships
(e) In any other fiduciary capacity, including holding title
to real property in Indiana.
Partnerships and trusts as entities are not subject to the franchise
tax. However, partnerships and trusts having corporate partners
Method of Reporting
or corporate grantors and beneficiaries where the entity is
conducting the business of a financial institution are required to
A taxpayer is allowed to file a separate return only in those
file a partnership return, Form IT-65.
instances where the taxpayer is not a member of a unitary
group. Members of a unitary group must file collectively on one
The following guidelines should be considered when preparing
combined return. No provision is made for filing consolidated
an informational return for a financial institution that is a
returns.
partnership:
(1) If the entity is a partnership and has nonresident
If the taxpayer is a member of a group, combined reporting is
corporate partners, the partnership is required to
mandatory. However, if the taxpayer determines that its Indiana
withhold and remit the nonresident corporation’s tax
income is not accurately reflected by the filing of a combined
liability on its apportioned income if the nonresident
return, the taxpayer can petition the department by indicating on
corporation is not otherwise a taxpayer for purposes
its annual return that the return is a separate return made by a
of the tax. The apportioned income attributable to the
member of a unitary group. Such petition is subject to approval by
partner is the same percentage as its distributive share. If
the department. The petition must include the name and federal
the corporate partner is otherwise subject to the franchise
identification number of each member of the group petitioning
tax, the corporate partner is responsible for the tax in
for an alternative method. Each member must include its
accordance with its percentage share of the partnership’s
justification for the alternative method.
adjusted gross income or apportioned income.
Petitions can also be sent to:
(2) If a resident corporate partner is not otherwise subject to
Indiana Department of Revenue
the tax, the corporate partner must pay the tax liability
Tax Policy Division
attributable to its partnership income. The income
100 N. Senate Ave.
attributed to the corporate partner’s share that has been
Room N248
subject to the franchise tax would not be included in the
Indianapolis, IN 46204
income calculation for purposes of the Indiana adjusted
gross income tax.
Members of a Unitary Group
The combined return shall include the adjusted gross income of
(3) If a corporation is a financial institution that is also a
all members of the unitary group that are transacting business
partner in a partnership and the partnership is transacting
wholly or partially within Indiana. The statute provides exclusion
the business of a financial institution in Indiana, the
for the income of corporations or other entities organized in
partner is a taxpayer for purposes of the financial
foreign countries, except a federal or state branch of a foreign
institution franchise tax.
bank or its subsidiary that transacts business in Indiana.
Example: A bank in Maine is a partner with a bank in Indiana
“Unitary business” means business activities or operations that
to make loans to Indiana borrowers. The only activity of the
are of mutual benefit, dependent upon or contributory to one
Maine bank is its involvement in the partnership. The partnership
another, individually or as a group, in transacting the business
is required to withhold the Maine bank’s share of the financial
of a financial institution. The term can be applied within a
institution tax.
single entity or between multiple entities and without regard to
whether each entity is a corporation, partnership, or trust. Unity
United States Government Obligations
is presumed if there is unity of ownership, operation, or use as
Although interest earned on U.S. obligations is not subject to
evidenced by centralized purchasing, advertising, accounting, or
income taxation, it is not preempted by federal law from being
other controlled interaction among entities that are members of
included in the tax base of a franchise tax. Therefore, interest
the unitary group as defined in IC 6-5.5-1-18(a).
from U.S. obligations is not to be subtracted from federal taxable
income in determining the tax base of the franchise tax.
Unity of ownership exists for a corporation if it is a member of a
group of two or more business entities, 50% of whose voting stock
Extensions for Filing
is owned by a common owner or owners or by one or more of the
member corporations of the group.
The department accepts the federal extension of time application
(Form 7004) or the federal electronic extension. If you have one,
The taxpayer designated as the reporting member of a unitary
you do not need to contact the department prior to filing your
group shall file a combined return that includes all operations of
annual return. Returns postmarked within 30 days after the last
the unitary business. List members included in the combined
date indicated on the federal extension will be considered timely
return by completing FIT-20 Schedule H on page 4 of the
filed. If you do not need a federal extension of time but need one
return. See page 19, Instructions for Filing a Combined Return.
for filing your state return, submit a letter requesting such an
extension to the department prior to the due date of your annual
return.
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