2004 Form Tc-20 Utah Corporation Franchise Or Income Tax Return And Instructions (Page 4 of 19) in pdf

Combined Reports

Recurring Seasonal Exception

A corporation with recurring seasonal income may

Any corporation owned by another corporation, or

annualize its income before determining the amount of

owning more than 50 percent of another corporation, or

each installment. It is recommended federal guidelines

a group of corporations related through common own-

be followed in determining seasonal income. If the

ership (i.e., certain brother/sister corporations) and

corporation meets the seasonal exception at the fed-

engaged in unitary business activity, must file a com-

eral level for any installment indicate by checking the

bined report, including the combined income of all such

appropriate box(es) on form TC-20, Schedule A line 25.

corporations.

Prepayment of Minimum Tax

Unitary Business

Corporations that meet the prepayment requirement in

the current year and that had a tax liability of $100 (the

A unitary business exists if the activities of the corpora-

minimum tax) for the previous year may choose to

tions (subsidiary or affiliated corporations related through

prepay the minimum tax amount of $100 on the 15th

common ownership) are economically interdependent

day of the 12th month instead of four increments of $25.

as demonstrated by the following factors:

Corporations that met the prepayment requirement in

• Strong centralized management

the previous year and have a tax liability of $100 (the

• Functional integration

minimum tax) in the current year may choose to prepay

• Attainment of operational economies of scale

the minimum tax amount of $100 on the 15th day of 12th

month instead of four increments of $25. In this sce-

Water’s Edge Combined Report

nario, the corporation must pay $100, not 90 percent.

A unitary group is required to file on a water’s edge

The Tax Commission will calculate the penalty for

basis unless the worldwide combination method has

underpayment of required estimated tax payments.

been elected. A water’s edge combined report includes

Taxpayers who would like to calculate their own penalty

the income and activities of all members of a unitary

may contact the Tax Commission at (801) 297-7790 or

group that are:

1-800-662-4335 ext. 7790 for assistance.

• Corporations organized or incorporated in the United

States, including those corporations qualifying for

Interest

the Puerto Rico and Possession Tax Credit as

provided in IRC Section 936; and

Interest will be assessed at the rate prescribed by law

from the original due date until any outstanding liability

• Corporations organized or incorporated outside of

is paid in full. The interest rate for most taxes and fees

the United States meeting the threshold level of

administered by the Tax Commission for the 2005

business activity.

calendar year is 4 percent.

Water’s Edge Election

Pub 58, which contains applicable interest rates, is

A group of corporations that are not otherwise a unitary

available on the Internet at tax.utah.gov or by calling or

group may elect to file a water’s edge combined report

writing the Tax Commission.

under UCA §59-7-402(2) if each member of the group

is:

Suspension for Failure

• Doing business in Utah;

to Pay Tax Due

• Part of the same affiliated group; and

Utah law provides for suspension of a corporation’s

• Qualified under IRC Section 1501 to file a federal

right to do business in Utah if it fails to pay taxes due

consolidated return.

before 5:00 p.m. on the last day of the 11th month after

Each corporation within the affiliated group doing busi-

the due date.

ness in Utah must consent to filing a combined report.

If a corporation owes tax and is unable to pay all or a

If an affiliated group elects to file a combined report,

portion of the amount owed, the corporation may com-

each corporation within the affiliated group doing busi-

plete form TC-804B, Payment Agreement Request.

ness in Utah must file a combined report.

The form can be obtained online at tax.utah.gov.

Corporations that elect to file a water’s edge combined

report under this section may not thereafter elect to file

Supporting Federal

a separate return without the consent of the Tax Com-

Information

mission.

Worldwide

Federal form 1120, pages 1-4, as filed with the IRS,

should be attached when filing the Utah Corporation

A unitary group may elect to file a worldwide combined

Franchise or Income Tax Return, TC-20. If you are

report. When the worldwide combined reporting method

required to file the form 1120, Schedule M-3 with your

is elected, the income/loss of each corporation within

federal return, include a copy with your Utah return also.

the unitary group must be included regardless of the

Other detail schedules should NOT be included with the

country in which the corporations are incorporated or

Utah return unless otherwise specified in these instruc-

conduct business.

tions. The Auditing Division of the Tax Commission

may request these detail schedules at a later date.

Page 3

2004 Form Tc-20 Utah Corporation Franchise Or Income Tax Return And Instructions Page 4

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