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PS 90-5
Connecticut Corporation Business Tax Combined Return Filing Requirements Applicable to Section 12-223a(1) of the Connecticut General Statutes
This Policy Statement is superseded by PS 92(1)
This Policy Statement is a restatement of the Department of Revenue Services' policies regarding the filing of combined returns pursuant to Section 12-223a(1) of the Connecticut General Statutes. Section 12-223a(1) of the Connecticut General Statutes allows corporations included in a consolidated federal income tax return to elect to file a combined corporation business tax return. By making such an election, each member of the combined group accepts and becomes liable for the entire tax (including penalties and interest) due from the combined group for each year the member is included in the combined return. Liability, for the income years included in the combined return, is not extinguished by either discontinuing the filing of combined returns at a later date or due to a corporation leaving the combined group for any other reason.
The following conditions must be met in order for an election to file a combined return to be valid:
1) Each corporation in the consolidated group which either conducts business in the state of Connecticut or possesses a certificate of authority to transact business in the state of Connecticut must be included in the combined return filed.
2) Each corporation included in a combined return must consent in written form to the Commissioner of Revenue Services to be included in such return by the due date or extended due date of the first return in which the corporation is included. Form 208CC must be filed for the purpose of making such consent.
3) A combined return, once filed, cannot be amended to include corporations excluded from the combined return.
A separate return, once filed, cannot be amended to file an election to be taxed as part of a combined group.
4) The properly completed return must be filed on or before the due date or extended due date of returns for all electing combined group members.
Failure to submit a proper combined return constitutes an invalid election and will result in an assessment of the tax liability of each member of the combined group determined on the basis of separate returns.
An election to discontinue the filing of combined returns must be filed with the Commissioner of Revenue Services prior to the beginning of the income year for which separate returns will first be filed. The election to return to separate filing status is irreversible and no future election to file combined returns will be possible. Corporations which discontinue filing consolidated federal returns must file separate Connecticut Corporation Business Tax returns for any applicable years. The corporation must also resume filing combined returns upon resumption of consolidated filing of federal tax returns. A copy of the consent to a discontinuance received from the Internal Revenue Service shall be filed with each separate return for the applicable year(s).
In the event of a merger, dissolution, or sale of a subsidiary corporation(s), leaving only one corporate filer in the combined group, a separate return will be filed for future years. A combined return may be elected, however, if a member of the consolidated group later becomes subject to the tax in Connecticut.
Separate income statements and balance sheets are required for each member of the combined group. In addition, the consolidated federal income tax return income statement and balance sheet are to be attached to the combined return.
The filing of a combined return with the Department of Revenue Services does not constitute agreement that the return has been properly filed. All returns are subject to audit or review at a later date.
Issued: 7-90