New York State Franchise Tax Changes for Utility and TTD Companies

By Rebhun, Brian J. | The CPA Journal, May 2001 | Go to article overview

New York State Franchise Tax Changes for Utility and TTD Companies


Rebhun, Brian J., The CPA Journal


THE REGULATIONS NOW ALLOW THE OFFSET OF INCOME from profitable companies with current and net operating losses of other members of a group.

The New York State Department of Taxation and Finance issued a Technical Services Bureau memorandom [TSB-M-00(04)(C)] on December 19, 2000, to explain the corporate tax law changes for certain utility companies. Previously, utility and TTD (transportation, transmission, or distribution of gas, electricity, or steam) corporations were taxed under separate statutes for New York State corporation tax purposes (N.Y. Tax law sections 186, 183, and 184, respectively).

The notice explains that the New York State corporate tax responsibilities of certain utility corporations became subject to the general corporation tax (Article 9-A) on January 1, 2000. Historically, in New York, utility companies were subject to a tax on gross earnings received from the employment of capital plus a tax on dividends (N.Y. Tax Law section 186). TTD companies were taxed on the net value of capital stock as well as the gross earnings received from conducting busi ness in New York. Now, utility and TID companies are subject to the general corporation tax based on the traditional three-factor formula of property, payroll, and receipts, with receipts double weighted.

Filing changes. Utility and TTD corporations that reported on a fiscal year must file a short-period general corporation tax return for the period beginning on January 1, 2000, and ending on the date their fiscal year ends for federal income tax purposes. Fiscal year taxpayers must use 1999 forms (CT-3, CT3-A, CT-3-S, or CT-3-S-A) and file the returns 2 1/2 months after the end of the fiscal year. Calendar year taxpayers will file general corporation tax returns for the 2000 calendar year using 2000 forms, now available.

Combined reporting. Previously, utility and TTD companies could not file a combined report with related entities that filed under the state's general corporation tax laws. Now, the regulations provide the benefits of combined reporting to utility and TTD corporations that meet the unitary business, capital stock, and distortion conditions. This change allows the offset of income from profitable companies with current and net operating losses of other members of a group and, in some cases, a reduction in the overall allocation of income to New York by aggregating apportionment data across entities.

For tax years ending on or after December 31, 1997, the corporation tax regulations have been amended to remove the necessity for prior permission to file on a combined basis. Instead, a group of corporations wishing to file on a combined basis must provide a combined filer statement (CT-51) and certain other information with its combined franchise tax return.

Exception, Taxpayers considered to be "continuing section 186 taxpayers" will remain subject to the utility tax unless they make an irrevocable election by filing a general corporation tax return on the date or extended date the return is due.

TTD corporations. Under the new rules, TTD corporations must file a final transportation and transmission corporation franchise tax return on capital stock (form CT-183) and a transportation and transmission corporation franchise tax return on gross earnings (form CT-184). Also, if the corporation is subject to the metropolitan transportation business tax surcharge (MTA surcharge), a final transportation and transmission MTA surcharge return (forms CT-183-M and CT-184-M) was due on March 15, 2000, covering the 1999 year.

NOLs. Utility and TTD corporations may claim a net operating loss (NOL) deduction like other general corporate taxpayers, however, they can only deduct NOLs sustained in years in which they were taxable under the general corporation tax.

New York S corporation elections. Under the new law, utility and TTD companies may elect to be treated as a New York S corporation and receive passthrough tax treatment. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

New York State Franchise Tax Changes for Utility and TTD Companies
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.