Model Option for Combined Filing Under Finnigan Approach
At the Uniformity Committee’s April, 2018 meeting, a member of the public asked the Committee to consider adding a “Finnigan” option in the Commission’s Model Statute for Combined Reporting, which currently uses the “Joyce” approach. At its July, 2018 meeting, the Uniformity Committee voted to create a working group to draft a “Finnigan” alternative in addition to the “Joyce” approach already in the model.
The question at the center of the Joyce/Finnigan debate is: Are states limited in their ability to tax an apportioned share of the income of a unitary business conducted by multiple legal entities if some portion of that income might be attributed to an entity over which the state lacks taxing jurisdiction? Or, are states permitted to include the sales of P.L. 86-272-protected entities in the sales factor numerator of the group without violating the federal statute?
Model Option for Combined Filing Under Finnigan Approach Reference Information
The model proposed as a result of this project was adopted by the Multistate Tax Commission on August 4, 2021.
See that model, here Model Statute for Combined Filing – Finnigan Approach (Final)
Background Materials
Agendas, working documents, and other project-related information from previous meetings
- Hearing Officer Report – Finnigan Combined Filing – 2020 – with Exhibits
- Submission of Finnigan Alternative to Public Hearing – with model attached, June 9, 2020
- Additional Drafter’s Notes to Proposed Model, June 9, 2020
- Written public comments from COST, June 9, 2020
- Memo to the Uniformity Committee, June 9, 2020
- Finnigan Discussion Draft, 2/21/20
- Consolidated Filing Memo Final Draft, 2/12/20
- Finnigan Draft Section 3, 1/29/20
- Corporate Tax Treatment of Capital Gains and Losses in a Combined Return, 1/15/20
- Memo to Work Group on Capital Gain and Loss, 12/17/19
- Memo to Work Group on Capital Gain and Loss, 12/3/19
- Memo to Work Group on Capital Gain and Loss, 11/18/19
- Illustration of Capital Gain/Loss Alternatives, 11/2019
- IRS 8949
- 1120 Schedule D
- Comparison: Combined Filing Models – Oct. 31, 2019 (opens in Word)
- Memo to Work Group on Capital Gain and Loss, 10/16/19
- Memo to Work Group on Foreign Operations Accounting. 10/16/19
- Comparison of Model Language on Foreign Entity P&L, 10/16/19
- Finnigan draft – 9-4-19 COST Consolidated Election
- Comparison: Combined Filing Models, Sept. 17, 2019
- California Regulation 25106
- Example of the Capital Gain Loss Provisions
- California Audit Manual – Business Income
- California Multistate Audit Manual – Earnings and Profits and Distributions
- Comparison: Combined Filing Models, Sept. 4, 2019
- Comparison: Combined Filing Models, August 21, 2019
- Draft NOL White Paper – July 15, 2019
- NOL Map, July 10, 2019
- Proposed NOL White Paper – draft outline
- NOL Map with Joyce/Finnigan States
- Finnigan Method Discussion Draft, April 11, 2019 (staff edits to April 9, 2019 draft)
- NOL Sharing – Staff Analysis, May 28, 2019
- Finnigan Method Discussion Draft, April 9, 2019
- Analysis of Proposed “Finnigan Method” Combined Reporting Statute
- NOLs Sharing – Staff Analysis
- Finnigan Method Discussion Draft, March 14, 2019 (CLEAN)
- Finnigan Method Discussion Draft, March 14, 2019 (REDLINE, reflecting recent edits)
- Finnigan Method Discussion Draft, March 14, 2019 (REDLINE, reflecting changes from original)
- Finnigan Method Discussion Draft, March 5, 2019
- Finnigan Method Discussion Draft, February 5, 2019
- Finnigan Method January 2019 Discussion Draft
- State Conformity to Federal Consolidated Net Operating Loss Calculations
- California regulations
- December 2018 Discussion Draft
- Combined Reporting Statutory Examples
- Staff suggested model draft legislation for discussion
- Finnigan statutory examples II
- Finnigan statutory examples
- Utah: regulations suggest single taxpayer approach
- Excerpt From Utah’s Financial Institutions Income Apportionment Regulation: Effects of Finnigan Rule on Default Assignment to Commercial Domicile
- Utah Code 59-7-319: Circumstances under which a receipt, rent, royalty, or sale is considered to be in this state
- R865-6F-24: Attribution of Sales of Tangible Property to the Sales Factor for Apportionment of Business Income Pursuant to Utah Code Ann. Section 59-7-317
- TC-20 Corporation Franchise & Income Tax Forms & Instructions
- Massachusetts: Finnigan, but maintains separate taxpayer approach for purposes of calculating liability of each nexus entity
- Schedule U-CI: Combined Income
- Schedule U-M: Member’s Income and Expenses
- Schedule U-MSI: Member’s Apportioned Share of Group Income
- Schedule U-MTI: Member’s Taxable Income from Sources Other Than the Unitary Business
- Schedule U-ST: Member’s Separate Computation of Tax
- Schedule U-TM: Tax By Member
- Schedule F: Income Apportionment
- North Carolina
- Form CD-405 CW (Combined Corporate Income Tax Worksheet)
- Instructions for CD-405 CW (Instructions for Combined Corporate Income Tax Worksheet)
NC C-Corporation Tax Return
Instructions for NC C-Corporation Tax Return
Prior directive on combined filing
- Wisconsin combined filing forms and instructions
- Form 6 and Form 6 Instructions – Wisconsin Combined Return
- Form A-1 and Form A-1 Instructions – Wisconsin Apportionment Data for Single Factor Formulas (single sales factor)
- Form A-2 and Form A-2 Instructions – Wisconsin Apportionment Data for Multiple Factor Formulas
- 2017 Corporation Tax Forms
- Briefing book on Finnigan issue – compiled for July 24, 2018 Uniformity Committee meeting
- Economists’ Background on Joyce/Finnigan
- Joyce/Finnigan states
- Notes on Throwback Rule
- Joyce/Finnigan Throwout and Throwback example
- Joyce/Finnigan Throwout and Throwback example – comparison of taxable income where 25% of out-of-state sales are not taxable in other states
- MTC’s model uniform rules for combined reporting
- NCSL Principles of State Implementation after South Dakota v. Wayfair
- Cases
- In the matter of the appeal of Joyce, Inc., 66-SBE-070
- In the matter of the appeal of Finnigan Corporation, 88-SBE-022
- In the matter of the appeal of Finnigan Corporation, 88-SBE-022-A
- In the matter of the appeal of The Nutrasweet Company, 92-SBE-024
- In the matter of the appeal of Huffy Corporation, 99-SBE-005
- In the matter of the appeal of Huffy Corporation, 99-SBE-005-A
- Matter of Disney Enter., Inc. v. Tax Appeals Trib., 888 N.E.2d 1029 (2008)