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Can you summarize 45 INAC 3.1-1-111?
State Adjusted Gross Income Tax > Membership in affiliated groups; bank holding companies
Short Summary
This legal document pertains to the membership in affiliated groups and bank holding companies under the Adjusted Gross Income Tax Act in Indiana. It adopts the definition of ‘affiliated group’ from the Internal Revenue Code, with the requirement that members must have adjusted gross income derived from sources within the state. Domestic International Sales Corporations (DISC’S) prohibited from filing consolidated returns and banks that are members of an affiliated group for Federal income tax purposes are not included in the affiliated group for Indiana adjusted gross income tax purposes. The document also mentions that any gross income tax liability of a bank must be added separately after the composite tax of the affiliated group has been computed. For supplemental net income tax purposes, the members of an affiliated group, including the banking entity, may compute the supplemental net income tax on a consolidated basis. However, banks are not included in the consolidation under the Adjusted Gross Income Tax Act, so a separate schedule must accompany the consolidated return to compute the adjusted gross income of the affiliated group and the supplemental net income tax liability. In the case of a bank holding company, it may be allowed a special deduction for dividends received from its banking entity for Indiana adjusted gross income tax purposes. The 100% dividend exclusion for holding companies filing a consolidated return does not apply since the banking entity is not taxable under the Act and cannot be part of the consolidation.
Whom does it apply to?
Entities subject to the Adjusted Gross Income Tax Act in Indiana
What does it govern?
Membership in affiliated groups; bank holding companies
What are exemptions?
Domestic International Sales Corporations (DISC'S) prohibited from filing consolidated returns and banks that are members of an affiliated group for Federal income tax purposes
What are the Penalties?
No specific penalties mentioned
Jurisdiction
Indiana