Ohio Tax - Manufacturers' Education Council

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2011 Ohio Tax Conference Ohio Commercial Activity Tax (CAT) Audit Experiences Appendix A Example JV-2. The Department was conducting an audit of RS who had filed as a consolidated elected group at 50%. Neither 50% owner (Mr. R or Mr. S) was included in the group nor chose to have a consolidated elected group at 50%. Upon audit, the Department determined that neither Mr. R nor Mr. S had more than $4,500 in taxable gross receipts. The question arose — could RS choose a 50% consolidated group when neither of its common owners elected 50% consolidation The Department determined that RS could make the election. Diagram JV-2. Mr. R Mr. S 50% RS 50% TUV 100% IJK WXY LMN ZAB OPQ CDE RST FGH SJW 95% 5% 82%
2011 Ohio Tax Conference Ohio Commercial Activity Tax (CAT) Audit Experiences Appendix A Example JV-3. The Department was conducting an audit of DEF and identified the joint venture (LLC) between DEF and XYZ. DEF filed as part of a combined taxpayer group and XYZ filed as part of a 50% consolidated elected group. Upon audit, the Department determined that XYZ would be required to pick up 100% of LLC’s taxable gross receipts because it constructively owns 50% of LLC. Diagram JV-3. DEF XYZ 100% 100% 50% A B 49% 1% LLC Multiple Groups Example MG-1. Taxpayer initially filed three separate consolidated elected groups at 80%: Group 1: J, E, M and T (black shaded) Group 2: S and O (diagonal lines) Group 3: Y, Z and A (grey shaded) Under review, the Department determined that E constructively owned 100% of S and O and as a result the Department included S and O in the consolidated elected group of J, E, M and T. Further, the Department determined that a taxpayer cannot have more than one consolidated elected group within the same corporate structure. As a result, we eliminated the consolidated group of Y, Z and A. Y, Z and A was forced into a combined return with J, their common owner. (Note: J’s gross receipts would be reported with the consolidated elected group and not the combined group.) Based on the changes, S and O’s $1,000,000 exclusion was eliminated and the inter-member exclusion between Y, Z and A was eliminated. 5
Page 1 and 2: Ohio Tax Workshop S Ohio CAT, Nexus
Page 3 and 4: Biographical Information Laura M. S
Page 5 and 6: Presenters Michael Baker • State
Page 7 and 8: LL Bean Case / Constitutional Nexus
Page 15 and 16: Filing Group Issues 12
Page 17 and 18: Filing Group Issues • Changes in
Page 19 and 20: Filing Group Issues Comparison of C
Page 21 and 22: Filing Group Issues • Complex Fil
Page 23 and 24: Filing Group Issues • Complex Fil
Page 25 and 26: Example MG-1 K J Taxpayer initially
Page 27 and 28: Types of Gross Receipts (See Append
Page 29 and 30: Sourcing Issues 26
Page 31 and 32: Sourcing Issues • Intangibles - O
Page 33 and 34: Sourcing Issues • Services - ORC
Page 35 and 36: Sourcing Issues • Tangible Person
Page 37 and 38: Sourcing Issues • Tangible Person
Page 39 and 40: Miscellaneous Issues 36
Page 41 and 42: Administrative Update - Voluntary D
Page 43 and 44: Administrative Update - Penalties
Page 45 and 46: Contact Information Michael Baker,
Page 47 and 48: 2011 Ohio Tax Conference Ohio Comme
Page 49: 2011 Ohio Tax Conference Ohio Comme
Page 55 and 56: 11. Government contracts 2011 Ohio
Page 59 and 60: 32. Oil Exchanges 2011 Ohio Tax Con
Page 61 and 62: 42. Rewards points program 2011 Ohi
Page 63 and 64: 52. Foreign common owner 2011 Ohio

Ohio Tax - Manufacturers' Education Council

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