What is a unitary business?
A unitary business is defined by RSA 77-A:1 XIV as ‘one or more related business organizations engaged in business activity both within and without this state among which there exists a unity of ownership, operation, and use or an interdependence in their functions.’ The department’s administrative rules define each of these terms: Unity of Ownership; Unity of Operation; Unity of Use; Interdependence in their function. Select here to access the Laws and Rules page where Rev 300 and other administrative rules and laws may be accessed.
A unitary business is one that operates as a unit and can’t be segregated into independently operating divisions or branches. The operations are integrated, and each division or branch is dependent upon or contributory to the operation of the business as a whole. It isn’t necessary that each division or branch operating in Wisconsin contribute to the activities of all divisions or branches outside Wisconsin.
” and “Was Mead Corporation, the predecessor in interest and wholly owned subsidiary of MeadWestvaco Corp., correctly taxed as a unitary business for capital gains tax treatment when it sold its Lexis business division?” Here is the way the argument unfolded, derived mostly from the Syllabus of the case. First a few background facts: “Illinois taxed a capital gain realized by Mead, an Ohio corporation that is a wholly owned subsidiary of petitioner, when Mead sold its Lexis business division. Mead paid the tax and sued in state court. The trial court found that Lexis and Mead were not unitary because they were not functionally integrated or centrally managed and enjoyed no economies of scale. It nevertheless concluded that Illinois could tax an apportioned share of Mead’s capital gain because Lexis served an operational purpose in Mead’s business. Affirming, the State Appellate Court found that Lexis served an operational function in Mead’s business and thus did not address whether Mea
A “unitary business” is defined in the combined reporting statute (sec. 71.255(1)(n), Wis. Stats.) as a single economic enterprise made up of one or multiple related entities which are sufficiently interdependent, integrated, and interrelated through their activities so as to provide a synergy and mutual benefit that produces a sharing or exchange of value among them and a significant flow of value to the separate parts. The statute provides that entities are presumed to be a unitary business if the entities have unity of ownership, operation, and use as indicated by the presence of one or more specific factors. These factors include: • Centralized management; • Centralized executive force; • Centralized purchasing, advertising, or accounting; • Intercorporate sales or leases; • Intercorporate services, including administrative, employee benefits, human resources, legal, financial, or cash management services; • Intercorporate debts; • Intercorporate use of proprietary materials; • Int
A. A unitary business is an integrated economic enterprise. One example is a retail business with transportation, storage, real estate management and marketing subsidiaries. If that company also owns a subsidiary cattle ranch, with independent management and sales to outside buyers, the subsidiary would not be part of the unitary business. If the subsidiary sold its beef in the retail stores, however, it would be part of the unitary business.
