When filing a combined report, should the reporting entity include entities in which there is part ownership, but not more than 50%?
No. An affiliated group is defined as “entities in which a controlling interest is owned by a common owner, either corporate or noncorporate, or by one or more of the member entities.” Controlling interest means an ownership interest (directly or indirectly) of more than 50%. Neither the Affiliate Schedule, Form 05-166, or the Affiliate List, Form 05-165, should include any entity where the ownership interest is 50% or less. If ownership interest is 50% or less in every entity owned, a combined report is not due. Each entity must file a separate report. This is not to be confused with the reporting requirements when an entity files the Public Information Report or Ownership Information Report as a part of the franchise tax report filing. An entity filing either form must report information on each entity of which it owns 10% or more, and on each entity which owns 10% or more of the reporting entity.
Related Questions
- Which entities file the Public Information Report, Form 05-102, and which entities file the Ownership Information Report, form 05-167?
- If an entity is a member of a combined group, will it be required to file a final franchise tax report?
- Why does my entity need to provide a Principal Office Address when filing a Periodic Report?
