Spotlight on District of Columbia: D.C. Enacts Mandatory Unitary Combined Reporting


July 29, 2011

As we addressed in our July 19, 2011 Alert, Mayor Gray of the District of Columbia has signed the legislation comprising the "Fiscal Year 2012 Budget Support Act of 2011." That Act includes legislation requiring related groups of corporations engaged in a "unitary business," as defined by the new Act, to file and report taxable income to D.C. using the unitary combined reporting method. This fundamental change in D.C.'s corporation franchise tax will have wide-ranging effects on C corporations, S corporations, flow-through entities and their corporate owners, doing business in the District. The new Act is effective for taxable years that began on or after December 31, 2010.

Unfortunately, the Act does not address an entire range of technical issues and questions. You can read our comments regarding those issues and questions in our July 19, 2011 Alert.

The Act must complete a 30-day Congressional review period in which a "day" is counted only when the U.S. House of Representatives and U.S. Senate are in session. We estimate this period will end on or about October 1, 2011.

If you are interested in how this District of Columbia corporate income tax development may affect your company or affiliates, please contact one of the following attorneys in the Firm's Tax Department:

Washington, D.C.
Scott D. Smith 202.508.3430
James W. McBride 202.508.3467

Atlanta, Georgia
Nedom A. Haley 404.221.6505
Michael M. Smith 404.589.3419
Michael S. Evans 404.221.6517

Birmingham, Alabama
Thomas J. Mahoney Jr. 205.250.8346
William R. Sylvester 205.250.8372

Jackson, Mississippi
Stacy E. Thomas 601.351.2484
Jon D. Seawright 601.351.8921
David P. Webb 601.969.4678
D. Nathan Smith 601.969.4682

New Orleans, Louisiana
Robert W. Nuzum 504.566.5209
Robert L. Wollfarth 504.566.8623

Baton Rouge, Louisiana
Alton E. Bayard III 225.381.7019

Chattanooga, Tennessee
Carl E. Hartley 423.756.2010
Virginia C. Love 423.209.4118

Memphis, Tennessee
William H.D. Fones Jr. 901.577.2247
Charles E. Pierce 901.577.2164

East Memphis, Tennessee
James R. "Josh" Hall Jr. 901.579.3126
Christopher J. Coats 901.579.3127

Knoxville, Tennessee
L. Eric Ebbert 865.971.5182