How B26-0708 changes current law

Compared against the D.C. Code as published AI-generated reading aid — verify against the official bill.

The bill amends the process of combined reporting for tax purposes to implement the Finnigan method of apportionment and makes several related changes to definitions and procedural requirements.

• D.C. Code § 47-1805.02b

  For tax years beginning after December 31, 2025, a combined group of entities will be treated as one taxpayer for purposes of sourcing unitary receipts, as required by this chapter, and the apportionment factor attributes in the numerator, as required by this chapter, will be derived from all the members of the combined group, regardless of whether a member has nexus with the District of Columbia.

  This change transitions the method of apportionment for combined reporting from the Joyce method to the Finnigan method after the specified date, impacting how unitary receipts are reported.

• Section 47-1001.04

  ‘Combined group’ is repealed. → ‘Combined group’ means the group of persons that must file a combined return as required by § 47-1805.02a-1, Combined return required; joint and several liability.

  This alters the definition of 'combined group' to specify that it refers to entities required to file under the new combined return regulations.

• Section 47-1805.02a

  Sections 47-1805.02a, Combined reporting required, and 47-1810.06, Designation of agent, are repealed. → A new section 47-1805.02a-1, Combined return required; joint and several liability of the District of Columbia Official Code is added.

  This establishes a new section for combined returns, defining requirements and responsibilities for filing combined returns for the combined group.

• Section 47-1810.05

  Sections 47-1810.04, Determination of taxable income or loss using combined report; components of income subject to tax in the District, application of tax credits and post-apportionment deductions; determination of taxpayer's share of the business income of a combined group apportionable to the District, and 47-1810.05, Determination of the business income of the combined group, are repealed. → A new section 47-1810.05A, Determination of the business income of the combined group, of the District of Columbia Official Code is added.

  This repeals outdated provisions and introduces a new method for determining the business income of the combined group.

• A new subsection (33A) is added as follows: 'Nexus' means the physical, economic, electronic, or virtual presence or connection between a taxpayer and the District of Columbia, whether the presence or connection is direct or indirect.

  This adds a definition of 'nexus' to clarify the connection between businesses and the District for tax purposes.