CNW Election
Entities that have made the CNW election will report their net worth on this schedule
What is Schedule F2?
The auditor will recommend Denial of the early revocation if...
What is the auditor determines that there is no good or reasonable cause for the early revocation?
This head of the department will approve CNW late or early elections and exclusions
Who is the Commissioner?
The CNW election remains in effect until the affiliated group revokes it.
What is Yay?
p. 164
The amount of time for which the CNW election is binding
What is for a minimum of 5 years?
The time when a taxpayer will submit a late CNW election
What is after the due date or the extension due date covering the period in which the CNW election is to take effect?
A good and reasonable cause for a CNW exclusion would include this
What is difficulty to obtain necessary financial information (subject to certain circumstances such as operationally remote)?
Slide 12
A taxpayer can compute its net worth on both a consolidated and non-consolidated basis and use the lesser amount as its net worth franchise tax base.
What is Nay?
p.164
When viewing accounts in TR3, auditors should be able to see this for the parent and members of a CNW group
What is a CNW Indicator?
Consolidated Net Worth-Parent
Consolidated Net Worth-Member
When filing a late CNW election, the taxpayer states that it was improperly advised by its CPA. Audit will determine this
What is not a good and reasonable cause for approval of the late election?
Slide 10
The taxpayer must do this on the first page of the return to indicate that the CNW election has been made
What is check the box (indicating the CNW election has been made)?
p. 164
Slide 5
The affiliated group members can have different tax year ends and still compute its net worth on a consolidated basis.
What is Nay?
p. 164
When must the affiliated group file the CNW Election Registration Application
What is on or before the due date or extension due date of the F&E return covering the period for which the CNW election is to take effect?
Slide 5
p. 164
The taxpayer must submit this when making any changes to the CNW election
What is the Consolidated Net Worth Election Registration Application?
The taxpayer reported consolidated net worth on Schedule F2 as $110,074,092. The TN total of real and tangible property reported on Schedule G is $36,084,835. The apportionment ratio reported on Schedule NC is 40.794%. What is the taxpayer's franchise tax liability?
What is $112,259?
Calculation:
ScheduleF2:$110,074,092*40.794%=$44,903,625
Schedule G: $36,084,835
Franchise tax is based on the greater of the two. Franchise tax: $44,903,625*.25/100=$112,259
p. 153
Taxpayers that file on a CNW basis will have two different schedules to compute their apportionment ratio.
What is Yay?
Taxpayers will file a Schedule N for excise tax purposes and a Schedule 170NC, 170SF, 174SC, or 174NC for franchise tax purposes.
p. 174
The amount reported as the consolidated net worth reported on Schedule F2 for Cummins Power Generation Inc. (0317984911-FAE) and Cummins Inc. (0317993250-FAE) for tax year ended 12/31/2020 is this
What is $4,381,931,159?
The auditor will prepare these to be submitted to the Commissioner's Office to determine approval or denial of the CNW early revocation, late election, or exclusion
What is a memo and letter with Audit's recommendation?
Slides 6, 8, 11
The five consolidated net worth apportionment schedules are
What are Schedules 170NC, 170SF, 170SC, 174SC, 174NC?
p. 178
The CNW affiliated group members must file a consolidated franchise and excise tax return.
What is Nay?
A CNW election is NOT an election to file a consolidated F&E tax return. Each member will file separate returns, but all will report consolidated net worth on F2.
p. 165