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Which type of tax concept does NOT respect the separate ownership form and structure of related businesses?

a. Unitary taxation
b. Separate return
c. Combined reporting
d. Nexus

1 Answer

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Final answer:

Unitary taxation does not respect the separate ownership form and structure of related businesses.

Step-by-step explanation:

The type of tax concept that does not respect the separate ownership form and structure of related businesses is Unitary taxation. Unitary taxation is a method by which a state taxes an entire enterprise or group of affiliated businesses as a single entity, regardless of the separate ownership and structure of those businesses. This means that even if the businesses are separate legal entities, they are treated as a single unit for tax purposes.

On the other hand, Separate return is a tax concept that respects the separate ownership form and structure of related businesses. In this method, each business or subsidiary within a group files its own individual tax return.

Combined reporting, another tax concept, is a middle ground between unitary taxation and separate return. It requires related businesses to file a consolidated tax return that combines the incomes and deductions of the group of companies.

Nexus refers to the connection or presence of a business in a particular state, which determines whether the business has a sufficient connection to the state to be subjected to the state's tax laws and regulations.

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