Question

Which of the following are factors used to determine when a business is unitary? (Check all that apply.)

Multiple select question.
- Functional integration
- Economies of scale result due to size
- All the separate businesses have nexus with the taxing state
- Centralization of management between companies

Answer 1

The factors used to determine when a business is unitary include functional integration, economies of scale, nexus with the taxing state, and centralization of management between companies.

Step-by-step explanation:

The factors used to determine when a business is unitary include:

• Functional integration: This refers to the extent to which the operations and activities of different parts of the business are interrelated and integrated.
• Economies of scale: These occur when the size of the business allows for cost advantages and efficiencies, such as bulk purchasing or centralized production.
• All the separate businesses have nexus with the taxing state: Nexus refers to the connection or presence of a business in a particular state, which may be determined by factors such as physical presence, sales, or employees.
• Centralization of management between companies: This refers to the extent to which the management and decision-making functions of the separate businesses are centralized or coordinated.