265(a)(2) when an affiliated
group member borrows funds and transfers them to another member, who then invests them in exempt obligations, However, the Tax Court addressed this issue in H Enterprises Int'l, Inc.
Hence, under the rules adopted by the General Assembly, if a passive investment company (or a holding company) has no dealings (or nexus) with the State of Maryland, the State may generally not tax that company, even if it derives part of its income from, for example, licensing its trademarks or other intangibles to affiliated
companies that are doing business within, and accordingly are properly taxable by, the State.
As a result, many of the firewalls overlap the restrictions of section 23B, which, as I noted, requires interaffiliate transactions to be at arm's length and on market terms but also prohibits a section 20 affiliate from representing that an affiliated
bank is responsible for its obligations and prohibits a bank from purchasing certain products from a section 20 affiliate.
Thirty-nine public and private agencies are presently affiliated
Mission societies sponsored by or affiliated
with a church or church denomination, more than half of whose activities are conducted in, or directed at persons in, foreign countries.
163(j)(6)(C) provides that members of an affiliated
group are treated as one taxpayer for purposes of these rules.
group of corporations that elects to file on a consolidated basis does so because of the tax benefits that are available.