The following words and terms when used in this part shall have the following meanings:

1. (1)

   1. (A) “Group” means two (2) or more corporations which are owned or controlled, either directly or indirectly, by the same interests.

   2. (B)

      1. (i) Corporations which are eligible for inclusion in a consolidated group for the purposes of filing a consolidated return under the Internal Revenue Code are members of a group.
      2. (ii) However, corporations which are not eligible for inclusion in a federal consolidated return are still part of a group for the purposes of this part if there is common ownership, management, or control of the corporations or other factors which demonstrate that one (1) corporation has sufficient influence over the affairs of another to cause the corporations to enter into business transactions with each other;
2. (2) “Intangible income” means income generated by an intragroup intangible licensing transaction;

3. (3)

   1. (A) “Intragroup intangible licensing transaction” means a license of intangible property rights between two (2) or more members of a group, if one (1) of the parties to the transaction is a passive intangible holding company.
   2. (B) Intragroup intangible licensing transactions shall include licensing of trademarks, trade names, patents, copyrights, and any other transaction authorizing the use of intangible property in this state;
4. (4) “Licensee” means the group member which recognizes an expense for the use of the passive intangible holding company’s intangible property;
5. (5) “Measuring activity” means such action on the part of the licensee which, pursuant to the terms of a licensing agreement, serves as the basis for determining the extent of the licensee’s liability for payment of intangible income; and

6. (6)

   1. (A) “Passive intangible holding company” means a corporation which derives some or all of its income from the management and licensing of intangible assets.
   2. (B) As used in this part, the terms “passive intangible holding company” and “licensor” shall be recognized as meaning the same corporation.