Tax Type
Corporation Income Tax
Description
Combined filer; Requesting change to consolidated filer; Affiliated corporations
Topic
Returns/Payments/Records
Date Issued
10-06-2000
October 6, 2000
Re: Request for Ruling: Corporate Income Tax
Dear ****
This will respond to your letter in which you request that (the * * * "Taxpayer") be allowed to revoke its election to file a combined Virginia income tax return and change to filing on the consolidated basis, effective for the taxable year ended March 31, 1999. I apologize for the delay in responding.
FACTS
The Taxpayer and its affiliated corporations have filed their Virginia corporation income tax returns using the combined filing method for several years. As such, the group represented itself as being affiliated within the meaning of Code of Virginia § 58.1-302, and filed using the same taxable year end. The Taxpayer and its affiliated corporations now request permission to change from the combined method of filing to the consolidated method effective for the taxable year ended March 31, 1999.
RULING
Code of Virginia § 58.1-442 allows corporations to elect to file returns as separate, combined, or consolidated entities, regardless of how the corporations filed their federal income tax returns. Title 23 of the Virginia Administrative Code ("VAC") 10-120-320 (copy enclosed) provides that in the first year two or more members of an affiliated group of corporations are required to file Virginia returns, the group may elect to file separate returns, a combined return, or a consolidated return. All returns for subsequent years must be filed on the same basis unless permission to change is granted by the department. The department will generally not grant permission to change to a consolidated filing status absent extraordinary circumstances.
Based on the facts presented, no extraordinary circumstances exist to warrant granting permission to change to filing on a consolidated basis. Accordingly, permission to file a Virginia consolidated return cannot be granted.
If you have any questions regarding this ruling, please contact * * * of * * * the Office of Tax Policy at * * *
Danny M. Payne
Tax Commissioner
Re: Request for Ruling: Corporate Income Tax
Dear ****
This will respond to your letter in which you request that (the * * * "Taxpayer") be allowed to revoke its election to file a combined Virginia income tax return and change to filing on the consolidated basis, effective for the taxable year ended March 31, 1999. I apologize for the delay in responding.
FACTS
The Taxpayer and its affiliated corporations have filed their Virginia corporation income tax returns using the combined filing method for several years. As such, the group represented itself as being affiliated within the meaning of Code of Virginia § 58.1-302, and filed using the same taxable year end. The Taxpayer and its affiliated corporations now request permission to change from the combined method of filing to the consolidated method effective for the taxable year ended March 31, 1999.
RULING
Code of Virginia § 58.1-442 allows corporations to elect to file returns as separate, combined, or consolidated entities, regardless of how the corporations filed their federal income tax returns. Title 23 of the Virginia Administrative Code ("VAC") 10-120-320 (copy enclosed) provides that in the first year two or more members of an affiliated group of corporations are required to file Virginia returns, the group may elect to file separate returns, a combined return, or a consolidated return. All returns for subsequent years must be filed on the same basis unless permission to change is granted by the department. The department will generally not grant permission to change to a consolidated filing status absent extraordinary circumstances.
Based on the facts presented, no extraordinary circumstances exist to warrant granting permission to change to filing on a consolidated basis. Accordingly, permission to file a Virginia consolidated return cannot be granted.
If you have any questions regarding this ruling, please contact * * * of * * * the Office of Tax Policy at * * *
Danny M. Payne
Tax Commissioner
Rulings of the Tax Commissioner