Tax Type
Corporation Income Tax
Description
Short-year return of affiliated corporation
Topic
Returns/Payments/Records
Date Issued
10-22-1991
October 22, 1991
Re: Ruling Request: Corporation Income Tax
Dear***************
This is in reply to your letter dated April 9, 1991 requesting guidance related to short period Virginia corporate income tax returns for********** (the "Taxpayer") for the short years of January 1, 1991 to February 25, 1991 and February 26, 1991 to December 31, 1991.
FACTS
The taxpayer and its parent company file a federal consolidated return and on a separate basis in Virginia. On February 25, 1991 the parent company sold 50% of its stock in the taxpayer to an unrelated party. The taxpayer will be included in the federal consolidated return of the parent for the short period of January 1, 1991 to February 25, 1991. The parent will then file a separate federal income tax return on behalf of the taxpayer for the short period February 26, 1991 to December 31, 1991.
DETERMINATION
Virginia Regulation (VR) §630-3-440 requires that a corporation use the same taxable year for Virginia tax purposes as for federal income tax purposes.
Income tax returns are due on or before the fifteenth day of the fourth month following the close of the taxable year (VR §630-3-441(B)), and may be extended subject to the provisions under Va. Code §58.1-453. Each of the two federal returns requires a Virginia return under VR §630-3-440.
Specifically, the return due dates are as follow. The short year return for FYE 2/25/91 would be normally due on June 15, 1991. However, Va. Code §58.1-453 grants an extension to 30 days after the federal due date, as extended, or six months, whichever is later. Because U.S. Treasury Regulation §1.1502-76 permits the taxpayer to defer reporting its income until the federal consolidated return is due, the Virginia return for FYE 2/25/91 will be extended until 30 days after the due date of the consolidated federal return, as it may be extended. Interest on any tax liability will accrue from the 6/15/91 due date.
The separate Virginia income tax return for FYE 12/31/91 will be due April 15, 1992, and may be extended under Va. Code §58.1-453.
VR §630-3-500 states that every corporation expecting its tax liability for the taxable year to exceed $1,000 must pay estimated tax payments. For short taxable years less than four months there are no estimated payments due. The full amount of tax is paid with the filing of the return (VR §630-3-501(C)). For the taxable year ending December 31, 1991 return, estimated payments are due on the usual due dates as under VR §630-3-501.
Sincerely,
W. H. Forst
Tax Commissioner
TPD/5108G
Rulings of the Tax Commissioner