Tax Type
Corporation Income Tax
Description
Request for permission to file combined return
Topic
Computation of Tax
Returns and Payments
Date Issued
12-04-2001
December 4, 2001
Re: Request for Ruling: Corporate Income Tax
Dear *****
This will respond to your letter in which you request permission for ***** (the "Taxpayer") and an affiliated corporation (the "Affiliate") to change from filing separate Virginia corporation income tax returns to a combined return effective for the taxable year ended December 31, 2000.
FACTS
The Taxpayer and the Affiliate have filed separate returns in Virginia for a number of years. You have represented that the Taxpayer and the Affiliate are affiliated within the meaning of Code of Virginia § 58.1-302 and use the same taxable year for income tax filing purposes. The Taxpayer and its affiliate request permission to change to the combined filing status beginning with the taxable year ended December 31, 2000.
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.
Title 23 VAC 10-120-324, copy enclosed, provides that changes between separate and combined filings will generally be allowed because allocation and apportionment among members of the affiliated group are unaffected by either filing method.
In the instant case, the department finds that the Taxpayer and its affiliate meet the requirements to file a combined return. The Taxpayer and the Affiliate have properly executed extensions on file with the department and made the request to change prior to the filing deadline for their 2000 corporate income tax returns. Because the request to change was filed on a timely basis, permission is granted for the Taxpayer and the Affiliate to file a combined Virginia corporation income tax return for the taxable year ended December 31, 2000.
Any other affiliated corporations that become subject to Virginia tax in subsequent years must conform to the combined filing status unless permission is granted by the Tax Commissioner to change to another filing status. The return should be filed using the name and identification number of the Taxpayer.
If you have any questions regarding this ruling, you may contact ***** of the Office of Policy and Administration, Appeals and Rulings, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
AR/36992P
Rulings of the Tax Commissioner