Tax Type
Corporation Income Tax
Description
Request to File combined Corporate Tax Return
Topic
Computation of Tax
Returns/Payments/Records
Date Issued
12-10-2001
December 10, 2001
Re: Request for Ruling: Corporate Income Tax
Dear *****
This will respond to your letter in which you request permission for ***** (the "Group") to include ***** (the "Taxpayer"), in the Group's combined Virginia corporate income tax return, beginning with the taxable year ended December 31, 2000. I apologize for the delay in the department's response.
FACTS
The Group has previously filed combined returns in Virginia. You have represented that the Taxpayer is affiliated within the meaning of Code of Virginia § 58.1-302 and files using the same taxable year. As such, the Group requests permission to include the Taxpayer in its combined filing status prospectively 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. Title 23 VAC 10-120-324(B) provides that if a new corporation becomes a member of the affiliated group, the new corporation must follow the filing method previously elected by the group.
In the instant case, because the Group and the Taxpayer are affiliated and file federal returns on the same taxable year, the Taxpayer is required to be included in the combined Virginia corporation income tax return for the taxable year ended December 31, 2000. Any new affiliates that become subject to Virginia income tax in succeeding years must conform to elections made by the Group.
If you have any questions regarding this determination, you may contact ***** in the Office of Policy and Administration, Appeals and Rulings, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
AR/34187E
Rulings of the Tax Commissioner