Tax Type
General Provisions
Description
Coalfield Employment Enhancement Credit
Topic
Computation of Tax
Date Issued
06-11-2002
June 11, 2002
Re: Request for a Ruling: Coalfield Employment Enhancement Credit
Dear *****:
This will reply to your letter of March 21, 2002, in which you request a ruling on the application of the Coalfield Employment Enhancement Credit (the "Credit") and the employment factor to ***** when it changes its taxable year from a fiscal year to a calendar year.
FACTS
The Taxpayer changed its taxable year from a calendar year to a fiscal year, effective July 1, 1999. It requested a ruling on how to redeem the Credit and apply the employment factor when it made the taxable year change. The department issued Public Document ("P.D.") 00-5 (2/25/00), which described how to redeem the Credit when a taxpayer changed from a calendar year to a fiscal year. The Taxpayer intends to change its taxable year back to a calendar year and requests a ruling concerning the redemption of the credits based on this change.
RULING
In P.D. 00-5, the department provided schedules showing how and when a credit could be earned and claimed when the Taxpayer changed its taxable year. In accordance with those schedules, as corrected by P.D. 01-32 (3/21/01), the Taxpayer will report its coal sales on its returns as indicated in the schedule below.
Taxable Year Applicable Credit will be Redeemed
Employment Factor as shown
(Calendar Years)
1/1/96-12/31/96 1995/1996 50% in 1/1/99-6/30/99
50% in 1/1/05-12/31/05
1/1/97-12/31/97 1996/1997 50% in 7/1/99-6/30/00
50% in 1/1/06-12/31/06
1/1/98-12/31/98 1997/1998 75% in 1/1/01-12/31/01
25% in 1/1/07-12/31/07
1/1/99-6/30/99 1998/1999 75% in 1/1/02-12/31/02
25% in 1/1/08-12/31/08
7/1/99-6/30/00 1999/2000 75% in 1/1/02-12/31/02
25% in 1/1/08-12/31/08
7/1/00-6/30/01 2000/2001 100% in 1/1/03-12/31/03
7/1/01-12/31/01 2000/2001 100% in 1/1/04-12/31/04
1/1/02-12/31/02 2001/2002 100% in 1/1/05-12/31/05
The credit will be earned and redeemed in all years thereafter in accordance with Code of Virginia § 58.1-439.2. Virginia requires that Form 306 be filed with the corresponding Virginia corporate income tax returns. Form 306 is then resubmitted when the credit is actually claimed.
I hope that the foregoing answers your question. Copies of the statutes and public documents cited are available online in the Tax Policy Library section of the Department of Taxation's web site, located at www.tax.state.va.us. If you have any other questions, you may contact ***** in the Office of Policy and Administration, Appeals and Rulings, at *****.
Sincerely,
Kenneth W. Thorson
Tax Commissioner
AR/39746B
Rulings of the Tax Commissioner