Tax Type
Corporation Income Tax
Description
Taxable income of each eligible member of an affiliated group
Topic
Basis of Tax
Corporate Distributions and Adjustments
Date Issued
12-20-1982
December 20, 1982
Re: § 58-151.079 - Permission to File a Combined Return
Dear *****************
The parent corporation has requested permission to file a combined return for calendar year 1981 including itself and its subsidiaries. The corporations have filed separate Virginia returns in the past.
You also request guidance for allocating a consolidated net operating loss for Virginia purposes. When a consolidated Federal return is filed and separate Virginia returns are filed (or a combined return, which is computed on a separate basis) the Federal taxable income of each corporation will be the starting point for each corporation's Virginia return. The Federal taxable income of each corporation should be computed as if the corporation had filed a separate Federal return.
Further details on the computation of Virginia taxable income must await our regulations on the corporation income tax. The regulations are currently being drafted.
Permission is hereby granted to file a combined return for taxable years beginning on or after January 1, 1981, which includes all affiliates doing business in Virginia upon the following conditions:
1. Schedules shall be filed with the combined return which contain all information which would be contained in a separate Virginia return for each and every eligible member of the affiliated group. See §§58-151.079 and 58-151.081.
2. In computing the Virginia Taxable Income of each eligible member of the affiliated group there shall be added to federal taxable income the amount of any net operating loss deduction or other deduction which has been recognized for Virginia income tax purposes and offset other income in a Virginia consolidated or combined return for other taxable years. See, for example, Federal Income Tax Regulation 1.1502-79.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner