Tax Type
Corporation Income Tax
Description
Change in subsidiary filing period
Topic
Returns/Payments/Records
Date Issued
11-07-1984
November 7, 1984
Dear*****
This will acknowledge receipt of your letter of October 31, 1984 in which you request, on the basis of the following facts, a ruling regarding the taxable period(s) for filing Virginia corporation income tax returns.
***** (Parent) and all of its affiliates subject to Virginia income tax (Affiliated Group) utilize a calendar year for federal and Virginia income tax purposes. Affiliated Group is included in a consolidated federal income tax return, but is required to file a combined Virginia income tax return for the year 1984 in accordance with its election in a prior year.
Effective January 31, 1984, Parent sold the stock of ***** (Subsidiary), a member of Affiliated Group, and is required under federal rules to include the taxable income of Subsidiary through the date of stock sale in its consolidated taxable income for the year 1984. Accordingly, Subsidiary is required to file an additional federal income tax return to include its taxable income from the date of stock sale to the close of its taxable year. The new owners of Subsidiary have changed its taxable year end to March 31.
Ruling
Paragraph (a) of the Virginia Code § 58-151.061 requires that a taxpayer's taxable year for Virginia income tax purposes be the same as its taxable year for federal income tax purposes and paragraph (b) provides that if its taxable year is changed for federal income tax purposes, it shall be similarly changed for Virginia income tax purposes.
For purposes of the Section, the Department has interpreted the term "taxable year" to mean any taxable period for which a federal income tax return is required to be filed and a Virginia return is required for each such taxable period.
I, therefore, rule that the taxable income of ***** for the period beginning January 1, 1984 and ending January 31, 1984 must be included in the 1984 combined Virginia return for Affiliated Group and that its taxable income for the period beginning February 1, 1984 and ending March 31, 1984 must be reported in a separate Virginia income tax return or included in a March 31, 1984 fiscal year consolidated or combined Virginia of its new owners, if appropriate.
The same principles are applicable to ***** the stock of which was sold effective May 31, 1984.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner