Tax Type
Corporation Income Tax
Description
Permission to file a consolidated return
Topic
Returns/Payments/Records
Date Issued
03-19-1984
March 19, 1984
Re: Virginia Code § 58-151.079
Permission to File a Consolidated Return
Dear **************
This is in response to your letter of February 29, 1984 requesting permission for the above reference corporations to file a consolidated Virginia income tax return for the taxable year ending December 31, 1983 separate returns have been filed in prior years.
In a consolidated return inter-affiliate transactions are eliminated and the apportionment factors of multi-state corporations are combined As a result the income subject to Virginia income tax on a consolidated return may be significantly different from the total shown on separate returns, especially if any of the affiliates do business in more than one state. For this reason the Department of Taxation very rarely grants permission for corporations to change to or from consolidated returns.
§ 58-151.079 has been amended to permit affiliated corporations to file a combined return for taxable years beginning on or after January 1, 1981. A change from separate returns to combined return does not affect the computation or apportionment of income except that losses of one corporation may offset the income of an affiliated corporation.
Permission is hereby granted to file a combined return for the taxable year ending December 31, 1983 and thereafter for the affiliates subject to Virginia income tax 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 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 1.1501-79
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner