Tax Type
Corporation Income Tax
Description
Apportionment factors
Topic
Allocation and Apportionment
Date Issued
03-31-1986
March 31, 1986
Re: Section 58.1-1821 Application: Corporation Income Tax
Dear *********************
This will reply to your letter of August 7, 1985 in which you protest the assessment of corporation income tax against ************* (the "Taxpayer") for the years ended ************* 1982, 1983, and 1984.
FACTS
Taxpayer apportioned all of its property and payroll to Virginia for its taxable years 1982, 1983, and 1984. For taxable year 1982 it apportioned all of its sales to Virginia as well. However, for taxable years 1983. and 1984, Taxpayer asserts that sales made to its subsidiary DISC, *********** should not be included in the numerator of the sales factor fraction because the ultimate destination of those sales is not a purchaser within Virginia.
DETERMINATION
From all of the-information presented, it appears that all of Taxpayer's payroll and property and its only office is located in Virginia, and that, therefore, Taxpayer would not be subject to taxation in any state other than Virginia Section 58-151.035 of the Code of Virginia (§58.1-406, effective January 1, 1985) provides that unless a corporation has income subject to taxation both within and without Virginia, it is not entitled to allocate and apportion its Virginia taxable income. I enclose a copy of a previous ruling, dated October 13, 1981, which applied this principle.
Accordingly, I find no basis to adjust the above-referenced assessment, and the outstanding balance remains due and payable.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner