Tax Type
Corporation Income Tax
Description
Motor Carrier
Topic
Allocation and Apportionment
Date Issued
04-10-1989
April 10, 1989
Re: Request for Ruling; Corporation Income Tax
§58.1-421 Alternative Method of Allocation & Apportionment
Dear*****************
This is in response to the amended return filed on September 15, 1988, in which you requested an alternative method of allocation and apportionment.
Requested Method
The taxpayer is a motor carrier which appears to have a substantial warehouse and storage operation. Instead of apportioning all of its income (except dividends) by the statutory mileage factor in §58.1-417, the taxpayer proposes to apply the mileage factor to the income from its trucking operations and to apply the three factor (property, payroll and sales) formula to the income from the warehouse and storage operations.
Determination
The policies which apply to requests for an alternative method under §58.1-421 are well established. See Virginia Regulation VR 630-3-421 and the Ruling Letter dated September 18, 1986, P.D No. 86-184 (copies enclosed). After considering the facts set forth, you have not demonstrated by clear and cogent evidence that the statutory method is unconstitutional or inapplicable as applied to your situation. There is nothing to indicate that your situation is any different from other motor carriers whose terminals, warehouses and storage facilities are located outside Virginia. The application of the statutory apportionment formula to a similar motor carrier was upheld by the Virginia Supreme Court in Commonwealth v. McAdams, 227 Va. 548 (1984) (copy enclosed).
Accordingly, permission to use an alternative method of allocation and apportionment is denied.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner