Tax Type
Corporation Income Tax
Description
Neighborhood Assistance Act Credit
Topic
Credits
Date Issued
06-24-1991
June 24, 1991
Re: Neighborhood Assistance Act Credit
Dear**************
You have requested a ruling concerning a transaction in which several corporations included in a consolidated Virginia corporation income tax return make investments qualifying for the tax credit under the Neighborhood Assistance Act. Specifically, you ask whether the limitation regarding the maximum amount of credit applies separately to each investing corporation or to the affiliated group as a whole.
The Neighborhood Assistance Act (NAA) authorizes the Department of Social Services (DSS) to grant a credit of Up to $175,000 to a "business firm." Va. Code §63.1-324 directs the Commissioner of DSS to certify the amount of the credit to the Department of Taxation or the State Corporation Commission for credit against the business firm's liability for individual or corporation income tax, bank franchise tax, premium tax, or public service corporation tax, whichever applies. Thus, the $175,000 limitation applies to DSS authority to grant a credit, not the business firm's ability to claim the credit on a tax return. See Public Document No. 90-89 (6/8/90).
Because the limitation applies separately to each business firm, participation in a consolidated return will not limit the number or amount of tax credits that an affiliated group may claim on its consolidated return. However, the credits are applied to the consolidated tax liability of the affiliated group, affecting the amount of any unused credits to be carried over and applied to the consolidated tax liability for the next five years.
If you have any additional questions, please do not hesitate to contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner