Tax Type
Corporation Income Tax
Description
Alternative method of allocation and apportionment denied
Topic
Allocation and Apportionment
Date Issued
06-24-1992
June 24, 1992
Re: §58.1-1821 Application; Corporation Income Tax
Dear***************
This will reply to your letter of May 12, 1992 in which you seek correction of a corporation income tax assessment for*******************(the "taxpayer").
FACTS
The taxpayer is a corporation with its commercial domicile in another state. On its 1990 Virginia corporation income tax return, the taxpayer claimed a subtraction for partnership and interest income, which was disallowed by the department's auditor. You protest this adjustment and request permission to use an alternative method of allocation and apportionment of income. You claim that Virginia's statutory method subjects this income to double taxation because all the partnership income was subjected to state income taxes where earned (states other than Virginia), and all the interest income was reported to the state of the taxpayer's commercial domicile.
DETERMINATION
The policies which apply to requests for an alternative method under Va. Code §58.1-421 are well established. See Virginia Regulation (VR) 630-3-421 and P.D. 86-184 (9/18/86) (copies enclosed). After considering the facts set forth, I find that you have not demonstrated by clear and cogent evidence that the statutory method is unconstitutional or inapplicable as applied in your situation.
Accordingly, permission to use an alternative method of allocation and apportionment is denied. The assessment is correct as made and is now due and payable. You will shortly receive an updated bill with interest accrued to date. The bill should be paid within 30 days to avoid the accrual of additional interest.
Sincerely,
W. H. Forst
Tax Commissioner
TPD/6159F
Rulings of the Tax Commissioner