Tax Type
Corporation Income Tax
Description
Sales factor; Alternative method
Topic
Allocation and Apportionment
Date Issued
11-16-1992
November 16, 1992
Re: §58.1-1821 Application; Corporation Income Tax
Dear****************
This will reply to your letter of September 10, 1992 in which you seek correction of a corporation income tax assessment for***************(the "Taxpayer").
FACTS
The Taxpayer was audited and an adjustment was made to the sales factor, resulting in the assessment of additional tax. The auditor included the gross proceeds, rather than the net gain, from the sale of Virginia property in the numerator of the sales factor. You request permission to use an alternative method of allocation and apportionment, allocating 100% of the gain from the sale of the property to Virginia and excluding interest income from income subject to apportionment.
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
OTP/6438P
Rulings of the Tax Commissioner