Tax Type
Corporation Income Tax
Description
New affiliated group; Filing status
Topic
Returns/Payments/Records
Date Issued
05-28-1992
May 28, 1992
Re: Ruling Request: Corporation Income Taxes
Dear ****
This will reply to the letter dated August 8, 1991 from * * * in which * * * and affiliates (the "Taxpayer") seek permission to file a consolidated or combined Virginia income tax return.
FACTS
The taxpayer was acquired by an unrelated company on March 31, 1989 and pursuant to federal income tax rules, filed two federal and separate Virginia returns of less than 12 months for the 1989 taxable year. On January 1, 1990 an additional taxpayer affiliate began doing business in Virginia.
RULING
In the first year two or more members of an affiliated group are subject to Virginia taxes, the group elects to file either a separate, combined, or consolidated Virginia return. See Virginia Regulation (VR) 630-3-442. Once the election is made, it can be changed only with the department's approval.
The filing of the first return for a 12 month taxable year beginning on or after the date of the organization or acquisition of a new corporation which creates the affiliated group will be deemed the filing which elects a return filing status. See VR 630-3-442.
Since the first 12 month return for the newly created affiliated group would be for the 1990 taxable year, the taxpayer may elect whichever filing method it chooses. The election is made by merely filing the affiliated group returns using the desired method.
Elections as to filing method are deemed to be made by the affiliated group as a whole. Changes in the membership of an affiliated group do not affect the original election by the group, and new members must assume the filing status previously elected by the group.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner