Tax Type
Corporation Income Tax
Description
Returns of Affiliated Corporations
Topic
Returns/Payments/Records
Date Issued
05-28-1992
May 28, 1992
Re: Ruling Request: Corporation Income Taxes
Dear ****
This will reply to your letter dated September 30, 1991 in which you request permission for * * * (the "Taxpayer) and subsidiaries to file consolidated returns in Virginia.
FACTS
The taxpayer and its subsidiaries file a single consolidated federal income tax return and have the same taxable year. The affiliated group has filed a Virginia consolidated return since its inception.
RULING
Under Va. Code § 58.1-442, once an affiliated group has made an election to file on a separate, consolidated or combined basis, the group may not change its filing status unless permission is granted by the Department of Taxation. An affiliated group is deemed to have elected its desired filing status by the methodology used in filing its first Virginia return(s) upon becoming taxable in Virginia.
Since special permission to file on a consolidated basis is not required when first electing filing status, and since the taxpayer filed a consolidated return as its first Virginia return, the taxpayer may continue filing on a consolidated basis.
However, since the taxpayer has elected to file on a consolidated basis, permission must be received from the Department to change from this basis, and any new affiliates beginning business in Virginia must file as members of the existing taxpayer's consolidated return.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner