Tax Type
Corporation Income Tax
Description
Consolidated return; Affiliated corporations
Topic
Returns/Payments/Records
Date Issued
06-05-1992
June 5, 1992
Re: Corporation Income Tax: Ruling Request
Dear ****
This will reply to your letter dated November 27, 1991 in which you request permission for * * * and subsidiaries (the "Taxpayer") to file a consolidated Virginia income tax return for the year ended September 29, 1991.
FACTS
The taxpayer has filed on a separate and consolidated return basis for Virginia and federal purposes, respectively. One of the taxpayer's subsidiaries which does business in Virginia apportions income to Virginia using a one factor method. The taxpayer and all of its other subsidiaries doing business in Virginia apportion income using the three factor method under Va. Code § 58.1-408. The taxpayer joins in the filing of a federal consolidated return, and is an affiliated group, as defined in Va. Code § 58.1-302.
RULING
Effective for taxable years beginning on and after January 1, 1990, Chapter 619 of the 190 Acts of Assembly (HB 159) allows affiliated corporations utilizing different apportionment factors to be included in a Virginia consolidated return.
The taxpayer has been filing on a separate basis and cannot file a consolidated return for the group unless permission is granted. Although permission to change to or from consolidated filing is rarely granted, it is my understanding that HB 159 was intended to apply to affiliated group previously denied a Virginia consolidated filing status solely due to mixed apportionment factors between members.
Because of this legislative intent, and the fact that the taxpayer has promptly requested permission to file a consolidated return for the first taxable year eligible for such filing, permission is granted to file a consolidated return for the taxable year ending 9/28/91 and thereafter.
This follows the policy promulgated in Public Document 91-244 (10/7/91) (copy enclosed). Until such time as final regulations are issued, the attachment to PD 91-244 entitled "Mixed apportionment factors" should be utilized in computing the consolidated apportionment factor for the taxpayer.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner