Tax Type
Corporation Income Tax
Description
Consolidated returns; Affiliated corporations
Topic
Returns/Payments/Records
Date Issued
06-05-1992
June 5, 1992
Re: Ruling Request: Corporate Income Taxes
Dear ****
This will reply to your letter dated October 24, 1991 in which you request permission to file a Virginia consolidated return for * * * and subsidiaries (the "Taxpayer") for the 1990 taxable year.
FACTS
Previous Virginia income tax returns of the taxpayer were filed on a separate basis, because under prior law, affiliated companies required to use different apportionment factor methods were not allowed to file as a Virginia consolidated group. The taxpayer wishes to file as a consolidated group pursuant to newly enacted law.
RULING
Permission to change to or from the consolidated filing method is generally not granted by the department, because this change can affect the apportionment factors and possibly distort the reporting of the portion of business done in Virginia. See Virginia Regulation (VR) 630-3-442.
However, effective for taxable years beginning on and after January 1, 1991, affiliated corporations using different apportionment factors are permitted to file as a Virginia consolidated group. This assumes that all of the other requirements are met for consolidated group filing. Further, it is my understanding that this newly enacted law was intended to apply to affiliated groups previously denied the consolidated filing method because of differing apportionment factors.
Based on the above, I hereby grant permission for the taxpayer to file as a Virginia consolidated group for the 1990 taxable year and thereafter. Please see Public Document 91-244 (10/7/91) (copy attached) for guidance in computing the consolidated apportionment factor for affiliated groups which include mixed factor companies.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner