Tax Type
Corporation Income Tax
Description
Change in ownership; Consolidated returns
Topic
Returns/Payments/Records
Date Issued
04-28-1993
April 28. 1993
Re: Ruling Request: Consolidated Return
Dear***********
This will reply to your letter dated March 12, 1993, in which you request permission for******** (the "Taxpayer") and its subsidiary to file a consolidated return in Virginia.
FACTS
The Taxpayer and its subsidiary were part of a consolidated group which filed a consolidated Virginia and federal return. The two corporations were sold on January 23, 1992 with the Taxpayer acquiring the subsidiary.
RULING
In the first year two or more affiliated corporations are subject to Virginia tax, the group may elect to file either separate, consolidated, or combined returns. Once an affiliated group has made an election, the group may not change its filing status unless permission is granted by the Department of Taxation.
Virginia Regulation ("V.R.") 630-3-442 provides that the election is made upon the filing of the first return for a 12 month taxable year beginning on or after the date of organization or acquisition of the corporation creating the affiliated group.
As a result of the change in ownership and the subsequent acquisition of the subsidiary, 1992 is the Taxpayer's initial election year because it is the first year two or more affiliates are subject to Virginia income tax.
Accordingly, the Taxpayer may elect consolidated filing status.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/6829L
Rulings of the Tax Commissioner