Tax Type
Corporation Income Tax
Description
Federal Environmental Tax
Topic
Computation of Income
Date Issued
08-30-1993
August 30, 1993
Re: §58.1-1821 Application; Corporate Income Taxes
Dear*************
This will reply to your letter dated May 17, 1993 in which you make application for correction of the assessment for additional corporate income tax to*********(the "Taxpayer") for fiscal year ended December 29, 1990.
FACTS
The Taxpayer's federal income tax return for the taxable year ended December 29, 1990 reflected a liability of*********for the federal environmental tax. Upon audit, an adjustment was made to increase the Taxpayer's Virginia taxable income by the amount of the environmental tax in accordance with Va. Code §58.1-402 B.4. The Taxpayer has appealed the assessment, and avers that the environmental tax was not deducted in arriving at federal taxable income.
DETERMINATION
Virginia taxable income is generally defined by Va. Code §58.1-402 as federal taxable income, modified by certain additions and subtractions. Additions to Virginia taxable income are required for certain net income taxes, which have been defined to include the federal environmental tax imposed by 59A of the Internal Revenue Code. However, this addition is only required to the extent such taxes have been deducted in arriving at federal taxable income.
The information provided by the Taxpayer indicates that he environmental tax was not deducted in arriving at federal taxable income on the 1990 federal income tax return. Accordingly, no adjustment is required to federal taxable income for Virginia purposes. The assessment of additional income tax for the 1990 taxable year with respect to this item will be abated.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/7033M
Rulings of the Tax Commissioner