Tax Type
Corporation Income Tax
Description
Request change to consolidated return
Topic
Returns/Payments/Records
Date Issued
01-06-1993
January 6, 1993
Re: Ruling Request: Corporate Income Tax
Dear ****
This will reply to your letter dated March 25, 1992, in which you requested permission for ***** (the "Taxpayer") and ten (10) subsidiaries doing business in Virginia to file a consolidated Virginia income tax return for the year ended December 31, 1991,
FACTS
The Taxpayer has filed on a separate and consolidated return basis for Virginia and federal purposes, respectively. Based on the 1990 Virginia Corporation Income Tax Return, it appears the Taxpayer apportions income using the three factor method under Virginia Code § 58.1-408. At least one of its subsidiaries uses a one factor method. The Taxpayer and its subsidiaries constitute an affiliated group as defined by Virginia Code §58.1-302.
RULING
Effective for taxable years beginning on and after January 1, 1990, Chapter 619 of the 1990 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, HB 159 was intended to apply to affiliated groups previously denied Virginia consolidated filing status solely due to mixed apportionment factors between members.
Because of this legislative intent, and the facts and circumstances of this case, the Taxpayer is granted permission to file a consolidated return for the taxable year ending December 31, 1991 and thereafter.
Pursuant to Public Document 91-244 (10/7/91) (copy enclosed), until such time as final regulations are issued, the attachment to PD-244 entitled "Mixed Apportionment Factors" should be utilized in computing the consolidated apportionment factor for the taxpayer.
Sincerely,
W. H. Forst
Tax Commissioner
Enclosure (1)
OTP/6073L
Rulings of the Tax Commissioner