Tax Type
Corporation Income Tax
Description
Consolidated return; Affiliated corporations
Topic
Returns/Payments/Records
Date Issued
03-17-1993
March 17, 1993
Re: Ruling Request: Consolidated Return
Dear**********
This will reply to your letter dated September 3, 1992, sent on behalf of an anonymous taxpayer, asking whether the taxpayer and its subsidiaries may file a consolidated return in Virginia.
FACTS
Company A acquired companies B, C, C(a), and D in a reverse acquisition on December 30, 1990. Prior to the acquisition, Companies C and C(a) filed consolidated returns. Companies B and D filed separate returns. Company A filed a separate short-year return for a period beginning and ending December 31, 1990.
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.
Although Company A filed a return for the taxable year ending December 31, 1990, that return was for a one day period rather than a 12 month taxable year. As such, the taxpayer's initial election occurs in 1991, the first year two or more affiliates are subject to Virginia income tax.
Accordingly, the taxpayer can elect consolidated filing status.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/6439L
Rulings of the Tax Commissioner