Tax Type
Corporation Income Tax
Description
Request to file on combined basis; Affiliated corporations
Topic
Returns/Payments/Records
Date Issued
03-18-1993
March 18, 1993
Re: Ruling Request Corporation Income Taxes
Dear***************
This will reply to your letter dated September 26, 1991 in which you request permission for ************* (the "Taxpayer") and affiliate to file on a combined basis.
FACTS
The Taxpayer began filing on the combined basis for the taxable year ended December 31, 1989, without receiving prior permission from the Department Each member of the affiliated group apportions and allocates 100% of its income to Virginia. The group affiliated within the meaning of Va. Code §58.1-302.
RULING
Virginia Code §58.1-442 authorizes affiliated corporations to file separate, combined, or consolidated income tax returns. Once a return filing status is elected, all returns thereafter must be filed on the same basis unless permission to change is granted by the Department of Taxation.
A change from the separate to combined filing status does not affect the allocation and apportionment formulas for affiliated corporations. Accordingly, we will treat the filing of the return first filed using the combined status as a request for permission.
I would like to point out that this request is not for "retroactive permission" in the strictest sense, because the taxpayer requested permission concurrent with filing the 1989 return. Therefore, we have treated this as a request for a prospective filing status change.
Permission is granted for the affiliated corporations to file a combined return for the 1989 taxable year and for taxable years thereafter if the combined return includes all affiliated corporations subject to Virginia income tax and if they use the same taxable year.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/5663G
Rulings of the Tax Commissioner