Tax Type
Corporation Income Tax
Description
NOLD
Topic
Basis of Tax
Subtractions and Exclusions
Date Issued
12-23-1994
December 23, 1994
Re: §58.1-1821 Application: Corporation Income Tax
Dear****************
This will reply to your letter of August 5, 1994, in which you seek correction of an assessment for additional corporate income tax to ***********(the "Taxpayer").
FACTS
The Taxpayer filed its 1993 Virginia corporation income tax return reflecting a federal net operating loss carryover which reduced federal taxable income to zero. Part of the net operating loss deduction was disallowed because the losses were not used in proper sequence on the Taxpayers' schedule. You protest this adjustment, and believe that federal law regarding net operating losses should take precedent over the form in which the losses have been presented on the return.
DETERMINATION
Virginia has no separate provision for a net operating loss deduction (NOLD). Therefore, an NOLD is allowable for Virginia purposes only to the extent that the NOLD is allowable as a deduction in computing federal taxable income.
Although the schedule reflecting the application of the net operating losses on the 1993 Virginia return is incorrect, the proper use of the NOLD's is easily ascertainable. You have supplied schedules showing the proper application of the losses for federal tax purposes, therefore we will allow the losses in a like manner in computing Virginia taxable income.
Based upon the above circumstances, the 1993 return is accepted as filed. The assessment for 1993 will be abated in full. If you have any questions about this ruling, please do not hesitate to contact**********************.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/8399P
Rulings of the Tax Commissioner