Tax Type
Corporation Income Tax
Description
Returns of affiliated corporations; Request to change filing status from separate to combined granted.
Topic
Returns and Payments
Date Issued
06-30-1998
June 30, 1998
Dear*************:
This will respond to your letter in which you request permission for ***** (the ``Taxpayer') and its affiliated corporations to change from filing separate Virginia corporation income tax returns to a combined return effective for the taxable year ending December 31, 1997.
FACTS
The Taxpayer and its affiliated corporations have filed separate returns in Virginia for a number of years. The group is affiliated within the meaning of Code of Virginia Sec. 58.1-302 and files using the same taxable year. The Taxpayer and its affiliates request permission to change to the combined filing status prospectively with the taxable year ending December 31, 1997.
RULING
Code of Virginia Sec. 58.1-442 allows corporations to elect to file returns as separate, combined, or consolidated entities regardless of how the corporations filed their federal income tax returns. Title 23 of the Virginia Administrative Code (VAC) 10-120-320, copy enclosed, provides that in the first year two or more members of an affiliated group of corporations are required to file Virginia returns, the group may elect to file separate returns, a combined return, or a consolidated return. All returns for subsequent years must be filed on the same basis unless permission to change is granted by the department.
Code of Virginia Sec. 58.1-442 permits affiliated corporations to file a combined return. Permission to change between separate and combined filing methods will generally be granted, because allocation and apportionment formulas are not affected by changes between these two statuses. See 23 VAC 10-120-324, copy enclosed. Because your request to change was filed prior to the due date or the extended due date of the separate returns, permission to change from separate to a combined filing is hereby granted.
If you have any questions regarding this ruling, please contact ***** of the Office of Tax Policy at *****.
Dear*************:
This will respond to your letter in which you request permission for ***** (the ``Taxpayer') and its affiliated corporations to change from filing separate Virginia corporation income tax returns to a combined return effective for the taxable year ending December 31, 1997.
FACTS
The Taxpayer and its affiliated corporations have filed separate returns in Virginia for a number of years. The group is affiliated within the meaning of Code of Virginia Sec. 58.1-302 and files using the same taxable year. The Taxpayer and its affiliates request permission to change to the combined filing status prospectively with the taxable year ending December 31, 1997.
RULING
Code of Virginia Sec. 58.1-442 allows corporations to elect to file returns as separate, combined, or consolidated entities regardless of how the corporations filed their federal income tax returns. Title 23 of the Virginia Administrative Code (VAC) 10-120-320, copy enclosed, provides that in the first year two or more members of an affiliated group of corporations are required to file Virginia returns, the group may elect to file separate returns, a combined return, or a consolidated return. All returns for subsequent years must be filed on the same basis unless permission to change is granted by the department.
Code of Virginia Sec. 58.1-442 permits affiliated corporations to file a combined return. Permission to change between separate and combined filing methods will generally be granted, because allocation and apportionment formulas are not affected by changes between these two statuses. See 23 VAC 10-120-324, copy enclosed. Because your request to change was filed prior to the due date or the extended due date of the separate returns, permission to change from separate to a combined filing is hereby granted.
If you have any questions regarding this ruling, please contact ***** of the Office of Tax Policy at *****.
Rulings of the Tax Commissioner