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 affiliates to change from filing separate Virginia corporation income tax returns to a combined return for the taxable year ending January 31, 1998.
FACTS
The Taxpayer was a member of a group of affiliated corporations that filed their Virginia corporation income tax returns on the separate basis for a number of years. This group of affiliated corporations were split off into two unrelated groups. The Taxpayer, the parent of one of the new affiliated groups, requests that it be allowed to change from the separate filing status to the combined filing status effective for the taxable year ending January 31, 1998, and subsequent years.
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 return. 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.
Permission to change between separate and the combined return 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 extended due date of the separate returns, permission to change from separate to a combined filing is 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 affiliates to change from filing separate Virginia corporation income tax returns to a combined return for the taxable year ending January 31, 1998.
FACTS
The Taxpayer was a member of a group of affiliated corporations that filed their Virginia corporation income tax returns on the separate basis for a number of years. This group of affiliated corporations were split off into two unrelated groups. The Taxpayer, the parent of one of the new affiliated groups, requests that it be allowed to change from the separate filing status to the combined filing status effective for the taxable year ending January 31, 1998, and subsequent years.
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 return. 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.
Permission to change between separate and the combined return 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 extended due date of the separate returns, permission to change from separate to a combined filing is granted.
If you have any questions regarding this ruling, please contact ***** of the Office of Tax Policy at *****.
Rulings of the Tax Commissioner