Tax Type
Corporation Income Tax
Description
Returns of Affiliated Corporations
Topic
Returns and Payments
Date Issued
10-29-1998
October 29, 1998
Re: Request for Ruling: Corporation Income Tax
Dear *****
This will respond to your letter in which you request permission for ***** (the designated ``Lead' corporation of the affiliated group) to change from filing separate Virginia corporation income tax returns to a combined Virginia corporation income tax return effective for the taxable year ending June 30, 1998.
FACTS
The Lead corporation and an affiliated corporation have filed separate Virginia corporation income tax returns for a number of years. You represent that the group is affiliated within the meaning of Code of Virginia Sec. 58.1-302 and files using the same taxable year. You request that the Lead and an affiliate be allowed to change from the separate filing status to the combined filing status beginning with the taxable year ending June 30, 1998.
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 *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/16683P
Re: Request for Ruling: Corporation Income Tax
Dear *****
This will respond to your letter in which you request permission for ***** (the designated ``Lead' corporation of the affiliated group) to change from filing separate Virginia corporation income tax returns to a combined Virginia corporation income tax return effective for the taxable year ending June 30, 1998.
FACTS
The Lead corporation and an affiliated corporation have filed separate Virginia corporation income tax returns for a number of years. You represent that the group is affiliated within the meaning of Code of Virginia Sec. 58.1-302 and files using the same taxable year. You request that the Lead and an affiliate be allowed to change from the separate filing status to the combined filing status beginning with the taxable year ending June 30, 1998.
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 *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/16683P
Rulings of the Tax Commissioner