Tax Type
Corporation Income Tax
Description
Returns of affiliated corporations; Request to change filing status from separate to combined.
Topic
Returns and Payments
Date Issued
03-17-1998
March 17, 1998
Dear********
This will respond to your letter in which you request permission for ***** (the "Taxpayer') and ***** ("S') to change from filing separate Virginia corporation income tax returns to a combined return.
FACTS
The Taxpayer and S have filed separate returns in Virginia for a number of years. The Taxpayer requests to change its filing status from separate to the combined filing status beginning with the taxable year ending December 31, 1997.
RULING
Code of Virginia Sec. 58.1-442 allows corporations to elect to file their returns as separate, combined, or consolidated entities regardless of how the corporations filed their federal income tax return. Title 23 VAC 10-120-320 of the Virginia Administrative Code (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 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 of the return, 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 ***** ("S') to change from filing separate Virginia corporation income tax returns to a combined return.
FACTS
The Taxpayer and S have filed separate returns in Virginia for a number of years. The Taxpayer requests to change its filing status from separate to the combined filing status beginning with the taxable year ending December 31, 1997.
RULING
Code of Virginia Sec. 58.1-442 allows corporations to elect to file their returns as separate, combined, or consolidated entities regardless of how the corporations filed their federal income tax return. Title 23 VAC 10-120-320 of the Virginia Administrative Code (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 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 of the return, 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