Tax Type
Corporation Income Tax
Description
Returns of Affiliated Corporations
Topic
Returns and Payments
Date Issued
07-23-1999
July 23, 1999
Re: Request for Ruling: Corporate Income Tax
Dear***
This will respond to your letter in which you request permission for ***** (the ``Taxpayer') and its affiliated corporation to continue filing their Virginia corporation income tax return on a combined basis.
FACTS
The Taxpayer previously received permission to file a combined Virginia corporation income tax return. On July 1, 1998, the Taxpayer and its affiliate were purchased along with their parent corporation by an unrelated corporation. Neither the current or former parent have nexus in Virginia and therefore do not participate in the combined filing. The Taxpayer requests that it be allowed to continue to file using the combined filing method.
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. All returns for subsequent years must be filed on the same basis unless permission to change is granted by the department. The Taxpayer has previously received permission to file a combined return and is required to continue to do so unless the department grants permission to change.
In the instant case, the results of the change in ownership do not change the Virginia affiliated group. Thus, the Taxpayer and its affiliate have not been involved in a transaction that would necessitate a request to change or elect a new filing status. Consequently, the Taxpayer and its affiliated corporation is required to continue to file using the combined filing status.
If you have any questions regarding this ruling, please contact ***** of the Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/21865P
Re: Request for Ruling: Corporate Income Tax
Dear***
This will respond to your letter in which you request permission for ***** (the ``Taxpayer') and its affiliated corporation to continue filing their Virginia corporation income tax return on a combined basis.
FACTS
The Taxpayer previously received permission to file a combined Virginia corporation income tax return. On July 1, 1998, the Taxpayer and its affiliate were purchased along with their parent corporation by an unrelated corporation. Neither the current or former parent have nexus in Virginia and therefore do not participate in the combined filing. The Taxpayer requests that it be allowed to continue to file using the combined filing method.
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. All returns for subsequent years must be filed on the same basis unless permission to change is granted by the department. The Taxpayer has previously received permission to file a combined return and is required to continue to do so unless the department grants permission to change.
In the instant case, the results of the change in ownership do not change the Virginia affiliated group. Thus, the Taxpayer and its affiliate have not been involved in a transaction that would necessitate a request to change or elect a new filing status. Consequently, the Taxpayer and its affiliated corporation is required to continue to file using the combined filing status.
If you have any questions regarding this ruling, please contact ***** of the Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/21865P
Rulings of the Tax Commissioner