Tax Type
Corporation Income Tax
Description
Returns of Affiliated Corporations
Topic
Returns and Payments
Date Issued
08-03-1999
August 3, 1999
Re: Request for Ruling: Corporate Income Tax
Dear ****
This will respond to your letter in which you request permission for ***** (the ``Taxpayer') to file a combined Virginia corporation income tax return with two of its newly created affiliated corporations.
FACTS
The Taxpayer has had operations in Virginia for a number of years and filed a corporate income tax return in Virginia on a separate basis. The Taxpayer ***** incorporated two new subsidiaries during the taxable year ending June 30, 1998 which purchased the assets of an unrelated corporation and became subject to Virginia tax. You have represented that the group is affiliated within the meaning Code of Virginia Sec. 58.1-302 and will file using the same taxable year. The Taxpayer requests ***** permission to file a combined return with its affiliated corporations for 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 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.
The Taxpayer and its subsidiaries became affiliated within the meaning of Code of Virginia Sec. 58.1-302 with respect to the taxable year ending June 30, 1998. Therefore, the election would be made when the group files its June 30, 1998 return. The group may elect to file separate returns, a combined return, or a consolidated return. Prior permission from the department is not required because the Taxpayer and affiliates would be in their initial election year.
If you have any questions regarding this ruling, please contact ***** of the Office of Tax Policy at ****
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/22318P
Re: Request for Ruling: Corporate Income Tax
Dear ****
This will respond to your letter in which you request permission for ***** (the ``Taxpayer') to file a combined Virginia corporation income tax return with two of its newly created affiliated corporations.
FACTS
The Taxpayer has had operations in Virginia for a number of years and filed a corporate income tax return in Virginia on a separate basis. The Taxpayer ***** incorporated two new subsidiaries during the taxable year ending June 30, 1998 which purchased the assets of an unrelated corporation and became subject to Virginia tax. You have represented that the group is affiliated within the meaning Code of Virginia Sec. 58.1-302 and will file using the same taxable year. The Taxpayer requests ***** permission to file a combined return with its affiliated corporations for 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 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.
The Taxpayer and its subsidiaries became affiliated within the meaning of Code of Virginia Sec. 58.1-302 with respect to the taxable year ending June 30, 1998. Therefore, the election would be made when the group files its June 30, 1998 return. The group may elect to file separate returns, a combined return, or a consolidated return. Prior permission from the department is not required because the Taxpayer and affiliates would be in their initial election year.
If you have any questions regarding this ruling, please contact ***** of the Office of Tax Policy at ****
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/22318P
Rulings of the Tax Commissioner