Tax Type
Corporation Income Tax
Description
Returns of Affiliated Corporations
Topic
Returns and Payments
Date Issued
04-07-1999
April 7, 1999
Re: Request for Ruling: Corporate Income Tax
Dear******************
This will respond to your letter in which request permission for ***** (the "Taxpayer') and its affiliated corporations to change from filing separate Virginia corporation income tax returns to a combined return effective for the taxable year ending December 31, 1998.
FACTS
The Taxpayer and its affiliated corporations have filed separate returns in Virginia for a number of years. You have represented that the group is affiliated within the meaning of Code of Virginia § 58.1-302 and files using the same taxable year. The Taxpayer and its affiliates request permission to change to the combined filing status prospectively with the taxable year ending December 31, 1998.
RULING
Code of Virginia § 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.
Title 23 VAC 10-120-324, copy enclosed, provides that changes between separate and combined filings will generally be allowed because allocation and apportionment among members of the affiliated group are unaffected by either filing method.
In the instant case, the department finds that the Taxpayer and its affiliates meet the requirements to file a combined return. Because the request to change was filed on a timely basis, permission is granted for the Taxpayer and affiliates to file a combined Virginia corporation income tax return for the taxable year ending December 31, 1998. Any new affiliates becoming subject to Virginia tax in 1998 and thereafter must conform to the combined filing status. The return should be filed using the name and identification number of the Taxpayer.
If you have any questions regarding this ruling, please contact ************ of the Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/21069P
Rulings of the Tax Commissioner