Document Number
24-128
Tax Type
Corporation Income Tax
Description
Allocation and Apportionment: Single Sales Factor - Election on Amended Return
Topic
Appeals
Date Issued
12-11-2024

December 11, 2024

Re: § 58.1-1824 Application: Corporate Income Tax    

Dear *****:

This will reply to your letter in which you seek a refund of corporate income tax paid by your client, ***** (the “Taxpayer”), for the taxable year ended December 31, 2015.

FACTS

The Taxpayer timely filed a 2015 amended corporate income tax return electing to apportion its income using the modified apportionment method available to manufacturing companies pursuant to Virginia Code § 58.1-422. Under audit, the Department denied the election because it was not made on the Taxpayer’s original return. The Taxpayer timely filed a protective claim for refund, asserting that it was permitted to make the election on the amended return.

DETERMINATION

Pursuant to the authority granted the Department under Virginia Code § 58.1-1824, a protective claim for refund can be held pending the outcome of another case before the courts or the claim may be decided based upon its merits pursuant to Virginia Code § 58.1-1821. 

In Commonwealth v. 1887 Holdings, 77 Va. App. 653 (2023), the Virginia Court of Appeals determined that otherwise eligible taxpayers could elect to use the manufacturer’s modified apportionment method on amended returns. In accordance with the court’s determination, therefore, the Taxpayer was eligible to elect the manufacturer’s method on its 2015 amended return. In addition, the Taxpayer has submitted data indicating it otherwise met the requirements to make the election in 2015 and that, if it had done so, it would have met the applicable employment and wage requirements in the succeeding three years. Accordingly, the Taxpayer’s refund claim is granted and a refund will be issued shortly.

The Code of Virginia sections cited are available online at law.lis.virginia.gov. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, at ***** or *****@tax.virginia.gov.

Sincerely,

 

Kristin L. Collins
Assistant Commissioner of Tax Policy
Commonwealth of Virginia

Rulings of the Tax Commissioner

Last Updated 01/15/2025 09:16