Tax Type
Corporation Income Tax
Description
DISC adjustment
Topic
Subtractions and Exclusions
Date Issued
10-03-1986
October 3, 1986
Re: §58.1-1821 Application: Corporation Income Tax
§58.1-446 DISC adjustment
Dear ********************
This is in response to your letter of June 6, 1985, protesting assessments of additional tax for taxable years 1981 and 1982. Most of the assessments are attributable to consolidation of the taxpayer's Domestic International Sales Company (DISC) under Virginia Code §58.1-446.
The issue of such DISC adjustments is currently before the Virginia Supreme Court in General Electric Co. v. Commonwealth of Virginia. The taxpayer has requested that this assessment be held in abeyance pending the outcome of this case. However, an assessment cannot be allowed to remain outstanding indefinitely.
After the assessment has been paid in full, you may file a protective claim for refund and request that it be held without action pending a final decision in General Electric.
After reviewing the audit report, it appears that the denominator of the sales factor should include the entire gross proceeds on the sale of assets. Attached to this letter is a revised computation of the sales factor and the assessment. You will shortly receive a revised bill reflecting the revised amount with accrued interest. Upon payment of the assessment, you may file a protective claim for refund pending the final decision in General Electric.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner