Tax Type
Corporation Income Tax
Description
Permission to file a combined return
Topic
Returns/Payments/Records
Date Issued
08-19-1987
August 19, 1987
Re: Va. Code §58.1-442
Permission to File a Combined Return
Dear **************************
This will reply to your letter of June 1, 1987 requesting permission for the Parent to file a combined Virginia income tax return with the other Taxpayers for the year ended June 30, 1987.
Facts
You have indicated that the Parent has filed a single return in previous years and that the other Taxpayers have filed a consolidated return. You argue that the Taxpayers function as one economic unit and are in essence a single business entity, and that Virginia taxable income would be more clearly reflected by a combined return which combines the separate taxable income amount of the Parent with the consolidated taxable income amounts of the other Taxpayers.
DETERMINATION
Va. Code §58.1-442 B.2.a. (copy enclosed) provides that, for a combined return, Virginia taxable income or loss is computed separately for each corporation. The situation you propose would not satisfy this requirement because, in computing the taxable income amounts of the consolidated group, taxable income or loss is not computed separately for each corporation.
Moreover, once an election has been made to file consolidated returns, permission is generally not granted to change to separate or combined returns.
Accordingly, permission to change to filing a combined return as requested above is denied.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner