Tax Type
Corporation Income Tax
Description
Alternative method of allocation and apportionment
Topic
Allocation and Apportionment
Date Issued
03-29-1989
March 29, 1989
Re: Corporation Income Tax; FEIN:
§ 58.1-421 Alternative Method of Allocation & Apportionment
Dear *********
This is in response to your two letters of December 5, 1988, in which you applied for permission to use an alternative method of allocation and apportionment.
You have attached amended returns to your requests for 1986 and 1987 using a proposed method based primarily upon a separate accounting for the Virginia operations. Although the corporation as a whole is profitable, your accounting records show that the Virginia operations incurred a loss.
The policies which apply to requests for an alternative method under § 58.1-421 are well established. See Virginia Regulation VR 630-3-421 and the Ruling Letter dated September 18, 1986, P.D No. 86-184 (copies enclosed). After considering the facts set forth, you have not demonstrated by clear and cogent evidence that the statutory method is unconstitutional or inapplicable as applied to your situation. Accordingly, permission to use an alternative method of allocation and apportionment is denied.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner