Tax Type
Corporation Income Tax
Description
Amended return to change prior filing method
Topic
Returns and Payments
Date Issued
08-30-1990
August 30, 1990
Re: Request for Ruling - Amended Corporation Income Tax Returns
Dear ***********
This is in response to your letter of May 31, 1989 in which you requested a ruling regarding amended corporation income tax returns. I apologize for the delay in responding.
Facts
Two affiliated corporations timely filed their August 31, 1987 fiscal year Virginia corporation income tax returns on a separate basis. One company had filed in Virginia for an indefinite period (over five years). The other's first Virginia return was for the August 31, 1987 fiscal year. The question is can the corporations amend their August 31, 1987 fiscal year returns, preparing them on the consolidated or combined basis?
Ruling
The provisions for changing return filing status are found in Va. Code §58.1-442. This section mandates that following an election to file on a separate, consolidated or combined basis, all returns thereafter must be filed on the same basis, unless permission to change is granted by the Department of Taxation. The language "all returns thereafter" includes amended returns. Therefore, the two corporations may file amended returns, but an amended return with a change in filing status may not be filed unless permission to change is granted by the Department of Taxation.
It should be noted that permission to change to or from filing consolidated returns will generally not be granted. Such changes affect the allocation and apportionment factors and distort the business done in Virginia and income arising from activity in Virginia. VR §630-3-442(E)(1). Your letter contains no indication that any extraordinary circumstances exist which would justify allowing a change to consolidated filing.
Accordingly, amended corporation income tax returns for the fiscal year ended August 31, 1987 may not be filed on a consolidated basis.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner