Tax Type
Corporation Income Tax
Description
Statutory method
Topic
Allocation and Apportionment
Date Issued
11-14-1990
November 14, 1990
Re: Request for Ruling: Corporation Income Tax
Dear ****
This will reply to your letter of October 9, 1990, in which you request a ruling allowing the use of an alternative method of apportionment for ***** (the "Taxpayer").
The taxpayer was required to use an alternative method of apportionment, a two factor formula, by the state of Maryland when it was determined that the salaries paid by the taxpayer were not for the production of income. The taxpayer requests permission to use a similar formula for Virginia income tax purposes in order to prevent double taxation of a portion of the income of the taxpayer.
The policies which apply to requests for an alternative method under Va. Code §58.1-421 are well established. See Virginia Regulation (VR) 630-3-421, P.D. 86-184 (9/18/86), and P.D. 85-146 (7/2/85) (copies enclosed). After considering the facts set forth, I conclude that 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 apportionment is denied.
Sincerely,
W. H. Forst
Tax Commissioner
Re: Request for Ruling: Corporation Income Tax
Dear ****
This will reply to your letter of October 9, 1990, in which you request a ruling allowing the use of an alternative method of apportionment for ***** (the "Taxpayer").
FACTS
The taxpayer was required to use an alternative method of apportionment, a two factor formula, by the state of Maryland when it was determined that the salaries paid by the taxpayer were not for the production of income. The taxpayer requests permission to use a similar formula for Virginia income tax purposes in order to prevent double taxation of a portion of the income of the taxpayer.
RULING
The policies which apply to requests for an alternative method under Va. Code §58.1-421 are well established. See Virginia Regulation (VR) 630-3-421, P.D. 86-184 (9/18/86), and P.D. 85-146 (7/2/85) (copies enclosed). After considering the facts set forth, I conclude that 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 apportionment is denied.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner