Tax Type
Corporation Income Tax
Description
Payroll factor adjustment; Returns of Affiliated Corporations
Topic
Returns/Payments/Records
Date Issued
10-15-1991
October 15, 1991
Re: §58.1-1821 Application
Dear*****************
This will reply to your letter of May 31, 1990, in which you seek correction of corporation income tax assessments for*************(the "Taxpayer").
FACTS
The taxpayer was included in a consolidated federal return and filed a separate Virginia return for the years under review. The taxpayer was audited and adjustments were made to the numerator and denominator of the payroll factor. While you agree with the adjustment to the denominator, you contend that the adjustment to numerator of the payroll factor was not properly computed.
DETERMINATION
The numerator of the payroll factor consists of total compensation paid or accrued within Virginia during the tax period. The total wages reported to Virginia for unemployment compensation purposes (form VEC-20) are presumed to be compensation paid in Virginia.
According to the audit report, the VEC-20's for 1987 were not available at the time of the audit. The auditor was required to compute Virginia compensation based on the limited information available. You have submitted a Virginia payroll figure which, you claim, is based on the 1987 VEC-20's. However, no documentation or copies of the VEC-20's have been provided.
The department cannot accept your unsubstantiated Virginia payroll figure as a basis for revising the audit report. However, the department will allow you to submit the VEC-20'S for 1987 to substantiate your figure. If the information is furnished, then the department will review the payroll factor and adjust it accordingly.
Should you choose to submit the required information, please send them to the department's Technical Services Section, P.O. Box 6-L, Richmond, Virginia 23282 within 30 days.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner