§ 58.1-442. Separate, combined or consolidated returns of affiliatedcorporations.
A. Corporations which are affiliated within the meaning of § 58.1-302 may,for any taxable year, file separate returns, file a combined return or file aconsolidated return of net income for the purpose of this chapter, and thetaxes thereunder shall be computed and determined upon the basis of the typeof return filed. Following an election to file on a separate, consolidated,or combined basis all returns thereafter filed shall be upon the same basisunless permission to change is granted by the Department.
B. For the purpose of subsection A:
1. A consolidated return shall mean a single return for a group ofcorporations affiliated within the meaning of § 58.1-302, prepared inaccordance with the principles of § 1502 of the Internal Revenue Code andregulations promulgated thereunder. Permission to file a consolidated returnshall not be denied to a group of affiliated corporations filing aconsolidated federal return solely because two or more members of suchaffiliated group would be required to use different apportionment factors ifseparate returns were filed. The Tax Commissioner shall promulgateregulations setting forth the manner in which such an affiliated group shallcompute its Virginia taxable income.
2. A combined return shall mean a single return for a group of corporationsaffiliated within the meaning of § 58.1-302, in which income or loss isseparately determined in accordance with subdivisions a through d below:
a. Virginia taxable income or loss is computed separately for eachcorporation;
b. Allocable income is allocated to the state of commercial domicileseparately for each corporation;
c. Apportionable income or loss is computed, utilizing separate apportionmentfactors for each corporation;
d. Income or loss computed in accordance with items a through c above iscombined and reported on a single return for the affiliated group.
C. Notwithstanding subsection A, a group of corporations may apply to the TaxCommissioner for permission to change the basis of the type of return filed(i) from consolidated to separate or (ii) from separate or combined toconsolidated, if such corporations are affiliated within the meaning of §58.1-302 and the affiliated group of which they are members, as it hasexisted from time to time, has filed on the same basis for at least thepreceding 20 years. Permission shall be granted if:
1. For the taxable year immediately preceding the taxable year for which thenew election would be applicable, there would have been no decrease in taxliability computed under the proposed election as compared to the affiliatedgroup's former filing method; and
2. The affiliated group agrees to file returns computing its Virginia incometax liability under both the new filing method and the former method and willpay the greater of the two amounts for the taxable year in which the newelection is effective and for the immediately succeeding taxable year.
(Code 1950, § 58-151.079; 1971, Ex. Sess., c. 171; 1981, c. 402; 1984, c.675; 1990, c. 619; 2003, c. 166.)
§ 58.1-442. Separate, combined or consolidated returns of affiliatedcorporations.
A. Corporations which are affiliated within the meaning of § 58.1-302 may,for any taxable year, file separate returns, file a combined return or file aconsolidated return of net income for the purpose of this chapter, and thetaxes thereunder shall be computed and determined upon the basis of the typeof return filed. Following an election to file on a separate, consolidated,or combined basis all returns thereafter filed shall be upon the same basisunless permission to change is granted by the Department.
B. For the purpose of subsection A:
1. A consolidated return shall mean a single return for a group ofcorporations affiliated within the meaning of § 58.1-302, prepared inaccordance with the principles of § 1502 of the Internal Revenue Code andregulations promulgated thereunder. Permission to file a consolidated returnshall not be denied to a group of affiliated corporations filing aconsolidated federal return solely because two or more members of suchaffiliated group would be required to use different apportionment factors ifseparate returns were filed. The Tax Commissioner shall promulgateregulations setting forth the manner in which such an affiliated group shallcompute its Virginia taxable income.
2. A combined return shall mean a single return for a group of corporationsaffiliated within the meaning of § 58.1-302, in which income or loss isseparately determined in accordance with subdivisions a through d below:
a. Virginia taxable income or loss is computed separately for eachcorporation;
b. Allocable income is allocated to the state of commercial domicileseparately for each corporation;
c. Apportionable income or loss is computed, utilizing separate apportionmentfactors for each corporation;
d. Income or loss computed in accordance with items a through c above iscombined and reported on a single return for the affiliated group.
C. Notwithstanding subsection A, a group of corporations may apply to the TaxCommissioner for permission to change the basis of the type of return filed(i) from consolidated to separate or (ii) from separate or combined toconsolidated, if such corporations are affiliated within the meaning of §58.1-302 and the affiliated group of which they are members, as it hasexisted from time to time, has filed on the same basis for at least thepreceding 20 years. Permission shall be granted if:
1. For the taxable year immediately preceding the taxable year for which thenew election would be applicable, there would have been no decrease in taxliability computed under the proposed election as compared to the affiliatedgroup's former filing method; and
2. The affiliated group agrees to file returns computing its Virginia incometax liability under both the new filing method and the former method and willpay the greater of the two amounts for the taxable year in which the newelection is effective and for the immediately succeeding taxable year.
(Code 1950, § 58-151.079; 1971, Ex. Sess., c. 171; 1981, c. 402; 1984, c.675; 1990, c. 619; 2003, c. 166.)
§ 58.1-442. Separate, combined or consolidated returns of affiliatedcorporations.
A. Corporations which are affiliated within the meaning of § 58.1-302 may,for any taxable year, file separate returns, file a combined return or file aconsolidated return of net income for the purpose of this chapter, and thetaxes thereunder shall be computed and determined upon the basis of the typeof return filed. Following an election to file on a separate, consolidated,or combined basis all returns thereafter filed shall be upon the same basisunless permission to change is granted by the Department.
B. For the purpose of subsection A:
1. A consolidated return shall mean a single return for a group ofcorporations affiliated within the meaning of § 58.1-302, prepared inaccordance with the principles of § 1502 of the Internal Revenue Code andregulations promulgated thereunder. Permission to file a consolidated returnshall not be denied to a group of affiliated corporations filing aconsolidated federal return solely because two or more members of suchaffiliated group would be required to use different apportionment factors ifseparate returns were filed. The Tax Commissioner shall promulgateregulations setting forth the manner in which such an affiliated group shallcompute its Virginia taxable income.
2. A combined return shall mean a single return for a group of corporationsaffiliated within the meaning of § 58.1-302, in which income or loss isseparately determined in accordance with subdivisions a through d below:
a. Virginia taxable income or loss is computed separately for eachcorporation;
b. Allocable income is allocated to the state of commercial domicileseparately for each corporation;
c. Apportionable income or loss is computed, utilizing separate apportionmentfactors for each corporation;
d. Income or loss computed in accordance with items a through c above iscombined and reported on a single return for the affiliated group.
C. Notwithstanding subsection A, a group of corporations may apply to the TaxCommissioner for permission to change the basis of the type of return filed(i) from consolidated to separate or (ii) from separate or combined toconsolidated, if such corporations are affiliated within the meaning of §58.1-302 and the affiliated group of which they are members, as it hasexisted from time to time, has filed on the same basis for at least thepreceding 20 years. Permission shall be granted if:
1. For the taxable year immediately preceding the taxable year for which thenew election would be applicable, there would have been no decrease in taxliability computed under the proposed election as compared to the affiliatedgroup's former filing method; and
2. The affiliated group agrees to file returns computing its Virginia incometax liability under both the new filing method and the former method and willpay the greater of the two amounts for the taxable year in which the newelection is effective and for the immediately succeeding taxable year.
(Code 1950, § 58-151.079; 1971, Ex. Sess., c. 171; 1981, c. 402; 1984, c.675; 1990, c. 619; 2003, c. 166.)
