23 VAC Title 23 Agency 10 — Virginia Tax Regulations

23VAC10-120-324

Consolidated and combined returns; permission to change

# A.

To or from consolidated.

# 1.

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 the income arising from activity in Virginia.

# 2.

If granted, permission to change will generally be effective only for returns filed on and after the date the request for permission to change was filed.

# 3.

Permission to file a consolidated return will generally be granted if timely requested by a group including corporations that would be required to use different apportionment factors. A request is timely filed if it is filed on or before the due date for the first Virginia return for an affiliate which was owned by the same interests on January 1, 1990, and which would be required to use an apportionment factor that is not the same as that required to be used by all other affiliates of the group in previous Virginia returns, whether or not any affiliate is subject to tax in another state.

# B.

To or from combined.

# 1.

Separate and combined returns do not affect the allocation and apportionment formulas for each corporation and permission to change from separate to combined returns or from combined to separate returns will generally be granted.

# 2.

If granted, permission to change will generally be effective only for returns filed on and after the date the request for permission to change was filed.

# C.

Election. Elections as to filing method are deemed to be made by the affiliated group as a whole. Changes in the membership of an affiliated group do not affect the original election by the affiliated group. If a new corporation becomes a member of the affiliated group, the new corporation must follow the filing method previously elected by the group.

# D.

Short year return. The filing of a separate short year federal and Virginia return upon organization or acquisition of a new corporation will not be deemed an election of separate return status. The filing of the first return for a 12-month taxable year beginning on or after the date of organization or acquisition of a new corporation which creates the affiliated group will be deemed the filing which elects a return filing status.

Last amended: Historical Notes Derived from VR630-3-442 § 5, eff. January 1, 1985; amended, eff. March 10, 1993.

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