Income/Franchise:
Virginia: Sample Combined Filing Information Report Posted in Advance of July 1 Due Date

Notice, Vir. Dept. of Tax. (4/27/21). Pursuant to new state law requiring some corporations that are members of a “unitary business” to file an informational report with the Virginia Department of Taxation (Department) by July 1 containing the unitary group’s combined net income and tax [see H.B. 1800 (2021), and State Tax Matters, Issue 2021-15 and State Tax Matters, Issue 2021-14, for more details on this new law], the Department has posted a sample of the report along with instructions and continues to explain that the “one-time report” will allow it to “put together a report detailing the revenue impacts of combined corporate income tax reporting” in Virginia. The Department clarifies that there is no tax due with this report; however, if impacted businesses do not file the report, or make a material misstatement or omission on it, they may be subject to a $10,000 penalty.

According to the Department, impacted businesses will be able to file their informational report using its “Web Upload application” beginning May 1. The report “will need to include information about the unitary group’s income, apportionment computation, tax credits, and tax liability calculation,” and “the designated member will need to provide this information as if filing a unitary combined report under both the Joyce and Finnigan methods, as well as the same tax information as it is under the current filing requirements for all the members of the group that have nexus with Virginia.” The Department also states that “more detailed instructions are being developed and will be posted” soon. Please contact us with any questions.