Income/Franchise:
Virginia: Ruling Addresses Whether Subsidiary May File as Part of Combined Return with Affiliates
Public Document No. 22-161, Va. Dept. of Tax. (12/30/22). In an administrative ruling, the Virginia Department of Taxation (Department) held that a subsidiary was correctly included on a state combined corporate income tax return with its affiliates for the tax year at issue, even though it had filed a Virginia Insurance Premiums License Tax Surplus Lines Broker’s Annual Reconciliation Tax Report (Form 802). In doing so, the Department noted that the subsidiary had Virginia payroll, properties, positive Virginia apportionment factors and was conducting activities creating Virginia corporate income tax nexus. Accordingly, because Virginia’s administrative code (i.e., Title 23 of the Virginia Administrative Code (VAC) 10-120-323 B 1) permits members of affiliate groups to file a combined return if they would be subject to tax if a separate Virginia corporate income tax return were filed, are “affiliated,” and are filing using the same taxable year, the subsidiary in this case was eligible to be included on the Virginia combined return with its affiliates. Please contact us with any questions.
30 Rockefeller Plaza New York, NY 10112-0015 United States
About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
Deloitte provides industry-leading audit and assurance, tax and legal, consulting, financial advisory, and risk advisory services to nearly 90% of the Fortune Global 500® and thousands of private companies. Our professionals deliver measurable and lasting results that help reinforce public trust in capital markets, enable clients to transform and thrive, and lead the way toward a stronger economy, a more equitable society and a sustainable world. Building on its 175-plus year history, Deloitte spans more than 150 countries and territories. Learn how Deloitte’s approximately 415,000 peopleworldwide make an impact that matters at www.deloitte.com.
