On April 7, the Virginia Department of Taxation announced that certain corporations subject to Virginia state income tax must file a one-time report by July 1, 2021. Corporate taxpayers that fail to file the report timely, or make a material misstatement or omission may be subject to a $10,000 penalty.
The purpose of the report is to show the difference between the amount of tax the corporation would pay if it filed as part of a unitary combined group and the amount of the corporation’s tax based on the current filing requirements.
Corporations must use their 2019 corporation income tax return data to complete the report. The Virginia General Assembly created the requirement so that the department can put together a study detailing the revenue impacts of combined corporate income tax reporting. While there is no tax due with the informational report, there are substantial penalties as outlined previously. The Virginia Tax Commissioner will report back to the General Assembly by Dec. 1, 2021, with a detailed summary based on the informational reports and data collected. Taxpayers are able to file their report using the Virginia Department of Taxation’s web upload application on their website as of May 1.
For information about how this may affect you and your business, please contact a member of our team.
Published on May 11, 2021