Affiliated groups of corporations that file a Virginia consolidated return including retailers and manufacturers along with other non-retailers and non-manufacturers, may still benefit from electing the single sales factor method for manufacturers.
Manufacturers, starting with tax years beginning after 7/1/2011, may elect to use the single sales factor method. The election is phased-in over three years. For more info, check out my previous post.
Retail companies, starting with tax years beginning after 7/1//2012, will be required to use the single sales factor method. For more info, check out my previous post.
How Do These Changes Impact a Virginia Consolidated Return
In a Virginia consolidated return, retailers and manufacturers would still get to make the election. If the consolidated return includes non-retailers and non-manufacturers who are required to use the standard double-weighted sales factor formula, then the mixed apportionment method would come into play.
The mixed apportionment method would still allow a retailer and manufacturer to benefit from their single sales factor apportionment percentages. This result coupled with some additional planning may provide significant benefit to taxpayers filing a Virginia consolidated return.
If you would like to analyze your company's situation for planning opportunities, please contact me.