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July 1 Reporting Requirement for Corporations Doing Business in the Commonwealth of Virginia

corporate income tax calculations with the Commonwealth of Virginia

Corporate entities that do business in the Commonwealth of Virginia have likely received a notice about a report they are required to file by July 1, 2021. The report, which should be based on 2019 corporate income tax calculations, intends to identify each business’ required tax payment should they file as part of a unitary combined group. Submitting the report will not result in taxes or fees though a failure to file, a late filing, a material omission or a misstatement can lead to a $10,000 penalty. Tax filings for 2020 or 2021 will not be affected.

Respondents will be asked the following question: “Was your entity a member of a multi-state unitary business for taxable year 2019 that is subject to the reporting requirement?”

The Commonwealth of Virginia defines a unitary business as a “single economic enterprise made up either of separate parts of a single business entity or of a commonly controlled group of business entities that are sufficiently interdependent, integrated and interrelated through their activities so as to provide a synergy and mutual benefit that produces a sharing or exchange of value among them and a significant flow of value to the separate parts.”

See Item 3-5.23 in the Enrolled Budget Bill (House Bill 1800) for more information by clicking here.

The inquiry is intended to determine if the entity is one business with a legal structure that makes it multiple businesses. If your answer to the question above is yes, further questions must be answered based on your 2019 tax filings.

You may complete the report using your corporate FEIN and the correspondence ID from the letter you received at this URL: https://www.business.tax.virginia.gov/unitary/#/ubg/reporting.

A helpful FAQ may be found online by clicking here.

Please contact Richard Morris, Director of Taxes at Councilor, Buchanan & Mitchell, P.C., via our online contact form with any questions.

Councilor, Buchanan & Mitchell (CBM) is a professional services firm delivering tax, accounting and business advisory expertise throughout the Mid-Atlantic region from offices in Bethesda, MD and Washington, DC

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