RD234 - Combined Report on Corporate Tax Preferences, the Major Business Facility Job Tax Credit, and the Modified Method of Apportionment for Manufacturing Companies

Executive Summary:
Virginia Code § 58.1-202 requires the Tax Commissioner to submit an annual report detailing the total amount of corporate income tax relief provided in the Commonwealth by October 1 of each year. Acts of Assembly 2010, Chapter 379, amended Va. Code § 58.1-202 to require the Tax Commissioner to include summary information regarding the types of taxpayers who claim corporate income tax relief. In addition, this legislation now requires the Tax Commissioner to include the information previously reported on the Major Business Facility Job Tax Credit with the October 1 corporate preferences report.

This report identifies the types of corporate taxpayers claiming corporate preferences during Taxable Year 2011 ("TY 2011"), including the filing status and the North American Industry Classification System ("NAICS") code of such taxpayers. This report also identifies each tax credit claimed by corporations and includes the total dollar amount of income tax subtractions claimed cumulatively by corporations on TY 2011 returns that were processed by September 1, 2013. This report identifies the number of corporate and individual taxpayers claiming the Major Business Facility Job Tax Credit for TY 2011 and the amount of such credit claimed through August 2013. In addition to information about corporate preferences claimed for the 2011 taxable year, this report also identifies the number of corporate taxpayers that elected to use the modified method of apportionment for manufacturers on TY 2011 returns that were processed by September 1, 2013.

Because some corporations file on a fiscal year basis, this report includes most, but not all, corporations that filed on a fiscal year basis for TY 2011. For example, a fiscal year beginning December 1, 2011 would end November 30, 2012, and the return may be filed under extension as late as September 16, 2013. Thus, this return would not be included in this report.

The Department of Taxation ("the Department") needs several months to process returns and resolve errors before complete data for a taxable year are available. The data capturing process includes various tests for data integrity and the Department must manually review and correct any discrepancies before the information is available. The information contained in this report is based on data that was reported by taxpayers on their annual tax returns. Some of these returns may be subject to audit in the future and the credits and subtractions claimed by some taxpayers may be adjusted. Accordingly, the data in this report may differ from that included in other reports, such as the Department's Annual Report, where the data reported takes into account audit adjustments, amended returns, and other relevant changes.