Virginia Tax Commissioner Determines Pass-Through Entity Not Entitled to Use Alternative Apportionment Income Tax Method

The Virginia Tax Commissioner July 27 determined in a letter ruling that Taxpayer, a family limited partnership, wasn’t permitted to use an alternative method of apportionment for individual income and corporate income tax purposes. Taxpayer owned a rental properties in Virginia and other states and believed that Virginia’s apportionment method didn’t accurately reflect income earned in Virginia. Taxpayer requested permission to allocate income to Virginia based on separate accounting. The commissioner found: 1) if the pass-through entity’s entire business wasn’t transacted or conducted within Virginia, then its income from Virginia sources was the portion of income allocated and apportioned to ...