ADMINISTRATIVE NOTICE 96-23


	SUBJECT:	Business Franchise Tax and Corporation Net Income Tax -- Financial Organizations -- Method of filing.

			Special Rule allows financial organizations to file consolidated returns for taxable years beginning after December 31, 1990.  Returns for 1991 and 1992 due July 1, 1996.


	Out-of-state financial organizations which are part of an affiliated group of corporations that file a consolidated federal income tax return may now elect to file consolidated West Virginia business franchise tax ("WVBFT") returns and consolidated West Virginia corporation net income tax ("WVCNIT") returns as provided in Senate Bill 129.  This change is effective for taxable years beginning after December 31, 1995.

	For taxable years that began after December 31, 1990, but before January 1, 1996, out-of state financial organizations doing business in West Virginia were required to file WVBFT and WVCNIT returns on a separate return basis even though the financial organization filed as part of an affiliated group for federal income tax purposes.  SB 129 allows these financial organizations to now join in filing consolidated WVBFT returns and consolidated WVCNIT returns for those years.  Where the 3-year statute of limitations on filing an amended return has expired or will expire before July 1, 1996, taxpayers who elect to file on a consolidated basis must file consolidated returns for those years by July 1, 1996.

	             	  		Amended Return	 SB 129 Special
      Calendar Year	   Return Due	         Due		  Rule Due Date	

	   1991		March 15, 1992	March 15, 1995		July 1, 1996
	   1992		March 15, 1993	March 15, 1996		July 1, 1996
	   1993		March 15, 1994	March 15, 1997		     NA
	   1994		March 15, 1995	March 15, 1998		     NA
	   1995		March 15, 1996	March 15, 1999	   	     NA			

		NOTE:	If return was filed, under an extension of time, by the extended due date, the 3-year rule is calculated from the date the return was filed.

	Financial organizations which have their commercial domicile in West Virginia were previously allowed to file consolidated returns or combined returns only when all corporations included in the consolidated or combined WVBFT and WVCNIT returns had their commercial domicile in West Virginia.  These financial organizations may also review returns they filed for 1991 through 1995 and may elect to file on a separate return basis (if they previously filed on a consolidated or combined return basis) or file on a consolidated basis (if they previously filed on a separate return basis or a combined return basis).  When the time period for filing amended returns has expired, the amended returns must be filed by July 1, 1996.

    	Financial organizations which desire to file consolidated WVBFT returns and consolidated WVCNIT returns for taxable years beginning after December 31, 1990, must determine the West Virginia capital and the West Virginia taxable income of the affiliated group using the methodology set forth in SB 129.  These new rules and instructions for preparing consolidated returns using those rules are set forth in publication TSD 397. 




							
ISSUED: May ___, 1996				James H. Paige III
							Secretary/Tax Commissioner



For additional information, please write or call:

W. Va. Dept. of Tax and Revenue			Operator on Duty 8:30 am - 4:30 pm
Taxpayer Services Division				Monday through Friday
P. O. Box 3784						Telephones:  (304) 558-3333 or
Charleston, WV  25337-3784				1-800-982-8297 (within W. Va. only)
							Telecopier:  (304) 558-3269
							TDD Service for the hearing impaired:
			1-800-282-9833