A. Generally. Telecommunications companies
must calculate both their
minimum tax as provided in
23VAC10-120-83 and their income
tax liability as provided in
23VAC10-120-84 for each
taxable
year. For each
taxable year, the tax liability of a telecommunications
company
will be the greater of its minimum tax or of its corporate income
tax.
B. Amended return. If due to a
change in federal taxable income, or for any other reason, the Virginia taxable
income or
gross receipts of a telecommunications
company is changed, an amended
return must be filed. The minimum tax and corporate income tax must be
recomputed to determine which tax is applicable to the telecommunications
company.
EXAMPLE 1: Telecommunications Company (TC) is a calendar
year filer for federal income tax purposes. For calendar year 1990, it has
$200,000 in gross receipts and Virginia taxable income equal to $35,000. TC's
minimum tax liability is $2,400 ($200,000 X 1.2%) and its Virginia income tax
is $2,100 ($35,000 X 6.0%). Because TC's minimum tax liability exceeds its
income tax liability, it is subject to the minimum tax and must pay $2,400 in
tax.
EXAMPLE 2: Same facts as in Example 1. In 1993 the Internal
Revenue Service audits TC for calendar year 1990 and determines that the
company overreported its wage expense by $6,000; thus TC's federal taxable
income for calendar year 1990 was underreported by $6,000. TC subsequently
amends its Virginia income tax return for calendar year 1990 to report the
additional $6,000 in taxable income. The amended return still shows a minimum
tax liability of $2,400 (no charge in gross receipts) and an income tax
liability of $2,460, 6.0% of ($35,000 + 6,000). Since TC's income tax liability
is now higher than its minimum tax liability, it is now subject to the income
tax. TC owes the department $60 ($2,460 - $2,400).
