Virginia Gov. Bob McDonnell has signed legislation requiring retail companies to use a single sales factor apportionment formula in computing their state corporate income tax liability. The modification is effective beginning July 1, 2012, and will be phased in as follows:
— for taxable years beginning on or after July 1, 2012, but before July 1, 2014, retail companies are required to use a triple-weighted sales factor;
— for taxable years beginning on or after July 1, 2014, but before July 1, 2015, retail companies are required to use a quadruple-weighted sales factor; and
— for taxable years beginning on or after July 1, 2015, and thereafter, retail companies are required to use the single sales factor method to apportion Virginia taxable income.
As previously reported (TAXDAY, 2012/02/21, S.5), a retail company is defined as a “domestic or foreign corporation primarily engaged in activities that, in accordance with the North American Industry Classification System (NAICS), United States Manual, United States Office of Management and Budget, 1997 Edition, would be included in Sectors 44-45.”
Ch. 86 (H.B. 154), Laws 2012, effective as noted