58.1-446 - Price manipulation; intercorporate transactions; parent corporations and subsidiaries.
§ 58.1-446. Price manipulation; intercorporate transactions; parentcorporations and subsidiaries.
When any corporation liable to taxation under this chapter by agreement orotherwise conducts the business of such corporation in such manner as eitherdirectly or indirectly to benefit the members or stockholders of thecorporation, or any of them, or any person or persons directly or indirectlyinterested in such business, by either buying or selling its products or thegoods or commodities in which it deals at more or less than a fair pricewhich might be obtained therefor, or when such a corporation sells itsproducts, goods or commodities to another corporation or acquires anddisposes of the products, goods or commodities of another corporation in suchmanner as to create a loss or improper taxable income, and such othercorporation by stock ownership, agreement or otherwise controls or iscontrolled by the corporation liable to taxation under this chapter, theDepartment may require such facts as it deems necessary for the propercomputation provided by this chapter and may for the purpose determine theamount which shall be deemed to be the Virginia taxable income of thebusiness of such corporation for the taxable year. In determining suchincome, the Department shall have regard to the fair profits which, but forany agreement, arrangement or understanding, might be, or could have been,obtained from dealing in such products, goods or commodities.
Any corporation liable to taxation under this chapter and either owned orcontrolled by or owning or controlling, either directly or indirectly,another corporation may be required by the Department to make a reportconsolidated with such other corporation showing the combined gross and netincome and such other information as the Department may require, butexcluding intercorporate stockholdings and the intercorporate accounts. Incase it appears to the Department that any arrangements exist in such amanner as improperly to reflect the business done or the Virginia taxableincome earned from business done in this Commonwealth, the Department may, insuch manner as it may determine, equitably adjust the tax. In all casesmentioned in this paragraph, such other corporations not otherwise liable totaxation under this chapter shall, for the purposes of this chapter, bedeemed to be doing business in Virginia through the agency of the corporationliable to taxation under this chapter.
(Code 1950, § 58-151.083; 1971, Ex. Sess., c. 171; 1984, c. 675.)