                                 CODE OF VIRGINIA

FINANCIAL CORPORATIONS; APPORTIONMENT (§ 58.1-418)

A. The Virginia taxable income of a financial corporation, as defined herein,
excluding income allocable under &#xA7; 58.1-407, shall be apportioned within
and without this Commonwealth in the ratio that the business within this
Commonwealth is to the total business of the corporation. Business within this
Commonwealth shall be based on cost of performance in the Commonwealth over cost
of performance everywhere.

B. &#8220;Financial corporation&#8221; means any corporation not exempted from
the imposition of tax under the provisions of § 58.1-401, which derives more
than seventy percent of its gross income from the classes of income enumerated
in subdivisions 1 through 4 below, without reference to the state wherein such
income is earned, including but not limited to small loan companies, sales
finance companies, brokerage companies and investment companies:

   1. Fees, commissions, other compensation for financial services rendered;

   2. Gross profits from trading in stocks, bonds, or other securities;

   3. Interest; and

   4. Dividends received to the extent included in Virginia taxable income.

C. In computing the amounts referred to in subdivisions 1 through 4 of
subsection B of this section, any amount received by a member of an affiliated
group, determined under &#xA7; 1504(a) of the Internal Revenue Code but without
reference to whether any such corporation is an includable corporation under
&#xA7; 1504(b) of the Internal Revenue Code, from another member of such group
shall be included only to the extent such amount exceeds expenses of the
recipient directly related thereto.

D. Any eligible company, as defined in &#xA7; 58.1-405.1, may subtract the value
of its business within any qualified locality or qualified localities, as
defined in &#xA7; 58.1-405.1, during the taxable year from the numerator of the
ratio in subsection A. Such eligible company may make such modification for the
taxable year in which it first becomes eligible and for the six subsequent,
consecutive taxable years, except for any year in which the eligible
company&#8217;s (i) total, cumulative new capital investment falls below the
applicable initial threshold or (ii) number of new jobs falls below the
applicable initial threshold.

HISTORY: Code 1950, § 58-151.050:1; 1976, c. 436; 1979, c. 32; 1981, c. 402;
1984, c. 675; 2018, cc. 801, 802.