                                 CODE OF VIRGINIA

PRICE MANIPULATION; INTERCORPORATE TRANSACTIONS; PARENT CORPORATIONS AND
SUBSIDIARIES (§ 58.1-446)

When any corporation liable to taxation under this chapter by agreement or
otherwise conducts the business of such corporation in such manner as either
directly or indirectly to benefit the members or stockholders of the
corporation, or any of them, or any person or persons directly or indirectly
interested in such business, by either buying or selling its products or the
goods or commodities in which it deals at more or less than a fair price which
might be obtained therefor, or when such a corporation sells its products, goods
or commodities to another corporation or acquires and disposes of the products,
goods or commodities of another corporation in such manner as to create a loss
or improper taxable income, and such other corporation by stock ownership,
agreement or otherwise controls or is controlled by the corporation liable to
taxation under this chapter, the Department may require such facts as it deems
necessary for the proper computation provided by this chapter and may for the
purpose determine the amount which shall be deemed to be the Virginia taxable
income of the business of such corporation for the taxable year. In determining
such income, the Department shall have regard to the fair profits which, but for
any 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 or
controlled by or owning or controlling, either directly or indirectly, another
corporation may be required by the Department to make a report consolidated with
such other corporation showing the combined gross and net income and such other
information as the Department may require, but excluding intercorporate
stockholdings and the intercorporate accounts. In case it appears to the
Department that any arrangements exist in such a manner as improperly to reflect
the business done or the Virginia taxable income earned from business done in
this Commonwealth, the Department may, in such manner as it may determine,
equitably adjust the tax. In all cases mentioned in this paragraph, such other
corporations not otherwise liable to taxation under this chapter shall, for the
purposes of this chapter, be deemed to be doing business in Virginia through the
agency of the corporation liable to taxation under this chapter.

HISTORY: Code 1950, § 58-151.083; 1971, Ex. Sess., c. 171; 1984, c. 675.