State and Local Tax Alert - May 2014
On April 1, 2014, Virginia Governor Terry McAuliffe signed H.B. 5001, 2014 Special Session I, which included two new limitations with respect to Virginia’s related member intangible expense add-back requirement:
1. the subject to tax exception only applies to that portion of corresponding income that is attributed to a jurisdiction where the income receiving related member is subject to tax
2. the contracts with unrelated parties exception only applies where the related member actually has contracts with unrelated parties. These provisions of H.B. 5001 are retroactive to taxable years beginning on or after January 1, 2004.