Delaying the deadline for filing Virginia information returns.

On September 5, 1997, Tax Executives Institute submitted the following comments to Danny M. Payne, Tax Commissioner for the Commonwealth of Virginia, on proposals to conform the due date for filing Virginia information returns (VA-6) with the deadline for filing comparable federal forms. The preparation of the Institute's comments, which took the form of a letter from 1997-1998 International President Paul Cherecwich, Jr., was coordinated by TEI's State and Local Tax Committee, whose chair is Lisa Norton of Ingersoll-Rand Company. Also involved in the process was Wayne E. Sine of Southern States Cooperative, Inc., president of TEIs Virginia Chapter.

On behalf of Tax Executives Institute, I am pleased to submit the following comments on a legislative proposal to change the filing date for Form VA-6, Employer's Annual or Final Summary of Virginia Income Tax Withheld. You were kind enough to provide a copy of the proposal to Wayne E. Sine of Southern States Cooperative, Inc., who is the current president of TEI's Virginia Chapter.

Background

Tax Executives Institute is the professional association of corporate tax executives. Our 5,000 members are accountants, attorneys, and other business professionals who work for the largest 2,700 companies in North America; they are responsible for conducting the tax affairs of their companies and of ensuring their compliance with the tax laws. Hence, TEI members deal with the tax laws and with the Internal Revenue Service and its counterparts in the States on almost a daily basis. One of TEI's 48 local chapters is located in Richmond, and many TEI members in Northern Virginia belong to TEI's Baltimore-Washington Chapter. In addition, members from across the country (and in Canada, too) work for companies with substantial activities (and frequently employees) in Virginia. TEI believes that the professional training and experience of our members enables the Institute to bring an important, and balanced, perspective to the issues such as the deadlines for submitting information returns and other information to the Department of Taxation and, more generally, the efficacy of the States' conforming their filing requirements to those imposed for federal tax purposes by the Internal Revenue Code.

Discussion

Currently, an employer is required to file Form VA-6, Employer's Annual or Final Summary of Virginia Income Tax Withheld, and copies of its Forms W-2 with the Department of Taxation no later than January 31. The legislative proposal under consideration would move the deadline to February 28, effective for taxable years beginning on or after January 1, 1997.

TEI wholeheartedly supports the legislative proposal, which would conform Virginia's filing requirement with those of the federal government. Conformity by itself is desirable, because it minimizes the likelihood of missed deadlines and allows employers to properly plan the deployment of corporate resources, which may be especially important in the first few weeks of the year where competing demands -- such as those for financial reporting purposes -- may be great.

Perhaps even more important, the quality and accuracy of the information submitted will likely be enhanced by according employers an additional month to prepare, verify, and submit their Forms VA-6. Extending the period within which employers may submit Forms VA-6 and associated Forms W-2 will prove especially helpful in respect of the computation of taxable fringe benefits and bonuses. The additional time will permit employers to submit more accurate information on magnetic tapes or diskettes at the same time similar information is submitted to the federal government, obviating the filing of corrected forms and minimizing inconsistencies in the information submitted to the Commonwealth and the federal government. (Under the current regime, an employer who submits information to Virginia on January 31 may subsequently discover an error that is corrected before the comparable information is submitted to the federal government; although a corrected Form VA-6 may be submitted to the Department in respect of the error, the inconsistent (multiple) reports may trigger an inquiry and consume valuable Commonwealth and corporate resources.)

Conclusion

In summary, Tax Executives Institute commends the Department of Taxation for proposing that the filing deadline for Form VA-6 be moved to February 28, and the Institute recommends the enactment of legislation to change the due date for the form.

If TEI can be of further assistance in this matter, please do not hesitate to contact Mr. Wayne E. Sine of Southern States at [phone] or Timothy J. McCormally, the Institute's General Counsel and Director of Tax Affairs, at [phone].