CHAPTER 14

An Act to amend the Code of Virginia by adding thereto in Title 58,
Chapter 4, a new article numbered 9 and new sections numbered
§8-151.86 through 58-151.41, so as to provide for declarations of
estimated income tax by corporations and payment of estimated
ancome tax; to amend and reenact § 58-151, as amended, of the Code
of Virginia, relating to time of payment of corporation income taxes;
and to repeal §§ 58-149 and 58-150 of the Code of Virginia, relating
to certain procedures.

[S 92]

Approved February 7, 1968

Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia be amended by adding thereto in Title 58,
Chapter 4, a new article numbered 9 and new sections numbered 58-151.36
through 58-151.41, the new article and new sections being as follows:

Article 9.
Declarations of Estimated Income Taz by Corporations.

§ 58-151.86. Declarations of estimated tax.—(a) Requirement of
declaration.—Every corporation subject to taxation under this Chap. 4
of Title 58 of the Code of Virginia, as amended, shall make a declaration
of estimated tax for the taxable year if its income tax imposed by this
chapter, for such taxable year, reduced by any credits allowable against
the tax, can reasonably be expected to exceed five thousand dollars.

(b) Estimated tax.—For purposes of this article, the term “estt-
mated tax” means the excess of the amount which the corporation esti-
mates as the amount of the income tax imposed by this chapter for the
taxable year over the amount which the corporation estimates as the sum
of any credits allowable against the tax.

(c) Contents of declaration.—The declaration shall contain such
pertinent information as the Commissioner may by forms or regulations
prescribe.

(d) Amendment of declaration.—A corporation may make amend-
ments of a declaration filed during the taxable year under regulations
prescribed by the Commissioner, not exceeding the number specified in
§ 58-151.87(b).

(e) Short taxable year.—A corporation with a taxable year of less
than twelve months shall make a declaration in accordance with regula-
tions prescribed by the Commissioner.

§ 58-151.87. Time for filing declarations of estimated income tax by
corporations.—(a) General rule—The declaration of estimated tax re-
quired of corporations by § 58-151.86 shall be filed as follows:

If the requirements of § 58-151.86 The declaration shall be filed on or
are first met— before—

before the 1st day of the 4th
month of the taxable year............ the 15th day of the 4th month of
after the last day of the 8rd month

and before the 1st day of the 6th

month of the taxable year.........+ the 15th day of the 6th month of

the taxable year

after the last day of the 5th month

and before the 1st day of the 9th

month of the taxable year............ the 15th day of the 9th month of the

taxable year

after the last day of the 8th month

and before the ist day of the

12th month of the taxable year....the 15th day of the 12th month of

the taxable year

(b) Amendment.—An amendment of a declaration may be filed in
any interval between installment dates prescribed for the taxable year,
but only one amendment may be filed in each such interval.

(c) Short tazable year.—The application of this section to taxable
years of less than twelve months shall be in accordance with regulations
prescribed by the Commissioner.

§ 58-151.88. Installment payments of estimated income taz by cor-
porations.—(a) Amount and time for payment of each installment.—The
amount of estimated tax (as defined in § 58-151.86(b)) with respect to
which a declaration is required under § 58-151.86 shall be paid in in-
stallments in accordance with the following table:

The following percentages of the
estimated tax shall be paid on the
15th day of the

If the declaration is timely filed on

or before the 15th day of the— 4th 6th 9th 12th
month month month month
4th month of the taxable year...... 25 25 25 25

6th month of the taxable year

(but after the 15th day of the

Ath MONK) ....ccccccccccocsccccscccscceees voce 83Y; 8381 838,

9th month of the taxable year (but

after the 15th day of the 6th

MONTN) ...ccrcccccccccsccsecccrescccccsoressens eee wees 50 50

12th month of the taxable year (but

after the 15th day of the 9th

TNONTN) ...crrcscccsecccccscccccccvccensecenseee weve voce voce 100

(b) Timely filing.—A declaration is timely filed if it is not required
by § 58-151.87(a) to be filed on a date (determined without regard to
any extension of time for filing the declaration) before the date it ts
actually filed.

(c) Late filing.—If the declaration is filed after the time prescribed
in § 58-151.87(a) (determined without regard to any extension of time
for filing the declaration), there shall be paid at the time of such filing all
installments of estimated tax which would have been payable on or be-
fore such time if the declaration had been filed within the time prescribed
im § 58-151.87(a), and the remaining installments shall be paid at the
times at which, and in the amounts in which, they would have been
payable if the declaration had been so filed.

(d) Amendment of declaration.—If any amendment of a declara-
tion is filed, the amount of each remaining installment (if any) shall be
the amount which would have been payable if the new estimate had been
made when the first estimate for the taxable year was made, increased
or decreased (as the case may be), by the amount computed by dividing:
(1) The difference between (a) the amount of estimated tax required to
be paid before the date on which the amendment is made, and (b) the
amount of estimated tax which would have been required to be paid be-
fore such date if the new estimate had been made when the first estimate
was made, by (2) the number of installments remaining to be paid on
or after the date on which the amendment ts made.

(e) Application to short taxable year.—The application of this sec-
tion to taxable years of less than twelve months shall be in accordance
with regulations prescribed by the Commissioner.

(f) Installments paid in advance.—At the election of the corpo-
ration, any installment of the estimated tax may be paid before the date
prescribed for its payment.

(9) Payments are on account of tax imposed for taxable year.—
Payment of the estimated income tax, or any installment thereof, shall
be considered payment on account of the income tax imposed by this
chapter for the taxable year.

(h) Extensions of time.——The Commissioner may grant a reason-
able extension of time for payment of estimated tax (or any installment),
or for filing any declaration pursuant to this article, on condition that
the taxpayer shall pay interest on the amount involved at the rate of
one-half of one percent per month or fraction thereof from the time the
payment was due until the time of payment. No such extension shall
exceed six months.

§ 58-151.89. Where declarations filed and how payments made;
crediting or refunding overpayments.—(a) Every corporation required
by this article to file a declaration of estimated income tax shall file the
same with the Department of Taxation, and all payments shall be made
to it. All moneys collected by the Department under this article shall
be paid into the general fund of the State treasury.

If any corporation overestimates and overpays estimated tax, the
Department may act under § 58-148, or §§ 58-1118 and 58-1119, within
the applicable period of limitations, whether or not an application has
been filed. Moreover, the Commissioner may prescribe regulations pro-
viding for the crediting against the estimated income tax for any taxable
year of the amount shown by the corporation or determined by the Com-
missioner to be an overpayment of the income tax for a preceding taz-
able year within the applicable period of limitations.

§ 58-151.40. Failure by corporation to pay estimated income tax.—
(a) Addition to the tax.—In case of any underpayment of estimated taz
by a corporation, except as provided in subsection (d), there shall be
added to the tax for the taxable year an amount determined at the rate
of six percent per annum upon the amount of the underpayment (deter-
mined under subsection (b)) for the period of the underpayment (deter-
mined under subsection (c)). ;

(b) Amount of underpayment.—For purposes of subsection (a),
the amount of the underpayment shall be the excess of —

_(1) The amount of the installment which would be required to be
paid tf the estimated tax were equal to eighty percent of the tax shown
on the return for the taxable year or, if no return was filed, eighty per-
cent of the tax for such year, over

(2) The amount, if any, of the installment paid on or before the
last date prescribed for payment.

(c) Period of underpayment.—The period of the underpayment shall
run from the date the installment was required to be paid to whichever
of the following dates is the earlier—

(1) The fifteenth day of the fourth month following the close of
the taxable year.

(2) With respect to any portion of the underpayment, the date on
which such portion is paid. For purposes of this paragraph, a payment
of estimated tax on any installment date shall be considered a payment
of any previous underpayment only to the extent such payment exceeds
the amount of the installment determined under subsection (b) (1) for
such installment date.

(d) Exception.—Notwithstanding the provisions of the preceding
subsections, the addition to the tax with respect to any underpayment
of any installment shall not be imposed if the total amount of all pay-
ments of estimated tax made on or before the last date prescribed for
the payment of such installment equals or exceeds the amount which
would have been required to be paid on or before such date if the esti-
mated tax were whichever of the following ts the lesser—

(1) The tax shown on the return of the corporation for the pre-
ceding taxable year, if a return showing a liability for tax was filed by
the corporation for the preceding taxable year and such preceding year
was a taxable year of twelve months.

(2) An amount equal to the tax computed at the rate applicable
to the taxable year but otherwise on the basis of the facts shown on the
return of the corporation for, and the law applicable to, the preceding
taxable year.

(3) (A) An amount equal to eighty percent of the tax for the
taxable year computed by placing on an annualized basis the taxable in-
come:

(i) for the first three months of the taxable year, in the case of
the installment required to be paid in the fourth month,

(7) for the first three months or for the first five months of the
taxable year, in the case of the installment required to be paid in the
sixth month,

(iii) for the first six months or for the first eight months of the
taxable year, in the case of the installment required to be paid in the
ninth month, and

(iv) for the first nine months or for the first eleven months of the
taxable year, in the case of the installment required to be paid in the
twelfth month of the taxable year.

(B) For purposes of this paragraph, the taxable income shall be
placed on an annualized basis by (1) multiplying by twelve the taxable in-
come referred to in subparagraph (A), and (ii) dividing the resulting
amount by the number of months in the taxable year (8, 5, 6, 8, 9, or 11,
as the case may be) referred to in subparagraph (A).

(e) Definition of tax—For purposes of subsections (b), (d) (2),
and (d) (8), the term “‘tax’”’ means the excess of the tax imposed by this
chapter over the sum of any credits allowable against the taz.

(f) Short taxable year.—The application of this section to taxable
years of less than twelve months shall be in accordance with regulations
prescribed by the Commissioner.

§ 58-151.41. Taxable years to which §§ 58-151.86 through 58-151.40
applicable-—The foregoing sections of this article shall apply with re-
spect to taxable years beginning after December thirty-one, nineteen hun-
dred and sixty-eight.

2. That § 58-151, as amended, of the Code of Virginia be amended and
reenacted as follows:

§ 58-151. Time of payment of corporation income taxes; * penalty
and interest for nonpayment.—* Every corporation liable for income tax
shall pay the same to the Department of taxation at the time fixed by
law for filing the return. The full amount of the tax payable as shown
on the face of the return shall be so paid. A corporation may file its
return and pay its tax in full in the closing days of its taxable year
provided it is able to prepare a complete return.

If any payment is not made in full when due, there shall be added
to the entire tax or to any unpaid balance of the tax, as the case may be,
a penalty of five percent of the amount thereof, and the entire tax or any
unpaid balance of the tax, as the case may be, together with such penalty,
will immediately become collectible, and interest upon such tax or any
unpaid balance of the tax, as the case may be, and on the accrued penalty,
shall be added at the rate of one-half of one percent per month or fraction
thereof from one month after the tax or any unpaid balance of the
tax, as the case may be, was originally due until paid; but in the case
of an additional tax assessed by the Department of Taxation, if the return
was made in good faith and the understatement of the amount in the
return was not due to any fault of the taxpayer, there shall be no penalty
on the additional tax because of such understatement, but interest shall
be added to the amount of the deficiency at the rate of one-half of one
percent per month or fraction thereof from the time the said return was
required by law to be filed until paid.

All moneys collected by the Department of Taxation under this article
shall be paid into the general fund of the State treasury.

This section, as hereby amended, shall apply with respect to taxable
years beginning after December thirty-one, nineteen hundred and sixty-
eight.

3. That §§ 58-149 and 58-150 of the Code of Virginia be repealed, such
repeal to be effective with respect to taxable years beginning after De-
cember thirty-one, nineteen hundred and sixty-eight.