Tax Type
Individual Income Tax
Description
Request for Nonresident Filing
Topic
Reports
Returns/Payments/Records
Date Issued
08-24-2001
August 24, 2001
Re: Request for Ruling: Individual Income Tax
Dear *****
This will reply to your letter in which you are requesting that ***** (the "Taxpayer"), be granted permission to file a unified nonresident individual income tax return on behalf of its nonresident members. I apologize for the delay in responding to your letter.
FACTS
The Taxpayer operates as a limited liability company ("LLC"). All members are individuals who are nonresidents of Virginia. In order to relieve members of the responsibility of filing Virginia nonresident individual income tax returns, you request permission for the Taxpayer to file unified nonresident individual income tax returns on behalf of the members for the 2001 taxable year and subsequent years.
RULING
Title 23 of the Virginia Administrative Code (VAC) 10-130-20(C)(2) provides that the Tax Commissioner may grant permission to partnerships to file a statement of combined partnership income attributable to nonresident partners. The permission is also granted based upon such terms as the parties may agree. This provision of the VAC relieves the nonresident partners from the responsibility of having to file Virginia nonresident individual income tax returns. Similarly, the department may grant permission to a nonresident LLC to file unified nonresident individual income tax returns.
If the Taxpayer determines it can comply with all of the following conditions, it may file a unified return on behalf of the nonresident members ultimately receiving a share of the limited liability company's income from Virginia sources.
1. A schedule must be provided containing the total income of the limited liability company and the amount attributable to Virginia under either the applicable state apportionment formula, as provided in Code of Virginia §§ 58.1-408 through 58.1-421, or by using an approved alternative method.
2. The unified return must reflect only the income or loss attributable to Virginia nonresident members who have no income from Virginia sources other than income attributable to the limited liability company.
3. All nonresident members without other income from Virginia sources must elect to join in the filing of such a return and a statement to such effect will be included in the return.
4. The return will include each nonresident member's name, address, social security number and Virginia taxable income attributable to each nonresident member.
5. The Virginia income tax will be computed at the rates specified under Code of Virginia § 58.1-320 on the limited liability company's income attributable to the nonresident members without benefit of itemized deductions, standard deductions, personal exemptions, or credit for income taxes paid to states of residence.
6. The return will contain a statement indicating the responsibility of each nonresident member for his share of the total tax and any statements made on his behalf. Each nonresident member will sign the statement.
7. A similar unified return will be filed and payment made for the declaration of estimated tax, if required. Payment of the estimated tax will be made in the name of the limited liability company and will use the limited liability company's identification number. Estimated income tax payments will be made using Form 760ES, Virginia Estimated Income Tax Payments for Individuals, Estates, and Trusts.
8. A copy of the letter from the Tax Commissioner authorizing the filing of a unified nonresident income tax return must be attached to the unified return when it is filed. The unified nonresident income tax return is to be filed using Form 763, Virginia Nonresident Individual Income Tax Return.
If the aforementioned conditions are acceptable, the Taxpayer may commence the unified filing under the above conditions effective for the taxable year beginning January 1, 2001. The department, however, reserves the right to withdraw or modify the forgoing authorization upon reasonable notice to the Taxpayer.
This ruling has been made subject to the facts presented to the department as summarized above. Any change in these facts or the introduction of facts by another party may lead to a different result. If you have any questions regarding this ruling, you may contact ***** in the Office of Policy Development at ******.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/32713G
Rulings of the Tax Commissioner