Document Number
Tax Type
Individual Income Tax
Taxpayer worked one week per month in VA a total of 60 workdays per year
Persons Subject to Tax
Date Issued

August 16, 2006

Re: § 58.1-1821 Application: Individual Income Tax

Dear ******************:

This will reply to your letter in which you seek correction of the individual income tax assessments issued to ***** (the "Taxpayers") for the taxable years ended December 31, 2002 and 2003. I apologize for the delay in responding to your appeal.


The Taxpayers, a husband and wife, are domiciliary residents of *****(State A). The husband is a shareholder in a Virginia-based S corporation ("VSC"). The husband worked for VSC in both Virginia and State A during 2002 and 2003.

Under audit, the Department increased the amount of the Taxpayer's salary from VSC attributed to Virginia. The Taxpayers contend that the Department misinterpreted the documentation provided and request that the auditor's adjustments to the 2002 and 2003 taxable year returns be reversed.


Individuals who are neither domiciliary nor actual residents of Virginia and have income from Virginia sources are taxed as nonresidents. The Virginia taxable income of a nonresident is defined under Va. Code § 58.1-325 as "an amount bearing the same proportion to his Virginia taxable income, computed as though he were a resident, as the net amount of his income, gain, loss and deductions from Virginia sources bears to the net amount of his income, gain, loss and deductions from all sources."

The Department has previously ruled that a nonresident who works in Virginia may apportion his or her salary to Virginia using a ratio of (1) the number of days or portion thereof spent in Virginia performing duties for his or her employer, divided by (2) the number of days or portion thereof spent anywhere performing duties for his or her employer. See Public Document 85-134 (6/18/85). As a general rule, the Department uses 260 days in the denominator of the ratio for determining wages attributable to Virginia. Taxpayers who claim to have worked more than 260 days during a given taxable year must document that claim.

The documentation provided to the auditor showed that the Taxpayer had received permission from VSC to "work in Virginia one week per month, with flexibility to come and go as he pleases." Based on this information, the tax returns were adjusted to reflect that the Taxpayer worked for VSC a total of one week per month during each taxable year and a total of 60 workdays per year.

The Taxpayers contend that he was a full-time employee of VSC during 2002 and 2003. The Taxpayer was permitted to limit his work in Virginia to one week per month. This reduced travel time and expense for both the Taxpayer and VSC. Actual travel and other work-related documentation supports his contention of full-time employment. Accordingly, the Department has adjusted the Taxpayers' joint nonresident income tax returns for the 2002 and 2003 taxable years to apportion the husband's income based on 60 workdays in Virginia during a work year of 260 days. A schedule is enclosed that reflects the adjustments made to the 2002 and 2003 taxable year returns.

Revised assessments for the 2002 and 2003 taxable years will be issued in accordance with the enclosed schedule. No additional interest will accrue provided the total outstanding balance is paid within 30 days from the date of this letter. The Taxpayer should remit payment to: Virginia Department of Taxation, Office of Policy and Administration, Appeals and Rulings, Post Office Box 27203, Richmond, Virginia 23261-7203, Attention: *****.

The Code of Virginia section cited, along with other reference documents, are available on-line in the Tax Policy Library section of the Department's web site, located at If you have any questions about this determination or payment of assessment, you may contact ***** at *****.
                • Sincerely,

                • Janie E. Bowen
                  Tax Commissioner


Rulings of the Tax Commissioner

Last Updated 08/25/2014 16:46