Tax Type
Individual Income Tax
Description
Stock dividends and bond interest were not derived from intangibles employed in VA
Topic
Persons Subject to Tax
Date Issued
12-20-2007
December 20, 2007
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 assessment issued to ***** (the "Taxpayer") for the taxable year ended December 31, 2003.
FACTS
The Taxpayer, a resident of ***** (State A), received federal informational returns at an address of a house she owned in Virginia. A review of the Department's records indicates the Taxpayer had not filed a Virginia individual income tax return for the taxable year at issue. When requested information was not timely provided by the Taxpayer, the Department determined that the Taxpayer had Virginia source income and issued an assessment. The Taxpayer contests the assessment, asserting that she was a resident of State A and had minimal Virginia source income that would not subject her to a Virginia filing requirement.
DETERMINATION
Pursuant to Va. Code § 58.1-325, a nonresident individual who has income from carrying on a business, trade, profession, or occupation within Virginia is required to file a Virginia individual income tax return, unless the individual meets the filing exception described in Va. Code § 58.1-321. The Virginia taxable income of a nonresident is computed by multiplying his Virginia taxable income (computed as if he were a resident) by the ratio of his net income, gain, loss, and deductions from Virginia sources to his net income, gain, loss, and deduction from all sources.P. D. 07-215
A review of the evidence indicates that the Taxpayer derived her income from rental property, Social Security benefits, stock dividends, and bond interest. Under Virginia law, income from rental property located outside Virginia, Social Security benefits, stock dividends, and bond interest are not considered Virginia source income to a nonresident individual. In the instant case, the stock dividends and bond interest were not derived from intangibles employed in a business trade, profession or occupation carried on in Virginia. As such, the Taxpayer is not subject to Virginia income tax.
Accordingly, the Virginia income tax assessed against the Taxpayer for the taxable year ended December 31, 2003, has been abated. The Code of Virginia sections cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site. If you have any questions about this determination, you may contact ***** in the Department's Office of Policy and
Administration, Appeals and Rulings, at *****.
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- Sincerely,
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- Janie E. Bowen
Tax Commissioner
- Janie E. Bowen
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AR/1-1671390986B
Rulings of the Tax Commissioner