Tax Type
Individual Income Tax
Description
No Virginia income and were not required to file a Virginia income tax return for 2004.
Topic
Persons Subject to Tax
Residency
Taxable Income
Date Issued
08-29-2008
August 29, 2008
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 "Taxpayers") for the 2004 taxable year.
FACTS
The Taxpayers, a husband and wife, moved from Virginia to ***** ("Country A") in July 2001 when the husband took a position as a pastor in a church. The Taxpayers received support for their missions work from several church organizations located in Virginia. The organizations issued federal miscellaneous income information returns (Form 1099-MISC) for the taxable year at issue.
After being contacted by the Department, the Taxpayers filed a 2004 nonresident Virginia individual income tax return and paid Virginia tax. The Department adjusted the return after determining that all of the income reported by the church organizations was Virginia source income. The Taxpayers appeal the assessment resulting from the adjustment and contend they did not spend any time in Virginia or perform any services in Virginia during 2004. The Taxpayers believe they are not even required to file a Virginia nonresident income tax return.
DETERMINATION
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."
Virginia Code § 58.1-302 defines income and deductions from Virginia sources to include items of income, gain, loss and deduction attributable to a business, trade, profession or occupation carried on in Virginia. In 2004, the Taxpayers did not perform their missionary work in Virginia. As such, they had no Virginia source income and were not required to file a Virginia income tax return for 2004. Accordingly, the assessment for the 2004 taxable year has been abated. A refund of the income tax paid for 2004, with interest, will be issued to the Taxpayers.
The Code of Virginia sections, along with other reference documents, 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 Office of Tax Policy, 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/1-2039284280.B
Rulings of the Tax Commissioner