Tax Type
Declaration of Estimated Income Tax by Individuals
Individual Income Tax
Description
Merchant seaman; Estimated tax payments
Topic
Persons Subject to Tax
Date Issued
01-17-1984
January 17, 1984
Re: Ruling Request: Individual
Dear ****
This will reply to your letter of October 27, 1983 concerning payment of Virginia estimated tax by a merchant seaman.
As you acknowledge, 46 U.S.C.A. § 601 prohibits the withholding of state taxes from a seaman's wages unless pursuant to a voluntary agreement between the seaman and his employer. The prohibition exists to prevent multiple withholdings from wages of seamen who might be in ports of different states when they receive their pay. There is no comparable difficulty for estimated payments. A taxpayer would not be obligated to pay income tax to a state merely because he happened to be in that state's port when he received his pay. In any event, you have made no claim that you are not liable to pay Virginia income tax.
Before the prohibition against withholding was enacted by a 1959 amendment to the statute, withholding of state taxes was permissible. Similarly, because estimated payments of tax by the seaman-taxpayer are not prohibited by statute, a state is free to require such payments. In addition, the tax laws do not link the timing of tax payments to the convenience of making such payments, nor is income exempt from withhold-ing necessarily exempt from estimated payments. For example, tax is not withheld from a minister's wages but he is still obligated to pay estimated tax if his salary level meets applicable requirements.
In sum, a merchant seaman is not exempt from estimated payments. If the timing of the payments are inconvenient, a seaman could enter into a voluntary withholding agreement with his employer. If estimating the amount of wages is difficult, a seaman can avoid an underpayment penalty by paying at least the amount of the previous year's taxes.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner