Tax Type
Individual Income Tax
Description
District of Columbia Unincorporated Business Franchise Tax; Out-of-state tax credit
Topic
Credits
Taxable Income
Date Issued
05-03-1985
May 3, 1985
Re: Section 58.1-1821 Application
1977 and 1978 Individual Income Taxes
Dear ****
This is in response to your letter of January 25, 1982, in which you stated that your payment of interest on the 1977 individual income tax assessments was being made under protest, subject to the final outcome of the litigation relating to the District of Columbia's Unincorporated Business Franchise Tax.
The Circuit Court for the District of Columbia has held that the District's tax was, in part, in violation of its Home Rule Charter and has ordered the District to refund the taxes collected thereunder. The Commonwealth of Virginia's petition for appeal to the Virginia Supreme Court on the issue of creditability was, therefore, dismissed as moot on October 7, 1981.
The Virginia Department of Taxation consistently held from the beginning that the District's tax was an illegal tax; thus, the credit was never allowable at any time, even during pendency of the litigation. There is, in fact, no question of liability as to the Virginia taxes assessed. Interest, therefore, was correctly added to the amounts assessed for the taxable years in question, and you have now paid the taxes and interest in full.
Sincerely,
W. H. Forst
Tax Commissioner
Re: Section 58.1-1821 Application
1977 and 1978 Individual Income Taxes
Dear ****
This is in response to your letter of January 25, 1982, in which you stated that your payment of interest on the 1977 individual income tax assessments was being made under protest, subject to the final outcome of the litigation relating to the District of Columbia's Unincorporated Business Franchise Tax.
The Circuit Court for the District of Columbia has held that the District's tax was, in part, in violation of its Home Rule Charter and has ordered the District to refund the taxes collected thereunder. The Commonwealth of Virginia's petition for appeal to the Virginia Supreme Court on the issue of creditability was, therefore, dismissed as moot on October 7, 1981.
The Virginia Department of Taxation consistently held from the beginning that the District's tax was an illegal tax; thus, the credit was never allowable at any time, even during pendency of the litigation. There is, in fact, no question of liability as to the Virginia taxes assessed. Interest, therefore, was correctly added to the amounts assessed for the taxable years in question, and you have now paid the taxes and interest in full.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner