Tax Type
Individual Income Tax
Description
Out-of-state tax credit; Documentation of taxes paid to another state
Topic
Credits
Date Issued
03-27-1987
March 27, 1987
Re: §58.1-1821 Application/ Individual Income Tax
Dear*********************
This will reply to your letter of November 6, 1986, and additional information received by the department on March 6, 1987, seeking correction of assessments issued in the above referenced case for taxable years 1983 and 1984.
FACTS
While attending school in Georgia during the years 1983 and 1984, ************* (taxpayer) a Virginia domiciliary resident, also earned income from a Georgia employer. According to the department's records, the taxpayer neither filed part year Georgia income tax returns nor reported income earned in Georgia on his Virginia returns for the years in question.
After receiving the assessments from the department in this case the taxpayer was informed that in order to claim an out-of-state tax credit for taxes paid to Georgia for the years stated above, he would first have to provide the department with proof of payment of income taxes to Georgia. Having recently provided the department with copies of part year income tax returns filed with Georgia, the taxpayer now seeks to claim an out-of-state tax credit against his Virginia income tax liability for the years mentioned above.
DETERMINATION
Virginia Code §§ 58.1-320 and 58.1-322 impose an Individual Income Tax on the Virginia taxable income of all "resident" individuals. §630-2-302 of the Individual Income Tax Regulations defines "resident" to include, "any individual domiciled in this state." This same section then defines "domiciliary resident to mean "one whose legal domicile is Virginia... Any person who has not moved from the state with the intention of permanently residing outside of Virginia is still a domiciliary resident even though he may be actually living some place else."
Furthermore, Virginia Code §58.1-332(A) provides that "[w]henever a resident of the Commonwealth has become liable for income tax to another state, on earned or business income, or any part thereof, for the taxable year, derived from sources without the Commonwealth and subject to taxation under this chapter, the amount of income tax payable by him shall, upon proof of such payment, be credited on his return with the income tax so paid by him to such other state."
Based on the Georgia part year returns submitted and additional information provided by the Georgia Department of the Revenue, I find basis for granting an out-of-state tax credit for taxes paid by the taxpayer to Georgia in the years mentioned above. Accordingly, a revised assessment will be issued to the taxpayer under separate cover. The entire amount of such revised assessment will be immediately due and payable upon receipt by the taxpayer.
Sincerely,
W. H.Forst
Tax Commissioner
Rulings of the Tax Commissioner