Tax Type
Corporation Income Tax
Description
Interstate commuter
Topic
Allocation and Apportionment
Date Issued
02-27-1987
February 27, 1987
Re: §58.1-1821 Application; Corporation Income Tax
§58.1-412 Payroll Factor; Interstate commuter
Dear ***********************
This is in response to your letter dated August 28, 1986, in which you apply for correction of an assessment dated June 11, 1986, for the taxable years ended September 30, 1983, 1984, and 1985. You protest the audit adjustment to the apportionment factor which included the wages of one employee in the numerator of the payroll factor.
Facts
The taxpayer is a Virginia corporation with offices and operations in both Virginia and Kentucky. The employee, one of the principal officers of the corporation, is a Virginia resident who commutes daily to the corporation's Kentucky office. The employee's wages were reported to the Virginia Employment Commission on form VEC-20 because of the reciprocal agreement with Kentucky that permits Virginia residents commuting daily to Kentucky to have taxes withheld and paid to Virginia only.
Determination
Regulation VR 630-3-413 A.4. (copy enclosed) establishes a presumption that any wages reported on form VEC-20 are Virginia wages for purposes of the payroll factor. However, the evidence submitted is sufficient to rebut the presumption.
Accordingly, the audit will be revised to remove the employee's wages from the numerator of the payroll factor. You will shortly receive a revised audit report and an updated bill with accrued interest. The bill should be paid within 30 days to avoid additional interest.
Sincerely,
W.H. Forst
Tax Commissioner
Rulings of the Tax Commissioner