Tax Type
Bank Franchise Tax
Description
Out-of-state financial institutions; Credits
Topic
Basis of Tax
Credits
Date Issued
07-19-1991
July 19, 1991
Re: Request for Ruling: Bank Franchise Tax
Dear*********************
This will reply to your letter of July 9, 1991, in which you ask two questions relating to a law recently enacted by West Virginia.
First, Virginia does not have a law similar to West Virginia's that would impose a tax on out of state financial institutions. An out-of-state bank that has sufficient nexus with Virginia would be subject to Virginia income tax. However, an out-of-state bank that merely has customers who reside in Virginia or loans secured by property located in Virginia, without more, would generally have no tax liability in Virginia.
Second, the Virginia bank franchise tax law allows a credit for bank franchise taxes paid to Virginia localities, but there is no provision allowing a credit for franchise or other taxes paid to other states.
I hope this answers the questions you raised concerning the potential impact of West Virginia's laws on Virginia tax.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner