Tax Type
Employer Income Tax Withholding
Description
Withholding Exemption Certificates; Exemption Allowances
Topic
Withholding of Tax
Date Issued
03-26-1992
March 26, 1992
Re: Request for Ruling: Income Tax Withholding
Dear*****************
This will reply to your letter dated September 30, 1991 requesting permission to limit the Virginia income tax withholding to an amount that approximates the estimated Virginia income tax liability of the above-referenced taxpayer.
FACTS
The taxpayer is a high level executive of a major corporation with its headquarters in Virginia. The taxpayer has been and continues to be domiciled in New York. The taxpayer does not anticipate that he will be physically present in Virginia for more than 183 days and he does not intend to establish a Virginia domicile. The company has facilities throughout the world including major United States facilities in eleven states and overseas in six countries. The taxpayer's job requires him to spend a substantial number of days travelling all over the world.
The taxpayer will pay Virginia income tax as a nonresident for taxable year 1992. You seek permission to limit the Virginia income tax withholding to an amount that approximates the taxpayer's estimated Virginia income tax liability as a nonresident.
RULING
The department's long-standing policy, set forth in VR 630-6-470(A), (copy enclosed), has been that an employee is entitled to the number of exemptions for which he qualifies for federal income tax purposes, but that he may seek written permission from the Commissioner to take additional allowances where the amount withheld under the withholding tables will result in a substantial overpayment of his income.
Therefore, because you have demonstrated that limiting the number of Virginia withholding exemption allowances to the number of exemptions for which the taxpayer qualifies for federal income tax purposes, would result in a substantial overpayment, I will allow the taxpayer to take additional allowances such that total withholding for 1992 will approximate the estimated 1992 tax liability. However, the taxpayer should be advised that in the case of an underpayment of the withholding tax, an addition to tax may be due from the taxpayer.
Sincerely,
W. H. Forst
Tax Commissioner
TPD/5739E
Rulings of the Tax Commissioner