93-194 | Virginia Tax

Tax Type

Individual Income Tax

Description

Out-of-state tax credit; Arkansas adjusted gross income vs. net taxable income

Topic

Credits

Date Issued

09-22-1993

September 22, 1993

Re: §58.1-1821 Application: Individual Income Tax

Dear***************

This will reply to your letter of September 8, 1993, in which you request a refund of additional tax paid to the department as the result of an adjustment.

********letter of September 2, 1993, addresses this issue in detail and I concur fully with her analysis. Further, your argument as to the clarity of the department's instructions for the credit for taxes paid to another state is not supported by the facts. The department's 1990 instructions specifically advised the taxpayer:

- Enter taxable income reported on another state's return. The amount to be entered is the taxable income on which the tax computation was based. Emphasis added

In your specific case, the Arkansas return contains a line clearly titled "Net Taxable Income," to which the Arkansas tax rates are applied to arrive at the tax due before credits. Yet, in completing your return the Arkansas "Adjusted Gross Income" line was incorrectly utilized, oven though this figure must be reduced by itemized deductions in order to arrive at "Net Taxable Income" and the ultimate Arkansas tax liability.

Based upon the foregoing, I find no basis for relief.

Sincerely,

W. H. Forst
Tax Commissioner

Rulings of the Tax Commissioner