Tax Type
Individual Income Tax
Description
Taxation of nonresidents; Government contractors
Topic
Taxpayers' Remedies
Date Issued
06-11-1997
June 11. 1997
Re: Request for Ruling: Individual Income Tax
Dear*****************
This will reply to your letter of April 4, 1997, in which you request a ruling concerning whether certain nonresident employees are required to file Virginia individual income tax returns. I apologize for the delay in responding to your letter.
FACTS
You are a faculty member of ****************and the principal investigator on a research project located in another state. The project is funded by the federal government. Employees, who work and permanently reside in the other state and who have never lived in Virginia, were hired by********to conduct field research for the project. The employees receive their paychecks from . You request a ruling on whether these employees should pay individual income taxes to Virginia.
RULING
Virginia imposes an individual income tax on all residents and nonresidents with income from Virginia sources. Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia § 58.1-302, copy enclosed. A domiciliary resident is a person whose permanent place of residence is Virginia and the place to which he intends to return is Virginia even though he may actually reside elsewhere. An actual resident is a person who, for an aggregate of more than 183 days of the taxable year, maintained his place of abode within Virginia. These employees are neither domiciliary nor actual residents of Virginia based on the information provided.
Virginia source income, as defined in Code of Virginia § 58.1-302, includes wages for services performed in Virginia. The income received by these employees was not the result of services performed in Virginia. Consequently, these individuals would not be subject to Virginia income tax as nonresidents because this income does not meet the definition of Virginia source income.
I trust that your concerns have been addressed. If you have additional questions, please contact *********** at ******** .
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12421N
Rulings of the Tax Commissioner