Tax Type
Individual Income Tax
Description
Taxation of Nonresidents
Topic
Taxpayers
Date Issued
10-30-1998
October 30, 1998
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****
This will reply to your letter in which you request a ruling on the liability of (the "Taxpayer') for individual income tax for the 1992 through 1994 taxable years. I apologize for the delay in responding.
FACTS
The Taxpayer is domiciled in Pennsylvania. The Taxpayer works full-time in Virginia where he maintains an apartment. He leaves his Pennsylvania home early on Monday morning and travels to his job site in Virginia and arrives later that morning. He stays in Virginia through the week spending nights in his apartment. On Fridays, he drives to Pennsylvania directly from work to spend the weekends. Certain travel days, holidays, personal days and vacation days are not spent in Virginia.
The Taxpayer filed Pennsylvania income tax returns for 1992, 1993 and 1994 and paid income tax on all of his income. He did not file Virginia income tax returns for these taxable years.
The department determined that the Taxpayer was an actual resident of Virginia for the taxable years in question. The Taxpayer contends that he was not liable for Virginia income tax because he was a nonresident. As a nonresident, he would not be liable for Virginia income tax pursuant to the Reciprocal Personal Income Tax Agreement between Virginia and Pennsylvania.
RULING
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia § 58.1-302. The domiciliary residence of a person means that the permanent place of residence of a taxpayer and the place to which he intends to return even though he may actually reside elsewhere. An actual resident of Virginia means a person who, for an aggregate of more than 183 days of the taxable year, maintained his place of abode within Virginia. Additionally, a person who is not a domiciliary resident of Virginia, but who stays in Virginia for an aggregate of more than 183 days is also subject to Virginia taxation. Also, the department has determined that if a taxpayer maintained a place of abode in Virginia for more than 183 days in year, but was physically present in Virginia less than 183 days, the taxpayer is not a resident for Virginia tax purposes. See Public Document (P.D.) 93-22 (2/5/93), copy enclosed.
The determinative question is whether the Taxpayer is an actual resident of Virginia. The Taxpayer contends that a "day' for purposes of Code of Virginia § 58.1302 is a full twenty-four hour day. Under this scenario, the Taxpayer's Monday and Friday commuting days would not be counted towards residency. The taxpayer would be a nonresident since he was not physically present at least 183 days. The department's position is that the Monday and Friday commuting days should be counted towards residency. Under this scenario, the Taxpayer would be a Virginia resident since he would have been physically present in Virginia for more than 183 days.
Code of Virginia § 58.1-301 provides that terminology and references used in Title 58.1 of the Code of Virginia will have the same meaning as provided in the Internal Revenue Code (IRC) unless a different meaning is clearly required. While the term "day' is not defined in Title 58.1, it is defined by the IRC. Under IRC 7701(b), copy enclosed, a resident alien is considered to be a U.S. resident for income tax purposes if he (1) is a lawful permanent resident of the U.S. at any time during the calendar year; (2) meets the requirement of the "substantial presence' test or (3) makes the first-year election under IRC 7701(b)(4). Regulation §301.7701(b)-1(c), copy enclosed provides that a resident alien meets the substantial presence test if he or she has been present in the United States for at least 183 days during a three year period that includes the current year. For purposes of the substantial presence test, each day of physical presence is treated as a full day unless that person is present solely in traveling to a destination outside the United States. A person is physically present for a day even if present for a portion of the day.
The Taxpayer has cited Blacks Law Dictionary as authority that a "day' for purposes of Code of Virginia § 58.1-302 is twenty-four hours long. The Taxpayer states that the plain and common definition for "day' in Blacks Law Dictionary is "a period of time consisting of twenty-four hours and including the solar day and night.' Blacks Law Dictionary actually contains seven definitions for a "day'. Two definitions define day as a period shorter than twenty-four hours.(Blacks Law Dictionary also defines "Day as: 1) "That portion of time during which the sun is above the horizon, and, in addition, that part of the morning and evening during which there is sufficient light for the features of a man to be reasonablely discerned' and 2) "The period of time, within the limits of a natural day, set apart either by law or by common usage for the transaction of particular business or the performance of labor ... the word "day' may signify six, eight, ten, or any number of hours.') Thus, a "day' for Virginia Code purposes may be less than twenty-four hours.
In Ewing v. Ewing, the Virginia Court of Appeals held that "day' is defined as any continuous twenty-four hour period as it is used in Code of Virginia §20-108.2(G)(3)(c). The Taxpayer contends that if the General Assembly intended "day' to mean any continuous twenty-four hour period for purposes of Code of Virginia §20-108.2(G)(3)(c), a child support statute, then they must have intended day to have the same definition for purposes of Code of Virginia § 58.1-302.
Code of Virginia §20-108.2 provides guidelines for the determination of child support awards. Subsection 3 of paragraph of the Code section establishes rules for child support contribution by a non-custodial parent when the non-custodial parent has physical custody of a child for more than 110 days of the year. The Court of Appeals held that ... for the purposes of applying the provisions of Code §20-108.2(G)(3)(c), a day should be defined as any continuous twenty-four hour period. (Emphasis Added.) The Taxpayer contends that if "day' means a twenty four hour day for the purposes of Code of Virginia §20-108.2(G)(3)(c), then it must have the same meaning for Code of Virginia § 58.1-302. Clearly, the Court of Appeals limited the twenty-four hour day definition specifically to that narrow code section which addresses child support. It did not broadly extend the twenty-four hour definition of "day' to apply throughout the Code. Thus, the Ewing case is inapplicable to Virginia tax law.
Therefore, for purposes of Code of Virginia § 58.1-302, a "day' is any portion of a day in which a taxpayer is physically present except for a part of a day during which an individual is present solely while in transit to a destination outside Virginia. In the instant case, a Monday would be counted as a "day' for the purposes of Virginia's residency requirement because the Taxpayer was physically present in Virginia on each such day and he was not in transit to destination outside of Virginia. On Fridays, the Taxpayer would travel to an outside destination, his home in Pennsylvania. However, the Taxpayer was not present in Virginia for the sole purpose of traveling to Pennsylvania. He would work on Fridays. Thus, each such Friday was also a "day' for purposes of Virginia's residency requirement. The Taxpayer was a resident of Virginia for the taxable years in question and he is liable for filing a resident Virginia income tax return and paying Virginia tax.
Accordingly, the Taxpayer is responsible for filing Virginia tax returns for the 1992, 1993, 1994 and all subsequent tax years unless the Taxpayer's situation has changed. Please send the returns to *****, Office of Compliance, Virginia Department of Taxation, P.O. Box 6846, Richmond, Virginia 23230 within 30 days to prevent the accrual of additional interest. If you have any questions about this determination, you may contact *****, Office of Tax Policy, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****
This will reply to your letter in which you request a ruling on the liability of (the "Taxpayer') for individual income tax for the 1992 through 1994 taxable years. I apologize for the delay in responding.
FACTS
The Taxpayer is domiciled in Pennsylvania. The Taxpayer works full-time in Virginia where he maintains an apartment. He leaves his Pennsylvania home early on Monday morning and travels to his job site in Virginia and arrives later that morning. He stays in Virginia through the week spending nights in his apartment. On Fridays, he drives to Pennsylvania directly from work to spend the weekends. Certain travel days, holidays, personal days and vacation days are not spent in Virginia.
The Taxpayer filed Pennsylvania income tax returns for 1992, 1993 and 1994 and paid income tax on all of his income. He did not file Virginia income tax returns for these taxable years.
The department determined that the Taxpayer was an actual resident of Virginia for the taxable years in question. The Taxpayer contends that he was not liable for Virginia income tax because he was a nonresident. As a nonresident, he would not be liable for Virginia income tax pursuant to the Reciprocal Personal Income Tax Agreement between Virginia and Pennsylvania.
RULING
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia § 58.1-302. The domiciliary residence of a person means that the permanent place of residence of a taxpayer and the place to which he intends to return even though he may actually reside elsewhere. An actual resident of Virginia means a person who, for an aggregate of more than 183 days of the taxable year, maintained his place of abode within Virginia. Additionally, a person who is not a domiciliary resident of Virginia, but who stays in Virginia for an aggregate of more than 183 days is also subject to Virginia taxation. Also, the department has determined that if a taxpayer maintained a place of abode in Virginia for more than 183 days in year, but was physically present in Virginia less than 183 days, the taxpayer is not a resident for Virginia tax purposes. See Public Document (P.D.) 93-22 (2/5/93), copy enclosed.
The determinative question is whether the Taxpayer is an actual resident of Virginia. The Taxpayer contends that a "day' for purposes of Code of Virginia § 58.1302 is a full twenty-four hour day. Under this scenario, the Taxpayer's Monday and Friday commuting days would not be counted towards residency. The taxpayer would be a nonresident since he was not physically present at least 183 days. The department's position is that the Monday and Friday commuting days should be counted towards residency. Under this scenario, the Taxpayer would be a Virginia resident since he would have been physically present in Virginia for more than 183 days.
Code of Virginia § 58.1-301 provides that terminology and references used in Title 58.1 of the Code of Virginia will have the same meaning as provided in the Internal Revenue Code (IRC) unless a different meaning is clearly required. While the term "day' is not defined in Title 58.1, it is defined by the IRC. Under IRC 7701(b), copy enclosed, a resident alien is considered to be a U.S. resident for income tax purposes if he (1) is a lawful permanent resident of the U.S. at any time during the calendar year; (2) meets the requirement of the "substantial presence' test or (3) makes the first-year election under IRC 7701(b)(4). Regulation §301.7701(b)-1(c), copy enclosed provides that a resident alien meets the substantial presence test if he or she has been present in the United States for at least 183 days during a three year period that includes the current year. For purposes of the substantial presence test, each day of physical presence is treated as a full day unless that person is present solely in traveling to a destination outside the United States. A person is physically present for a day even if present for a portion of the day.
The Taxpayer has cited Blacks Law Dictionary as authority that a "day' for purposes of Code of Virginia § 58.1-302 is twenty-four hours long. The Taxpayer states that the plain and common definition for "day' in Blacks Law Dictionary is "a period of time consisting of twenty-four hours and including the solar day and night.' Blacks Law Dictionary actually contains seven definitions for a "day'. Two definitions define day as a period shorter than twenty-four hours.(Blacks Law Dictionary also defines "Day as: 1) "That portion of time during which the sun is above the horizon, and, in addition, that part of the morning and evening during which there is sufficient light for the features of a man to be reasonablely discerned' and 2) "The period of time, within the limits of a natural day, set apart either by law or by common usage for the transaction of particular business or the performance of labor ... the word "day' may signify six, eight, ten, or any number of hours.') Thus, a "day' for Virginia Code purposes may be less than twenty-four hours.
In Ewing v. Ewing, the Virginia Court of Appeals held that "day' is defined as any continuous twenty-four hour period as it is used in Code of Virginia §20-108.2(G)(3)(c). The Taxpayer contends that if the General Assembly intended "day' to mean any continuous twenty-four hour period for purposes of Code of Virginia §20-108.2(G)(3)(c), a child support statute, then they must have intended day to have the same definition for purposes of Code of Virginia § 58.1-302.
Code of Virginia §20-108.2 provides guidelines for the determination of child support awards. Subsection 3 of paragraph of the Code section establishes rules for child support contribution by a non-custodial parent when the non-custodial parent has physical custody of a child for more than 110 days of the year. The Court of Appeals held that ... for the purposes of applying the provisions of Code §20-108.2(G)(3)(c), a day should be defined as any continuous twenty-four hour period. (Emphasis Added.) The Taxpayer contends that if "day' means a twenty four hour day for the purposes of Code of Virginia §20-108.2(G)(3)(c), then it must have the same meaning for Code of Virginia § 58.1-302. Clearly, the Court of Appeals limited the twenty-four hour day definition specifically to that narrow code section which addresses child support. It did not broadly extend the twenty-four hour definition of "day' to apply throughout the Code. Thus, the Ewing case is inapplicable to Virginia tax law.
Therefore, for purposes of Code of Virginia § 58.1-302, a "day' is any portion of a day in which a taxpayer is physically present except for a part of a day during which an individual is present solely while in transit to a destination outside Virginia. In the instant case, a Monday would be counted as a "day' for the purposes of Virginia's residency requirement because the Taxpayer was physically present in Virginia on each such day and he was not in transit to destination outside of Virginia. On Fridays, the Taxpayer would travel to an outside destination, his home in Pennsylvania. However, the Taxpayer was not present in Virginia for the sole purpose of traveling to Pennsylvania. He would work on Fridays. Thus, each such Friday was also a "day' for purposes of Virginia's residency requirement. The Taxpayer was a resident of Virginia for the taxable years in question and he is liable for filing a resident Virginia income tax return and paying Virginia tax.
Accordingly, the Taxpayer is responsible for filing Virginia tax returns for the 1992, 1993, 1994 and all subsequent tax years unless the Taxpayer's situation has changed. Please send the returns to *****, Office of Compliance, Virginia Department of Taxation, P.O. Box 6846, Richmond, Virginia 23230 within 30 days to prevent the accrual of additional interest. If you have any questions about this determination, you may contact *****, Office of Tax Policy, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
Rulings of the Tax Commissioner