Tax Type
Individual Income Tax
Description
Residency
Topic
Taxpayers
Date Issued
05-13-1999
May 13, 1999
Re: § 58.1-1821 Application: Individual Income Tax
Dear***
This will reply to your letter in which you protest the assessment on individual income tax and interest for the 1993 through 1995 taxable years. I apologize for the delay in responding.
FACTS
The Taxpayer is a resident of another state (State A) who works for a corporation located in Virginia. The Taxpayer's position requires extensive involvement with community organizations. Many of these organizations are located in Virginia. In addition, the Taxpayer performs work in State A.
The Taxpayer timely filed Virginia income tax returns for the 1993 through 1995 taxable years. He apportioned his income to Virginia based on the proportion of his employer's sales in Virginia to its total overall sales. Under audit, the department disallowed the apportionment method and assessed additional tax on the basis that all of the Taxpayer's wages were derived from Virginia sources.
The Taxpayer contends that all previous individuals which held his position with the corporation apportioned their income based on sales proportion. The Taxpayer also contends that substantial portions of his job are performed in State A and that his income should be allocated accordingly.
DETERMINATION
Code of Virginia § 58.1-325 (copy enclosed) provides that the taxable income of a nonresident individual shall be:
The Taxpayer has not provided adequate information regarding the amount of time he spent working in State A. The Taxpayer has provided some information regarding the amount of time that he works in State A and Virginia. Specifically, he provided copies of four months of his daytime schedule. This schedule does not specify in which state any of the Taxpayer's appointments take place.
The Taxpayer contends that the fairest way to apportion his income is based on the proportion of his employer's sales which are made in Virginia to the employer's total sales. There is no provision in Virginia law which allows nonresidents to apportion their income based on their employer's sales. Without a specific provision in Virginia law, the department has no statutory authority to allow nonresidents to apportion their income in such a manner.
Accordingly, the auditor's assessments are upheld. Please send the tax and interest listed on the enclosed schedule to *****, Office of Tax Policy, Virginia Department of Taxation, P.O. Box 1880, Richmond, VA 23218-1880 within 60 days to avoid the accrual of additional interest. If you have any questions about this determination, you may contact ***** at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12194B
Re: § 58.1-1821 Application: Individual Income Tax
Dear***
This will reply to your letter in which you protest the assessment on individual income tax and interest for the 1993 through 1995 taxable years. I apologize for the delay in responding.
FACTS
The Taxpayer is a resident of another state (State A) who works for a corporation located in Virginia. The Taxpayer's position requires extensive involvement with community organizations. Many of these organizations are located in Virginia. In addition, the Taxpayer performs work in State A.
The Taxpayer timely filed Virginia income tax returns for the 1993 through 1995 taxable years. He apportioned his income to Virginia based on the proportion of his employer's sales in Virginia to its total overall sales. Under audit, the department disallowed the apportionment method and assessed additional tax on the basis that all of the Taxpayer's wages were derived from Virginia sources.
The Taxpayer contends that all previous individuals which held his position with the corporation apportioned their income based on sales proportion. The Taxpayer also contends that substantial portions of his job are performed in State A and that his income should be allocated accordingly.
DETERMINATION
Code of Virginia § 58.1-325 (copy enclosed) provides that the taxable income of a nonresident individual shall be:
-
- an amount bearing the same proportion to his Virginia taxable income, computed as though he were a resident, as the net amount of his income, gain, loss and deductions from Virginia sources bears to the net amount of his income, gain, loss and deductions from all sources.
``Income and deductions from Virginia sources' is defined under Code of Virginia § 58.1-302 [copy enclosed] includes income from, ``[a] business, trade, profession or occupation carried on in Virginia.' (Emphasis added.)
- an amount bearing the same proportion to his Virginia taxable income, computed as though he were a resident, as the net amount of his income, gain, loss and deductions from Virginia sources bears to the net amount of his income, gain, loss and deductions from all sources.
The Taxpayer has not provided adequate information regarding the amount of time he spent working in State A. The Taxpayer has provided some information regarding the amount of time that he works in State A and Virginia. Specifically, he provided copies of four months of his daytime schedule. This schedule does not specify in which state any of the Taxpayer's appointments take place.
The Taxpayer contends that the fairest way to apportion his income is based on the proportion of his employer's sales which are made in Virginia to the employer's total sales. There is no provision in Virginia law which allows nonresidents to apportion their income based on their employer's sales. Without a specific provision in Virginia law, the department has no statutory authority to allow nonresidents to apportion their income in such a manner.
Accordingly, the auditor's assessments are upheld. Please send the tax and interest listed on the enclosed schedule to *****, Office of Tax Policy, Virginia Department of Taxation, P.O. Box 1880, Richmond, VA 23218-1880 within 60 days to avoid the accrual of additional interest. If you have any questions about this determination, you may contact ***** at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12194B
Rulings of the Tax Commissioner