March 29, 2024
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will respond to your letter in which you seek correction of an assessment of individual income tax issued to ***** (the “Taxpayer”) for the taxable year ended December 31, 2020.
FACTS
The Taxpayer was a domiciliary resident of Virginia and an actual resident of Maryland during the 2020 taxable year. He filed both Virginia and Maryland resident income tax returns for that year. On his Virginia return, the Taxpayer claimed an out-of-state tax credit for payment of both the Maryland state income tax and local county income tax. Under review, the Department disallowed the credit and issued an assessment. The Taxpayer paid the assessment and appealed, contending he was eligible to claim the credit because the denial of the credit would result in double taxation in violation of the Commerce Clause of the United States Constitution.
While this appeal was pending, the Department adjusted the Taxpayer’s return to allow a credit for state income tax paid to Maryland. The Department, however, did not grant credit for the local income tax paid. This letter, therefore, will address only the Taxpayer’s contention that he should be allowed a credit for the local tax paid.
DETERMINATION
The Taxpayer previously filed an appeal requesting credit for local county tax paid to Maryland on his 2017 Virginia resident individual income tax return. In response, the Department issued Public Document (P.D.) 21-121 (9/7/21), holding that the denial of a credit for the local county tax paid to Maryland did not violate the Commerce Clause of the United States Constitution nor was it contrary to the Supreme Court’s decision in Comptroller of the Treasury v. Wynne, 575 U.S. 542 (2015).
The Taxpayer has not provided new evidence or cited any court decisions subsequent to Comptroller of the Treasury v. Wynne that would impact the issue in this case. Although I recognize the Taxpayer’s continued disagreement with the Department’s determination in P.D. 21-121, I find no basis for reversing it. Therefore, the Department’s denial of credit for the local income tax paid is upheld. If he has not already received it, the Taxpayer will receive a refund reflecting the adjustment that allowed credit for the Maryland state income tax paid.
The public document cited is available online at www.tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at (804) *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/4539.X