Tax Type
Individual Income Tax
Partnerships
Description
Nonresident partners; Unified nonresident individual income tax return
Topic
Partnerships
Returns/Payments/Records
Date Issued
01-04-1988
January 4, 1988
Re: Request for Ruling/Individual Income Tax
Nonresident Partnership
Dear***************
This is in reply to your letter of November 12, 1987 in which you request a copy of the 1977 letter on behalf of your client, *********************** (Partnership), regarding the filing of a unified nonresident individual income tax return.
Section 630-4-391(C)(2) of the Virginia Taxation of Partnerships Regulations provides that the Tax Commissioner may grant permission to nonresident partnerships to file a statement of combined partnership income attributable to nonresident partners. This provision of the regulations relieves the nonresident partners of the responsibility of having to file nonresident individual income tax returns.
Pursuant to this regulatory authority, the department has developed "standard" requirements, which are imposed with very little deviation upon all partnerships which request permission to file such a return on behalf of their Virginia nonresident partners. These "standard" requirements were developed in order to minimize the administrative burden of both the partnership and the department and to ensure compliance with the laws of this Commonwealth. These same basic requirements are imposed upon all partnerships requesting permission to file a unified return in order that equal treatment is assured.
In order for the department to accept a unified nonresident individual income tax return and thus relieve the nonresident partners of the responsibility of having to file separate Virginia nonresident returns, the following conditions must be met:
1. A schedule must be provided containing the total income of the partnership and the amount attributable to Virginia under either the applicable state apportionment formula, as provided in Virginia Code §§58.1-408 through 58.1-421, or by using an approved alternative method.
2. The unified return must reflect only the income or loss attributable to Virginia nonresident partners who have no income from Virginia sources other than income attributable to the partnership.
3. All nonresident partners without other income from Virginia sources must elect to join in the filing of such a return and a statement to such effect will be included in the return
4. The return will include each nonresident partner's name, address, social security number and Virginia taxable income attributable to each nonresident partner.
5. The Virginia income tax will be computed at the rates specified under Virginia Code §58.1-320 on Partnership's income attributable to the nonresident partners without benefit of itemized deductions, standard deductions, personal exemptions or credit for income taxes paid to states of residence.
6. The return will contain a statement indicating the responsibility of each nonresident partner for his snare or the total tax and any statements made on his behalf. The statement will be signed by each nonresident partner.
7. A similar unified return will be filed and payment made for the declaration of estimated tax, if required.
If the above conditions are satisfied, Partnership may continue filing a unified nonresident individual income tax return on behalf of the nonresident partners. However, we reserve the right to withdraw or modify the foregoing authorization upon reasonable notice to you.
If the above is not acceptable, please note that each nonresident partner having taxable income for a taxable year must file a Virginia return, unless the individual meets the filing exceptions described in Virginia Code §58.1-321. Failure to file an individual nonresident return would subject the nonresident partner to penalty and interest, which could not be mitigated by the fact that a unified filing had been made unless the unified filing was in accordance with the conditions set forth above.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner