Tax Type
Individual Income Tax
Description
Nonresident boat captain
Topic
Persons Subject to Tax
Date Issued
09-09-1988
September 9, 1988
Re: Ruling Request
Individual Income Tax
Income from Virginia Sources
Dear****************
This is in reply to your letter dated July 27, 1988, in which you request a ruling regarding the applicability of the Virginia individual income tax to certain income earned by your client, as a nonresident of Virginia.
FACTS
During taxable year 1987, your client was a resident of the state of Louisiana. He was employed as a boat captain for a company with an office located in Virginia. Your client would travel to Virginia from Louisiana and board a vessel at a Virginia port. Your client remained on this vessel for his entire 30 day shift. During his 30 day shift, the vessel was engaged in towing and docking large ocean-going ships and barges and towing ships and barges to other locations along the coastline. Upon completion of his 30 day shift, your client left the vessel and returned immediately to Louisiana.
You have asked whether the above described activities would subject your client to the Virginia individual income tax as a nonresident.
RULING
The Virginia individual income tax is imposed (see the exceptions under Virginia Code §58.1-321, copy enclosed) upon all individuals based upon their Virginia taxable income. The Virginia taxable income of a nonresident of Virginia is defined under Virginia Code §58.1-325 as:
-
- 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. Emphasis added
"Income and deductions from Virginia sources" is defined under Virginia Code §58.1-302 to include income from "[a] business, trade, profession or occupation carried on in Virginia." Emphasis added
Under the above definition, the income earned by your client, attributable to the amount of time that he is aboard the vessel within the territorial limits of Virginia, is considered income from Virginia sources.
Your client should apportion his income, based upon the amount of time that he is aboard the vessel within the territorial limits of Virginia, to determine the amount of his pay that is attributable to Virginia sources. For example, if your client is paid by the day, he should compute the ratio of his work days spent within the territorial limits of Virginia to his total number of work days.
In the event that your client is liable for Virginia income tax as a nonresident and his employer is not required under 46 U. S. Code §11108 to withhold Virginia income tax, he may be required to pay Virginia estimated tax.
Enclosed are copies of the forms and instructions that you requested. If you have any further questions, please do not hesitate to contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner