Tax Type
Individual Income Tax
Description
Nonresident professional athlete
Topic
Persons Subject to Tax
Taxable Income
Date Issued
04-28-1989
April 28, 1989
Re: Ruling Request: Individual Income Tax Virginia Source Income
Dear*****************
This is in reply to your letter dated February 20, 1989, in which you request clarification of the department's October 31, 1988 ruling regarding the proper Virginia income tax liability of a professional athlete, who is a nonresident of Virginia.
As I stated in my October 31, 1988 letter:
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- Generally, a nonresident athlete must apportion his income to determine the amount of his pay that is attributable to Virginia sources. Such apportionment should be based upon factors which most equitably determine the athlete's portion of total income that is attributable to services performed in Virginia. Services performed in Virginia would include actual games played in Virginia, as well as the team meetings and practices held in Virginia. The athlete should compute the ratio of work days spent within Virginia to his total number of work days.
- Generally, a nonresident athlete must apportion his income to determine the amount of his pay that is attributable to Virginia sources. Such apportionment should be based upon factors which most equitably determine the athlete's portion of total income that is attributable to services performed in Virginia. Services performed in Virginia would include actual games played in Virginia, as well as the team meetings and practices held in Virginia. The athlete should compute the ratio of work days spent within Virginia to his total number of work days.
In determining the ratio of work days spent within Virginia to the total number of work days, the athlete should exclude the days in which sporting events occurred outside of Virginia from the numerator. In the case of a team which trains and practices in Virginia, but which does not play any regular season or exhibition games in the state, game days would be excluded from the numerator. The denominator would include the number of days in which the player performed services for his employer during the player's taxable year.
You also asked whether the purchase of a home in Virginia by a nonresident athlete is sufficient action to require that individual to file Virginia returns as an actual resident.
Actual residents are those who have their place of abode in Virginia for an aggregate of more than 183 days of the taxable year, even though their legal domicile is in another state or country. It is not necessary for an individual to purchase a home in Virginia to have a place of abode in Virginia. However, certainly if an individual purchases a home in Virginia and then resides in that home for more than 183 days of the taxable year, he is an actual resident.
The purchase of a home in Virginia by a nonresident, is one factor that is to be considered in making the determination of whether this individual is establishing his domicile in Virginia. However, it is not the sole factor to be considered. Attached are several prior determinations made by the department which set forth the various factors that the department considers when making the determination of domicile.
If you have any specific questions after reviewing the attached determinations, please contact the department's Technical Services Section, P.O. Box 6-L, Richmond, Virginia 23282.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner