58.1-302 - Definitions.
§ 58.1-302. Definitions.
For the purpose of this chapter and unless otherwise required by the context:
"Affiliated" means two or more corporations subject to Virginia incometaxes whose relationship to each other is such that (i) one corporation ownsat least 80 percent of the voting stock of the other or others or (ii) atleast 80 percent of the voting stock of two or more corporations is owned bythe same interests.
"Compensation" means wages, salaries, commissions and any other form ofremuneration paid or accrued to employees for personal services.
"Corporation" includes associations, joint stock companies and insurancecompanies.
"Domicile" means the permanent place of residence of a taxpayer and theplace to which he intends to return even though he may actually resideelsewhere. In determining domicile, consideration may be given to theapplicant's expressed intent, conduct, and all attendant circumstancesincluding, but not limited to, financial independence, business pursuits,employment, income sources, residence for federal income tax purposes,marital status, residence of parents, spouse and children, if any, leasehold,sites of personal and real property owned by the applicant, motor vehicle andother personal property registration, residence for purposes of voting asproven by registration to vote, if any, and such other factors as mayreasonably be deemed necessary to determine the person's domicile.
"Foreign source income" means:
1. Interest, other than interest derived from sources within the UnitedStates;
2. Dividends, other than dividends derived from sources within the UnitedStates;
3. Rents, royalties, license, and technical fees from property located orservices performed without the United States or from any interest in suchproperty, including rents, royalties, or fees for the use of or the privilegeof using without the United States any patents, copyrights, secret processesand formulas, good will, trademarks, trade brands, franchises, and other likeproperties;
4. Gains, profits, or other income from the sale of intangible or realproperty located without the United States; and
5. The amount of an individual's share of net income attributable to aforeign source qualified business unit of an electing small businesscorporation (S corporation). For purposes of this subsection, qualifiedbusiness unit shall be defined by § 989 of the Internal Revenue Code, and thesource of such income shall be determined in accordance with §§ 861, 862 and987 of the Internal Revenue Code.
In determining the source of "foreign source income," the provisions of §§861, 862, and 863 of the Internal Revenue Code shall be applied except asspecifically provided in subsection 5 above.
"Income and deductions from Virginia sources" includes:
1. Items of income, gain, loss and deduction attributable to:
a. The ownership of any interest in real or tangible personal property inVirginia;
b. A business, trade, profession or occupation carried on in Virginia; or
c. Prizes paid by the Virginia Lottery Department, and gambling winnings fromwagers placed or paid at a location in Virginia.
2. Income from intangible personal property, including annuities, dividends,interest, royalties and gains from the disposition of intangible personalproperty to the extent that such income is from property employed by thetaxpayer in a business, trade, profession, or occupation carried on inVirginia.
"Income tax return preparer" means any person who prepares forcompensation, or who employs one or more persons to prepare for compensation,any return of tax imposed by this chapter or any claim for refund of tax. Forpurposes of the preceding sentence, the preparation for compensation of anyportion of a return or claim for refund shall be treated as if it were thepreparation of the return or claim for refund. A person shall not be an"income tax return preparer" merely because the person:
1. Furnishes typing, reproducing, or other mechanical assistance;
2. Prepares a return or claim for refund of the employer (or of an officer oremployee of the employer) by whom he is regularly and continuously employed;
3. Prepares as a fiduciary a return or claim for refund for any person; or
4. Prepares an application for correction of an erroneous assessment or aprotective claim for refund for a taxpayer in response to any assessmentpursuant to § 58.1-1812 issued to the taxpayer or in response to any waiverpursuant to § 58.1-101 or 58.1-220 after the commencement of an audit of thetaxpayer or another taxpayer if a determination in such audit of such othertaxpayer directly or indirectly affects the tax liability of such taxpayer.
"Individual" means all natural persons whether married or unmarried andfiduciaries acting for natural persons, but not fiduciaries acting for trustsor estates.
"Intangible expenses and costs" means:
1. Expenses, losses and costs for, related to, or in connection directly orindirectly with the direct or indirect acquisition, use, maintenance ormanagement, ownership, sale, exchange, lease, transfer, or any otherdisposition of intangible property to the extent such amounts are allowed asdeductions or costs in determining taxable income;
2. Losses related to or incurred in connection directly or indirectly withfactoring transactions or discounting transactions;
3. Royalty, patent, technical and copyright fees;
4. Licensing fees; and
5. Other similar expenses and costs.
"Intangible property" means patents, patent applications, trade names,trademarks, service marks, copyrights and similar types of intangible assets.
"Interest expenses and costs" means amounts directly or indirectly allowedas deductions under § 163 of the Internal Revenue Code for purposes ofdetermining taxable income under the Internal Revenue Code to the extent suchexpenses and costs are directly or indirectly for, related to, or inconnection with the direct or indirect acquisition, use, maintenance,management, ownership, sale, exchange, lease, transfer, or disposition ofintangible property.
"Nonresident estate or trust" means an estate or trust which is not aresident estate or trust.
"Related entity" means:
1. A stockholder who is an individual, or a member of the stockholder'sfamily enumerated in § 318 of the Internal Revenue Code, if the stockholderand the members of the stockholder's family own, directly, indirectly,beneficially or constructively, in the aggregate, at least 50 percent of thevalue of the taxpayer's outstanding stock;
2. A stockholder, or a stockholder's partnership, limited liability company,estate, trust or corporation, if the stockholder and the stockholder'spartnerships, limited liability companies, estates, trusts and corporationsown directly, indirectly, beneficially or constructively, in the aggregate,at least 50 percent of the value of the taxpayer's outstanding stock; or
3. A corporation, or a party related to the corporation in a manner thatwould require an attribution of stock from the corporation to the party orfrom the party to the corporation under the attribution rules of § 318 ofthe Internal Revenue Code, if the taxpayer owns, directly, indirectly,beneficially or constructively, at least 50 percent of the value of thecorporation's outstanding stock. The attribution rules of § 318 of theInternal Revenue Code shall apply for purposes of determining whether theownership requirements of this subdivision have been met.
"Related member" means a person that, with respect to the taxpayer duringall or any portion of the taxable year, is a related entity, a componentmember as defined in § 1563 (b) of the Internal Revenue Code, or is a personto or from whom there is attribution of stock ownership in accordance with §1563 (e) of the Internal Revenue Code.
"Resident" applies only to natural persons and includes, for the purpose ofdetermining liability for the taxes imposed by this chapter upon the incomeof any taxable year every person domiciled in Virginia at any time during thetaxable year and every other person who, for an aggregate of more than 183days of the taxable year, maintained his place of abode within Virginia,whether domiciled in Virginia or not. The word "resident" shall not includeany member of the United States Congress who is domiciled in another state.
"Resident estate or trust" means:
1. The estate of a decedent who at his death was domiciled in theCommonwealth;
2. A trust created by will of a decedent who at his death was domiciled inthe Commonwealth;
3. A trust created by or consisting of property of a person domiciled in theCommonwealth; or
4. A trust or estate which is being administered in the Commonwealth.
"Sales" means all gross receipts of the corporation not allocated under §58.1-407, except the sale or other disposition of intangible property shallinclude only the net gain realized from the transaction.
"State" means for purposes of Article 10 of this chapter any state of theUnited States, the District of Columbia, the Commonwealth of Puerto Rico, anyterritory or possession of the United States, and any foreign country.
"Trust" or "estate" means a trust or estate, or a fiduciary thereof,which is required to file a fiduciary income tax return under the laws of theUnited States.
"Virginia fiduciary adjustment" means the net amount of the applicablemodifications described in § 58.1-322 (including subsection E thereof if theestate or trust is a beneficiary of another estate or trust) which relate toitems of income, gain, loss or deduction of an estate or trust. The fiduciaryadjustment shall not include the modification in subsection D of § 58.1-322,except that the amount of state income taxes excluded from federal taxableincome shall be included. The fiduciary adjustment shall also include themodification in subsection D of § 58.1-322, regarding the deduction for thepurchase of a prepaid tuition contract or contribution to a savings trustaccount.
(Code 1950, §§ 58-151.02, 58-151.013, 58-151.023, 58-151.034, 58-151.081;1971, Ex. Sess., c. 171; 1972, cc. 310, 827; 1973, cc. 198, 345, 458; 1974,c. 682; 1975, c. 46; 1976, cc. 528, 694, 781; 1977, cc. 297, 612; 1978, cc.67, 158; 1979, cc. 226, 404, 596; 1981, cc. 402, 414; 1982, c. 633; 1983, cc.452, 472; 1984, cc. 153, 162, 636, 674, 675, 729; 1990, c. 294; 1992, c. 678;1995, c. 602; 2000, cc. 382, 400; 2004, Sp. Sess. I, c. 3; 2005, c. 48.)