Chap. 399.—An ACT to amend and re-enact Sections 23, 39 and 40 of the Tax
Code of Virginia, as heretofore amended, in relation to income taxes. [3 2:2]

Approved March 31, 1944

Be it enacted by the General Assembly of Virginia:

1. That sections twenty-three, thirty-nine and forty of the Tax
Code of Virginia, as heretofore amended, be amended and re-enacted so
as to read as follows:

Section 23. Definitions generally —For the purpose of this chapter
and unless otherwise required by the context:

The word “taxpayer” includes any person, corporation, partnership.
trust or estate subject to a tax imposed by this chapter.

The word “corporation” includes corporations, joint stock com-
panies, associations and all enterprises operated by trustees, the interest
in which is evidenced by shares of stock, whether with or without par.
face or nominal value.

The word “partnership” includes all co-partnerships, whether gen-
eral or special, and whether limited or unlimited ; it includes also all joint
enterprises.

The word “individual” means all natural persons, whether married
or unmarried, and also all trusts, estates and fiduciaries acting for natural
persons; it does not include corporations or partnerships acting for or in
their own behalf.

The words “taxable year” mean the calendar year or the fiscal
year ending during such calendar year upon the basis of which the net
income is computed under this chapter. The term “taxable year” in-
cludes, in the case of a return made for a fractional part of a year under
the provisions of this chapter, the period for which such return is made
The first taxable year, to be called the taxable year nineteen hundred
and twenty-seven, shall be the calendar year nineteen hundred and
twenty-seven or any fiscal year ending during the calendar year nine-
teen hundred and twenty-seven.

The words “fiscal year’? mean an accounting period of twelve months
ending on the last day of any month other than December.

The word “fiduciary” means a guardian, trustee, executor, adminis-
trator, committee, receiver or any other person, whether individual or
corporate, acting in any fiduciary capacity for any person, trust or estate.

The word “resident” applies only to natural persons and includes
for the purpose of determining liability to the taxes imposed by this
chapter upon the income of any taxable year, every person domiciled
in this State on the last day of the taxable year, and every other person
who, for more than six months of the taxable year, maintained his place
of abode within this State, whether domiciled in this State or not. But
any person who, on or before the last day of the taxable year, changes
his place of abode to a place without this State with the bona fide inten-
tion of continuing actually to abide permanently without this State. shall
be taxable as a resident for that portion of the taxable vear during
which he was a resident of this State and his personal exemption shall
be reduced to an amount which bears the same ratio to the full exemption
as the number of months during which he was a resident of this State
bears to twelve months. The fact that a person who has so changed
his place of abode, within six months from so doing, again abides within
this State, shall be prima facie evidence that he did not intend perma-
nently to have his place of abode without this State. Such person so
changing his place of abode and not intending permanently to continue
it without this State, and not having returned his income for taxation
as a resident of this State, for the purpose of having fis income listed
for taxation within this State, shall be deemed to have resided on the
day when such income should have been listed, at his last place of abode
within this State. The fact that a person whose place of abode during
the greater portion of such twelve months has been within this State.
does not claim or exercise the right to vote at public elections within this
State, shall not, of itself, constitute him a nonresident of this State
within the meaning of this chapter.

The word “dividend” means any distribution made by a corporation
out of its earnings or profits to its shareholders or members, whether
such distribution be made in cash, or in other property. other than
stock in the corporation. :

The word “include” when used in a definition contained in this
chapter, shall not be deemed to exclude other things otherwise within the
meaning of the term defined.

Section 39, Credit for taxes paid other States by resident individuals
of this State—Whenever a resident individual of this State has become
liable to ..ncome tax to another State, as a nonresident of such State.
upon his net income, or any part thereof, for the taxable year, derived
from sources without this State and subject to taxation under this chap-
ter, the amount of income tax payable by him under this chapter shall be
credited on his return with the income tax so paid by him to such other
State upon his producing to the proper assessing officer satisfactory
evidence of the facts and of such payment. The credit provided for
by this section shall not be granted to a taxpayer when the laws of
another State, under which the income in question is subject to tax
assessment, provide for a credit to such taxpayer substantially simular
to that granted by section forty of this chapter. This section shall also
apply to a former domiciliary or actual resident of another State who
removed to this State during the taxable year and was a resident of this
State on the last day of the taxable year but was compelled to pay the
State of his former domicile or actual residence a net income tax for
that part of the taxable year during which he was such domiciliary or
actual resident.

This section, as hereby amended, shall be in force for the taxable
year nineteen hundred and forty three, and for every taxable vear there-
after, until otherwise provided by law.

Section 40. Credit for taxes paid other States by nonresident in-
dividuals.—W henever a nonresident individual of this State has become
liable to income tax to the State where he resides upon his net income
for the taxable year, derived from sources within this State and subject
to taxation under this chapter, the amount of income tax pavable by him
under this chapter shall be credited with such proportion of the tax
so payable by him to the State where he resides as his income subject
to taxation under this chapter bears to his entire income upon which
the tax so payable to such other State was imposed; provided, that
such credit shall be allowed only if the laws of said State (1) grant a
substantially similar credit to residents of this State subject to income
tax under such laws or (2) impose a tax upon the personal incomes
of its residents derived from sources in this State and exempt from
taxation the personal incomes of residents of this State. No credit shall
be allowed against the amount of the tax on any income taxable under
this chapter which is exempt from taxation under the laws of such
other State.

A nonresident individual of this State who had no actual place
of abode in this State at any time throughout the taxable year is hereby
relieved of filing an income return to this State for that taxable year
if his only income from sources within this State was from salaries and
wages and such salaries and wages were subject to income taxation by
the State of his residence under a net income tax law substantially similar
in principle to this chapter and the laws of such State contain a pro-
vision substantially similar in effect to that contained in the next pre-
ceding paragraph of this section and applicable to residents of this State.

This section, as hereby amended, shall be in force for the taxable
year nineteen hundred and forty-three and for every taxable year there-
after until otherwise provided by law.