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Old 09-21-2009, 08:01 AM
 
656 posts, read 1,272,408 times
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As far as I know, if a Virginia resident works in D.C he/she has to pay tax on that income, now D.C does not tax non-residents and is not a state, attempts to enact such as a tax have been struck down by the courts, my question is this

What case law or federal interpretation gives the state of Virginia a right to tax income being earned out of state, a person goes to work in D.C earns the income in D.C , so where does Virginia come into play. Maryland has a tax , so they have a double taxation agreement.


What gives the state of Virginia a right to collect income earned out of state.

People residing in Virginia pay taxes other than income, and not all Virginia's may pay income tax, so I am not sure about the right of Virginia to collect income taxes on simple residence. Now its a bit strange, other states do the same , but the district is not a state, does the commerce clause make an exception,

I know people living in Tennessee and working in Mississippi will have to pay its income tax though since Tn has not tax not the other way around although commuter from TN would pay MS tax despite lack of TN state income tax if they work there.

What gives the states of Virginia and Maryland the constitutional right to do this, does west Virginia do this too, how about Pennsylvania. If one could theoretically live in a no income tax state and work in DC, no tax, it seems MD and VA are taking advantage of the coffers.
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Old 09-21-2009, 09:31 AM
 
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States have reciprocity agreements with other states that residents of these states will be taxed on their earnings in the state where they maintain their home.
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Old 09-21-2009, 04:24 PM
 
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Originally Posted by lchoro View Post
States have reciprocity agreements with other states that residents of these states will be taxed on their earnings in the state where they maintain their home.
Is that true, what about states that don't levy an income tax then, however what gives them them the right to do so, since its interstate commerce.
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Old 09-21-2009, 05:28 PM
 
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If your state doesn't have a reciprocal agreement with another state, you have to also file a non-resident state income tax return for that state in which you earned the income. TurboTax says that you still owe a state income tax if only one of the two states, in which you reside or work, levies a tax on earned income.

How do I File a Nonresident State Tax Return? - TurboTax® Support
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Old 09-26-2009, 05:16 AM
 
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What gives the states of Virginia and Maryland the constitutional right to do this,

You got it all wrong. You see, they're the government and can do whatever they want to you and there's nothing you can do about it. They need no court precedent to steal your money from you. If you think they do, try not paying your taxes on out of state income based upon a lack of precedent or constitutionality, let me know how that works out for you.

If they want to tax your out of state income at 80%, they can. If you refuse to pay or fail to obey their rules for whatever reason they'll kidnap you from your home and lock you up in a cage. If you resist that, they'll kill you. They've got guns you know And they're not afraid to use them!!

Last edited by Pigeonracer; 09-26-2009 at 05:18 AM.. Reason: For brevity.
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Old 09-26-2009, 03:02 PM
 
656 posts, read 1,272,408 times
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Originally Posted by Pigeonracer View Post
You got it all wrong. You see, they're the government and can do whatever they want to you and there's nothing you can do about it. They need no court precedent to steal your money from you. If you think they do, try not paying your taxes on out of state income based upon a lack of precedent or constitutionality, let me know how that works out for you.

If they want to tax your out of state income at 80%, they can. If you refuse to pay or fail to obey their rules for whatever reason they'll kidnap you from your home and lock you up in a cage. If you resist that, they'll kill you. They've got guns you know And they're not afraid to use them!!
I am aware, I hope you see the hypocrisy in this, do you have any answers though, speaking of taxing outside income, employers sometimes withhold money for that resident's state or for the state that the person is working for, in the case of double taxation, a person working in MD from VA, the employer would not withhold MD taxes, because when the person pays VA taxes its a credit, or paying MD taxes, but VA credits those particular taxes.
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Old 09-27-2009, 07:58 PM
 
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The drawback of living in a state without an income tax is that other taxes are much higher. The real estate tax rate is about 5 times higher in Tennessee than in Virginia. Their sales tax is 7 percent versus 4.5 percent in Virginia.
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Old 10-01-2009, 10:46 PM
 
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Originally Posted by lchoro View Post
The drawback of living in a state without an income tax is that other taxes are much higher. The real estate tax rate is about 5 times higher in Tennessee than in Virginia. Their sales tax is 7 percent versus 4.5 percent in Virginia.
That can be true, however Virginia property taxes are much higher than TN per capita, as far as rate is concerned they are about equal not 5 times higher, yes TN has a high sales tax.
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