                                 CODE OF VIRGINIA

(APPLICABLE FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY 1, 2007) DEFINITION
OF INCOME TAX (§ 58.1-332.2)

A. For purposes of the credits in &#xA7;&#xA7; 58.1-332 and 58.1-332.1, the term
&#8220;income tax&#8221; is a term of art that refers to a specific type of tax
levied on earned and unearned income and shall not include any other type of tax
merely because it may be measured by or referenced to gross or net income. An
income tax includes, but is not limited to, a tax imposed on all income of an
individual if a resident, or all income of an individual from the
jurisdiction&#8217;s sources if a nonresident; however, an income tax so imposed
may incorporate other provisions that grant exemptions, exclusions, deductions,
subtractions, credits, or other preferences for specific types of income,
expenses, individuals, or other criteria.

B. An income tax shall not include:

   1. A tax conditioned upon the exercise of any franchise, privilege, or
   business within the jurisdiction even though the tax is measured or based upon
   gross or net income derived therefrom, but such measure does not include
   income that the person exercising such franchise, privilege, or business may
   receive from other sources within the jurisdiction.

   2. License and occupation taxes, which are payable in respect to the privilege
   of engaging in or carrying on a particular business or vocation, even though
   the amount of tax payable by an individual may be measured by the amount of
   business which he transacts or his earnings therefrom, but such measure does
   not include income that the person engaging in or carrying on a particular
   business or vocation may receive from other sources within the jurisdiction.

C. The credits in &#xA7;&#xA7; 58.1-332 and 58.1-332.1 shall apply only when the
tax imposed in the other state or foreign country is substantially similar to
the tax imposed by Article 2 (&#xA7; 58.1-320 et seq.), as defined by this
section. The nomenclature used to describe the tax of the other jurisdiction
shall not be binding on Virginia for this purpose whether such nomenclature is
that of the other jurisdiction&#8217;s legislature or courts or the United
States Congress or courts.

HISTORY: 2012, c. 292.