Section 10. Definitions

For the purpose of this chapter and unless otherwise required by the context:

"Commissioner" means the Tax Commissioner.

"Employee" includes an individual, whether a resident or nonresident of Virginia, who performs or performed any service in Virginia for wages, or a resident of Virginia who performs or performed any service outside Virginia for wages. The word "employee" also includes an officer, employee, or elected official of the United States, Virginia, or any other state or any territory, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing or an officer of a corporation.

"Employer" means the Commonwealth of Virginia, or any of its political subdivisions, the United States, or any agency or instrumentality of any one or more of the foregoing, or the person, whether a resident or a nonresident of Virginia, for whom an individual performs or performed any service as an employee, except that:

1. If the person, governmental unit, or agency thereof, for whom the individual performs or performed the service does not have control of the payment of the wages for such services, the term "employer" (except as used in the definition of "wages" herein) means the person having control of the payment of such wages. For example, where wages, such as certain types of pensions or retired pay, are paid by a trust and the person for whom the services were performed has no legal control over the payment of such wages, the trust is the "employer."

2. In the case of a person paying wages on behalf of a nonresident person not engaged in trade or business within Virginia or on behalf of any governmental unit or agency thereof not located within Virginia, the term "employer" (except as used in the definition of "wages" herein) means such person.

For Virginia purposes, whether the relationship of employer and employee exists is determined in accordance with the test set forth in U.S. Treasury Reg. Section 31.3401(c)-1.

"Miscellaneous payroll period" means a payroll period other than a daily, weekly, biweekly, semi-monthly, monthly, quarterly, semiannual, or annual payroll period.

"Payroll period" means a period for which a payment of wages is ordinarily made to the employee by his employer.

"Wages" means all remuneration for services performed by an employee for his employer, including the cash value of all remuneration paid in any medium other than cash. Wages paid in any form other than money are measured by the fair value of the goods, lodging, meals or other consideration given in payment for services. "Wages" does not include remuneration paid as follows:

1. As fees to a public official.

2. For agricultural labor where remuneration is paid to workers employed on the farm for services rendered on the farm in the production, harvesting, and transportation of agricultural products to market for the farmer-employer.

3. For domestic service in a private home, local college club, or local chapter of a college fraternity or sorority.

4. For service not in the course of the employer's trade or business performed in any calendar quarter by an employee, unless the cash remuneration paid for the service is $50 or more and the service is performed by an individual who is regularly employed by the employer to perform the service.

The term "service not in the course of the employer's trade or business" includes services that do not promote or advance the trade or business of the employer. As used in this section, the term does not include service not in the course of the employer's trade or business performed on a farm operated for profit or domestic service in a private home, local college club, or local chapter of a college fraternity or sorority. Remuneration paid for service performed for a corporation does not come within the exception.

An individual is "regularly employed by an employer during a calendar quarter" only if:

(i) The individual performs service not in the course of the employer's trade or business for such employer for some portion of the day on at least 24 days (whether or not consecutive) during such calendar quarter; or

(ii) The individual was regularly employed (as determined under subparagraph (i) above) by the employer in the performance of service not in the course of the employer's trade or business during the preceding calendar quarter.

5. For services performed by a duly ordained, commissioned, or licensed minister of a church in the exercise of the ministry or by a member of a religious order in the exercise of duties required by such order.

6. For services not in the course of the employer's trade or business, to the extent paid in any medium other than cash.

7. To, or on behalf of, an employee or his beneficiary from or to a trust described in IRC § 401(a) which is exempt from tax under IRC § 501(a) at the time of such payment unless such payment is made to an employee of the trust as remuneration for services rendered as such employee and not as a beneficiary of the trust. A qualified cash or deferred arrangement meeting the requirements of IRC § 401(k) is deemed to be a trust described in IRC § 401(a).

8. To, or on behalf of, an employee or his beneficiary under or to an annuity plan which, at the time of such payment, meets the requirements of IRC § 401(a)(3), (4), (5), and (6).

9. For acting in or service as a member of the crew of a (i) motion picture feature film, (ii) television series or commercial, or (iii) promotional film filmed totally or partially in Virginia by an individual or corporation which conducts business in Virginia for fewer than 90 days of the tax year and when such film series or commercial is processed, edited and marketed outside Virginia. Every such individual or corporation shall, immediately after the filming of such portion of the film, series or commercial filmed in Virginia, file with the Commissioner on forms furnished by the Department, a list of the names and social security account numbers of each actor or crew member who is a resident of Virginia and is compensated by such individual or corporation.

The exclusion from "wages" of the remuneration set forth in subdivisions 1 through 9 above does not exempt the recipient from income tax liability for such remuneration.

Historical Notes

Derived from VR630-6-460, eff. January 1, 1985.

Statutory Authority

§§ 58.1-203 and 58.1-460 of the Code of Virginia.