10-016 Code Vt. R. 10-060-016-X
Some question has arisen in regard to the taxability of dividends and undistributed income and gains enjoyed by nonresident shareholders of small business corporations, qualified as such under the laws of the United States. Such dividends, income and gains are, of course, included in full as Vermont income of resident shareholders under 32 V.S.A. § 5823(a).
For the avoidance of doubt, dividends, and undistributed income and gains of small business corporations are treated under 32 V.S.A. § 5823(b)(4) as income derived from a business, trade, occupation or profession of nonresident shareholders to the extent that the business, trade, occupation or profession is carried on within Vermont.
The purpose of this regulation is to clarify the intent of the legislature that the Vermont personal and corporate income taxes conform with the United States Internal Revenue Code, and that residents and nonresidents be treated on an equitable basis under the Vermont tax laws.
10-016 Code Vt. R. 10-060-016-X
Effective Date: November 1968