§ 5888. Determination of taxable income and income tax liability under the laws of the United States

For purposes of this chapter, a taxpayer's taxable income or income tax liability under the laws of the United States shall be determined by reference to the judicial decisions and administrative rulings of the United States.

(1) A determination by the United States which establishes the amount of a taxpayer's taxable income or income tax liability under the laws of the United States for any taxable year shall be binding on the taxpayer and the State in calculating the taxpayer's liability to Vermont under this chapter. As used in this section, "determination by the United States" means:

(A) A decision by the Tax Court of the United States or a judgment, decree, or other order by any United States court of competent jurisdiction which has become final;

(B) A closing agreement under Section 7121 of the Internal Revenue Code of 1986; or

(C) An agreement executed under Section 1313(a)(4) of the Internal Revenue Code of 1986.

(2) For any taxable year, the payment to the United States by any taxpayer of an aggregate amount of income tax, whether by withholding or otherwise, whether under a claim of deficiency, demand or otherwise, and whether under protest or otherwise, shall be prima facie evidence, for purposes of this chapter, that such aggregate amount, less any refunds received by the taxpayer from the United States with respect to his or her income tax payments for that year, constitutes the income tax liability of the taxpayer for that taxable year under the laws of the United States, and that the items of income, deductions, exemptions, and credits with respect to which the income tax liability was calculated are the items of income, deductions, exemptions, and credits of the taxpayer for that taxable year under the laws of the United States.

(3) For purposes of this section, the affidavit of any United States District Director of Internal Revenue that a taxpayer (A) has paid a specified aggregate amount of income tax; (B) has received a specified amount of refund with respect to his or her income tax payments; or (C) has paid any amount of tax calculated with respect to specified items of income, deductions, exemptions, or credits, shall be prima facie evidence of the truth of those matters set forth in the affidavit.

(4) Notwithstanding any other provision of law:

(A) Any adjustments made to basis or deductions taken under the laws of the United States in connection with the claiming of a federal tax credit shall also be made for the calculation of Vermont tax, whether or not such federal credit is available to the taxpayer in the determination of the amount of the taxpayer's Vermont tax.

(B) The amount of any Vermont net operating loss shall be available to a taxpayer as a carryforward in the 10 years following the loss year. (Added 1966, No. 61 (Sp. Sess.), § 1, eff. Jan. 1, 1966; amended 1971, No. 73, § 22, eff. April 16, 1971; 1983, No. 206 (Adj. Sess.), § 2, eff. April 26, 1984; 1985, No. 262 (Adj. Sess.), § 4, eff. June 4, 1986; 1991, No. 32, § 33, eff. May 18, 1991; 1993, No. 89, § 13; 2005, No. 207 (Adj. Sess.), § 17, eff. May 31, 2006.)