Virginia State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Virginia, with full citations and the original source on every page.
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I think a circuit court improperly assessed fines and costs against me for a traffic conviction -- can I appeal that to the Virginia Department of Taxation?
No -- the Department has no jurisdiction over court fines and costs, even though it sometimes collects them. A taxpayer convicted of a traffic infraction in circuit court tried to appeal the resulting…
I'm appealing a Virginia tax assessment and claiming I was a resident of another state, but I never actually filled out Virginia's domicile questionnaire -- what happens now?
The taxpayer gets one final chance to actually provide the information -- but simply claiming residency elsewhere, without responding to the Department's request for proof, doesn't work. Virginia lear…
My conference center's all-inclusive room-and-meal package got hit with use tax on food purchases and employee meals, my vendor's custom-table charge got taxed a second time, and the Department extended my audit period past three years -- which of these can I actually fight?
Mixed result across several issues -- the center lost on the substance of most items but won a real procedural fight over how far back (and forward) the audit could reach. A Virginia conference center…
My company sells a bundled smart-home system -- remote video, door locks, lights, controlled through our app and network -- along with our basic monitored alarm service. Is the whole bundled charge taxable as equipment, or exempt as a service?
A nontaxable service -- because customers were really paying for ongoing remote control and monitoring capability, not just to own the hardware. A security company's optional smart-home-style add-on s…
The Department's auditor removed offsetting credit memos from my sales tax audit sample without a signed sampling agreement -- does that make the sample inflated and invalid?
No -- removing the offsetting invoice/credit-memo pairs and leaving the remaining unmatched credits out of the sample followed the Department's established, previously-published sampling policy, and t…
What does Virginia Ruling of the Tax Commissioner P.D. 21-26 conclude about a dealer's failure to file a retail sales and use tax return?
The statutory assessment was upheld: the dealer was required to file a sales tax return for the period even though no tax may have been due, and the assessment stands as due and payable unless the dea…
Did a taxpayer who moved abroad in 2018 successfully change his domicile away from Virginia, entitling him to a refund of Virginia income tax withheld from a 2019 retirement distribution?
Yes -- the Tax Commissioner found the Taxpayer changed his domicile to Country A when he moved there in November 2018, and directed that his Form 763-S nonresident withholding refund claim be processe…
State Tax Ruling
No. In P.D. 20-193, Virginia's Tax Commissioner upheld the denial of a Qualified Equity and Subordinated Debt Investments Tax Credit application because it was filed after the April 1 deadline, reject…
State Tax Ruling
The Tax Commissioner upheld the county's BPOL tax assessments because the taxpayer, though it showed some software was developed and licensed, failed to prove how much of its gross receipts were attri…
What happens to a Virginia sales and use tax appeal if the taxpayer submits the missing documentation after filing it?
The Tax Commissioner closed the appeal because the taxpayer had by then supplied the documentation that was missing during the audit. The records were referred to field audit staff for review and any …
If Virginia returns my sales tax refund request because it was submitted on a CD, does the three-year filing deadline still count against me?
Granted in part: the Tax Commissioner found the Taxpayer's refund requests were timely filed in December 2015, even though the Department had returned them because they were submitted on a CD, and gav…
If a taxpayer appeals a sales/use tax audit by offering to prove its customers already paid consumer use tax, what happens to the appeal?
The Tax Commissioner closed the appeal and sent it back to the auditor, who agreed to review the taxpayer's evidence (submitted in Excel format) that its Virginia customers had paid consumer use tax o…
If a taxpayer timely files a Virginia amended return but waits years to send the Department the IRS's acceptance letter, is the refund still barred by the statute of limitations?
No. The Tax Commissioner ruled that because the taxpayer's amended Virginia return was filed in October 2016 -- well within the three-year limitations period for refund claims under § 58.1-1823 -- and…
What happens when a taxpayer supplies, on appeal, the audit documentation it could not produce during the audit itself?
Closed and referred back. The taxpayer's whole appeal turned on documentation it could not provide during the audit. Because it supplied that documentation on appeal, the Department referred it to the…
What did Virginia advise a town about BPOL authority, tax bases, appeals, out-of-state receipts, and receipt situs?
A county generally could not duplicate a town's BPOL tax without town permission. A locality could use gross receipts or Virginia taxable income but had to use one base for all business classes. Appea…
How did Virginia's 2009 Get Square VA tax amnesty waive penalties and half the interest, and who qualified?
These historical guidelines governed the October 7-December 5, 2009 Get Square VA program. For an eligible bill or delinquent return, paying all tax and half the accrued interest waived all penalties …
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These are official tax letter rulings and advisory opinions issued by Virginia's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.