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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Was a multistate commercial printer a manufacturer for Virginia local BPOL and business-property taxes?
Yes. Virginia considered the printer's facilities as one business rather than isolating the county's direct-mail location. Its printing transformed raw materials and its manufacturing operations were …
For BPOL tax, could a gas producer remove value added after gas entered transit at the county wellhead?
Yes. Because the gas was placed in transit at the county wellhead for sale elsewhere, BPOL gross receipts had to reflect fair market value at that point, not later value added before sale. Sale procee…
Were management fees between an S corporation and tiered family partnerships exempt BPOL affiliated-group receipts?
No for fees involving the first- and second-tier partnerships. The commonly owned S corporations met the brother-sister affiliated-group test, but the S corporation and first-tier partnerships failed …
Did certification as a pollution-control facility exempt a Virginia landfill business from city BPOL tax?
No. Virginia held that Va. Code § 58.1-3660 exempts certified pollution-control real and tangible personal property from local property tax; it does not exempt the privilege of operating a business fr…
Were a manufacturer's wholesale sales of affiliate-made chemicals a separate BPOL-taxable business, and could out-of-state receipts be deducted?
Yes. Sales of chemicals made by affiliates outside the city were a significant wholesale activity, not merely ancillary to manufacturing at the city plant, so a wholesale BPOL license was required. Re…
Did a military logistics contractor have a definite place of business at the city supply center for BPOL tax?
Yes, on the stated facts. Hundreds of employees and an on-site supervisor continuously worked in designated, segregated military space on tasks lasting at least 30 days; the contractor also used a loc…
Were furnished corporate apartments a county definite place of business with rental receipts sitused there for BPOL tax?
Yes. The provider leased apartments from owners and sublet them directly to client occupants under its own agreements. Furnishings, utilities, housekeeping, and other amenities did not change the esse…
Could a county impose BPOL tax on a foreign parent because its wholly owned service subsidiary operated in the county?
No. The subsidiary was a separate legal business operating at the county location, while the foreign parent had no facility, employees, property, or business activity there. Virginia ordered the count…
Did year-round employees supporting a customer at its county facility create a BPOL definite place of business?
Likely yes. The provider owned no local property and had no phone, advertising, mail, or administration at the client site, but its employees performed around-the-clock services there 365 days a year.…
Which healthcare affiliates had Virginia BPOL filing duties, and where were their service receipts sitused?
Each Virginia affiliate with office space, property, records, phone, mail, and public business presence had a definite place of business and would file if its locality taxed the activity. Affiliates w…
Could Virginia Taxation hear a business's direct BPOL and BTPP appeal when no complete final local appeal covered the disputed years?
Not yet. The business's 2011 correspondence did not identify specific BTPP years and amounts and no final county determination existed, while the 2010 BPOL protest remained locally pending and the cou…
Could a city split a multioffice service business's BPOL receipts 50/50 with a county when the taxpayer's records did not verify situs?
Not on the record presented. Virginia remanded the case because neither the business nor the city conclusively established where the service receipts belonged, the corporate income-tax sales factor wa…
Could a vertically integrated manufacturer obtain a Virginia BPOL exemption and a prorated refund after transferring its local operations?
Potentially, but more proof was required. Virginia held that the appeal was timely and that a vertically integrated business can qualify as one manufacturing business when its manufacturing is substan…
Could an interior-design company receive separate BPOL classifications for design services and its substantial furniture sales?
Potentially. Virginia found the city could classify the company as a business service based on how it held itself out, but its furniture sales appeared substantial enough to be a separate retail busin…
Did a federal-contract joint venture create a Virginia definite place of business merely by using a member's office address for nine months?
No. Virginia advised that merely sharing a member's Virginia office address did not create a definite place of business when the joint venture had no employees, property, phone, records, signage, adve…
Did an independent truck driver owe city BPOL tax when he lived there but leased and drove his tractor for an out-of-state motor carrier?
Yes, he conducted a licensable business, and because he had no other definite place of business, Virginia treated his city residence as the business situs. The motor carrier's exemption did not automa…
For Virginia BPOL purposes, did converting a sole proprietorship into a single-member LLC create a new business owing a full-year license fee?
Yes. Virginia treated the single-member LLC as a legal entity different from the owner's former sole proprietorship, so it was a new business for 2009 and the city properly charged the license fee. Th…
Could a multistate service company using payroll apportionment claim Virginia's BPOL deduction for gross receipts from business conducted in other states?
Potentially. The company had to situs total receipts to the local definite place of business first, using payroll apportionment because specific situs was impractical. It could then deduct an apportio…
Could a Virginia county impose BPOL tax on real-property lessors operating inside a town that could not itself tax those lessors?
Only with the town's permission. The county's pre-1974 tax history allowed it to tax real-property lessors generally, while the town's history did not. But a county BPOL tax ordinarily does not apply …
Could a Virginia county impose BPOL tax on real-property lessors operating inside a town that could not itself tax those lessors?
Only with the town's permission. The county's pre-1974 tax history allowed it to tax real-property lessors generally, while the town's history did not. But a county BPOL tax ordinarily does not apply …
Could a Virginia county tax all BPOL gross receipts of a tree-service and construction company whose county office performed only administration?
No. The company had definite places of business in both the city and county, but its county office performed only ancillary recordkeeping and administration. Services were directed and controlled from…
Did a government contractor's staffed trailer on a military base create a definite place of business and situs for BPOL service receipts?
Yes. Although the trailer had no public sign, mail, solicitation, or advertised phone number, the contractor maintained a continuous presence, furniture, computers, a phone, meetings, and administrati…
Did a government contractor's staffed trailer on a military base create a definite place of business and situs for BPOL service receipts?
Yes. Although the trailer had no public sign, mail, solicitation, or advertised phone number, the contractor maintained a continuous presence, furniture, computers, a phone, meetings, and administrati…
Did a contractor's vehicle-storage facility create a city definite place of business, and where were its receipts and trucks taxed?
The city storage facility was not a definite place of business because storage, daily employee meetings, assignments, and truck loading did not establish the required regular and continuous business a…
Could one Virginia city tax all 2006 receipts from a call center, fulfillment center, and IT center located in three localities?
No. Virginia found the fulfillment and IT centers were definite places of business separate from the call center. One city could tax only receipts attributable to services performed or otherwise situs…
Were a fulfillment center and IT center separate definite places of business, and how should 2005 BPOL receipts be assigned among them and a call center?
Yes. Virginia found the fulfillment and IT centers were definite places of business in their own localities, so not all Virginia receipts automatically belonged to the call-center city. But the record…
How could a multistate business prove Virginia's BPOL deduction for out-of-state receipts when payroll apportionment was used to situs gross receipts?
The business first had to use payroll apportionment to assign receipts to the county, then show some evidence that employees at that Virginia office earned or helped earn receipts from customers in st…
What evidence supported Virginia's BPOL deduction for out-of-state receipts when payroll apportionment was used?
The taxpayer first had to apportion gross receipts to the city, then show evidence that employees at that office earned or helped earn receipts from customers in states where it filed an income tax re…
Did one executive's Virginia home office create a definite place of business and BPOL-taxable receipts for a foreign online-game company?
Apparently not on the facts presented. Although an executive continuously worked from a Virginia home office, the foreign online-game company did not hold itself out as operating there, and most busin…
Could a Virginia contractor exclude receipts earned in other localities from the BPOL tax base of the county containing its principal office?
Only with supporting evidence. The contractor had not proved a continuous physical presence creating a definite place of business at its out-of-county worksites. It received 30 days on remand to docum…
Was payroll apportionment automatically required to split a cable provider's BPOL gross receipts between two local offices?
No. Virginia treated payroll apportionment as a last-resort method used only when it is impractical or impossible to attribute service receipts under the general definite-place-of-business rules. The …
Were unmanned cardlock fuel sales to commercial, institutional, and government fleets wholesale sales for Virginia BPOL tax?
Yes. The cardlock sites served institutional, governmental, and commercial customers rather than the public, supported oversized fleet vehicles and high-speed fueling, and used wholesale-style market …
Were unmanned cardlock petroleum terminals definite places of business for Virginia local BPOL tax?
Yes. The terminals lacked offices, mail, records, and continuously stationed employees, but the operator owned or leased each site, installed and ran the automated pumps, maintained and inspected them…
Could a business use 2008 receipts for its final BPOL year instead of the prior year's base receipts merely by saying it had ceased operations?
Not merely from the assertion. Virginia held that the city correctly computed 2008 BPOL from 2007 base-year gross receipts; a final-year proration also used the base year. But permanent cessation was …
Could a law firm remove receipts generated by lawyers who left at year-end from the next year's local BPOL base?
No. The city ordinance computed a previously licensed business's current BPOL tax from receipts earned in the base year, and Virginia defined the preceding calendar year as the base year unless the or…
How did Virginia BPOL apply to a beverage maker's plants, warehouses, cross-docks, and vending-machine sales?
Qualifying manufacturing and wholesale sales at the plants were exempt. Warehousing and cross-docking appeared ancillary to manufacturing, so wholesale product receipts were also exempt at those facil…
Was a producer of three-dimensional holograms a manufacturer for Virginia local BPOL and machinery-and-tools tax purposes?
Yes. The laser and heat process transformed two-dimensional images and raw film into substantially different holograms, and the hobby kits were also new products made from combined materials. Wholesal…
How did Virginia's 2010 bulletin apply the new military-spouse residency law to income and local property taxes?
The historical bulletin required the spouse and service member to share the same non-Virginia domicile; a spouse could not simply elect the member's state. Qualifying service income, including some lo…
How should a global telemarketing company apportion direct-response receipts to a Virginia call center for BPOL tax?
Virginia upheld the general payroll-apportionment formula: worldwide receipts multiplied by Virginia call-center payroll divided by total payroll. The taxpayer could not first subtract all receipts fr…
Could a Virginia county impose BPOL tax on a Section 501(c)(6) nonprofit's dispute-resolution receipts that were not reported as unrelated business taxable income?
Not on the record presented. The county's ordinance exempted federally tax-exempt receipts of Section 501(c)(6) organizations, except receipts subject to federal tax. Because the county did not show t…
Should a furniture store with separately billed design work and significant custom framing be classified only as a BPOL retailer?
Not necessarily. Furniture and furnishing sales were retail, and free design plus third-party labor tied to those sales were ancillary. Separately billed design services under 1% of receipts were unli…
Did producing hand-painted and digitally printed decorative art and custom frames qualify as manufacturing for local Virginia taxes?
Yes. The hand-painted reproductions, industrial color-print process, and custom frame fabrication transformed paper, paint, ink, chemicals, wood, metal, and glass into substantially different products…
Were contracted college and military food-service programs BPOL retail businesses or professional and specialized occupations?
The contracted meal programs were professional and specialized occupations because the colleges or military were the customers and meals were part of a managed service. Direct sales to individual patr…
Did a four-corporation chain with the stated 80%-plus voting ownership qualify as a BPOL affiliated group, excluding intercompany employee-leasing receipts?
Yes. At least 80% of each subsidiary's voting interests was owned by one or more group members, and the common parent directly held at least 80% of two corporations. With no nonvoting stock, the state…
How should a multinational service firm apply BPOL payroll apportionment and the deduction for business conducted outside Virginia?
Virginia upheld the county's use of total worldwide receipts multiplied by county payroll over total payroll because the firm had definite places of business inside and outside Virginia. The firm coul…
Did a federal research-and-development subcontractor qualify for Virginia's reduced BPOL rate for principal or prime contractors?
No. Virginia upheld business-service classification at the ordinary rate because the contract designated the taxpayer as a subcontractor, not a principal or prime contractor, and Corporation A rather …
Could a securities broker exclude commissions passed to independent representatives from BPOL gross receipts?
Generally no. The real-estate-broker exclusion did not extend to a securities broker merely because its business model was similar. The full fee, including the representative's commission, was gross r…
Which worker-benefit payments could a staffing firm exclude from BPOL gross receipts when workers received Forms W-2 or 1099?
Qualifying benefits paid to workers treated as employees could be excluded, including W-2 employees and workers the firm treated as employees despite issuing Form 1099. Benefits paid to true independe…
Could a city impose its grandfathered telephone-company BPOL rate or service receipts tax on a cellular provider with a local retail kiosk?
Not on the cellular-service receipts. The city's ordinance used a narrow telephone-company definition that did not cover the PCS provider, and its service was directed and controlled from headquarters…
Where were a petroleum wholesaler's purchases sitused for BPOL when fuel was delivered from terminals outside its city office?
Purchases were sitused at the definite place from which goods were delivered to customers, not the city sales office or customer location. Fuel delivered from outside terminals could not be thrown bac…
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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.