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 saying that he neither worked nor lived in Virginia enough to overturn this nonfiler's 2012 assessment?
No. The taxpayer supplied no objective evidence despite two Department requests, so he did not prove abandonment of Virginia domicile or overcome the assessment's presumption of correctness. He receiv…
Could a Virginia resident defeat a 2012 assessment merely because the Department could not provide the employer's actual Form W-2?
No. Federal exchange data showed wages from a California employer and interest from a Virginia institution, and the taxpayer did not deny Virginia residency or receiving income. The assessment remaine…
Did a room lease and work aboard a vessel prove that this taxpayer abandoned Virginia domicile for 2012?
Not on the evidence provided. The taxpayer had a month-to-month room lease elsewhere and worked aboard a vessel most of each month, but renewed his Virginia driver's license in 2011 and ignored two re…
Did claiming residence in another state overturn this nonfiler's best-information Virginia assessment for 2012?
No. The taxpayer did not answer the Department's request for evidence showing abandonment of Virginia domicile, so the best-information assessment remained presumed correct. He received one final 30 d…
Did an asserted post-divorce move outside Virginia overturn this taxpayer's estimated 2012 resident income-tax assessment?
No. Virginia unemployment records covered all four quarters of 2012, the taxpayer retained Virginia DMV ties, and she supplied no evidence of living elsewhere that year. Because she did not complete t…
Did resale certificates obtained years after an audited sale prove that an IT provider's data-warehouse appliance sale was exempt?
No. The seller obtained the certificates more than three and nearly four years after the sale, so they were not accepted in good faith at the transaction. Virginia also could not validate the buyer as…
Did a company prove exempt fence-installation labor or agricultural use of a tractor and loader in its Virginia use-tax audit?
No. Installation labor was bundled with fencing materials and no corrected invoice supported a separate exempt amount. The company also did not prove that it owned the cattle or farm, purchased cattle…
Could a hotel purchaser value acquired business property at its resale proceeds instead of the city's percentage-of-original-cost method?
No. Virginia law directed most business tangible property to be valued using percentages of original cost, meaning the capitalized cost when first purchased new, not a later buyer's allocated purchase…
Could a merchant mariner exclude 2012 wages from Virginia tax without proving domicile in another state?
No. Working outside Virginia did not establish a new domicile. The husband retained a Virginia home with his wife, vehicles, a driver's license, and other ties, and provided no evidence of permanent d…
Could a taxpayer overturn Virginia's 2012 nonfiler assessment without evidence that he was not a Virginia resident?
No. Virginia could use IRS information and estimate the liability when no return was filed. Because the taxpayer produced no objective evidence that he was not a Virginia resident required to file for…
Was a husband a Virginia domiciliary resident in 2011 when the couple claimed he remained domiciled elsewhere?
Yes. The evidence tied the husband to the couple's Virginia home, while the couple provided no proof that he maintained or acquired domicile elsewhere. He had to file as a Virginia resident for 2011.
Could a taxpayer overturn a Virginia residency assessment without providing the domicile records the Department requested?
Not on the existing record. The assessment was presumed correct, and the taxpayer had not supplied the requested domicile evidence. Virginia allowed one final 45-day opportunity to provide documentati…
Could a taxpayer overturn a Virginia assessment merely by denying residence and Virginia-source income?
No. The taxpayer supplied no objective evidence supporting his denial of Virginia residence or Virginia-source income. Virginia allowed one final 30-day opportunity to provide domicile records or file…
Was an out-of-state driver's license alone enough to overturn a Virginia residency assessment?
No. An out-of-state driver's license was only one domicile factor, and the taxpayer did not answer Virginia's request for the rest of the evidence. Virginia allowed 30 days for adequate documentation …
Could a taxpayer prove foreign domicile for 2010 and 2011 without answering Virginia's document request?
Not on the existing record. The taxpayer had filed Virginia resident returns for 2005 and 2006 and supplied no documents supporting foreign domicile for 2010 and 2011. Virginia allowed 30 days for ade…
Could a taxpayer establish an out-of-state move during 2012 without providing the residency and filing records Virginia requested?
No, not on the existing record. The taxpayer said she lived in another state from August 2011 until November 2012 but provided no objective residency or filing evidence. Virginia allowed 30 days for d…
Could a copy of a Virginia return overturn an assessment when IRS records showed much higher federal adjusted gross income?
Not by itself. IRS data showed significantly higher federal adjusted gross income than the return copy, and the taxpayer did not supply the requested official federal transcript. Virginia allowed 30 d…
What happened when a medical-equipment seller supplied new documents after a Virginia sales-tax audit?
Virginia did not decide the claimed exemptions outright. Because the seller supplied additional records after the audit, the Department returned the case to audit staff for review and directed that th…
Could a road-service provider reduce an estimated sales-tax audit without records proving vendor tax and snow-clearing revenue?
No. Virginia could allow credit for verified sales tax paid to vendors on resale property, but the taxpayer supplied no proof. It also failed to document claimed snow-clearing revenue, so the estimate…
Could a taxpayer limit Virginia's 2012 assessment by saying he moved to Virginia in October without supplying residency records?
Not yet. The taxpayer conceded tax on a post-move IRA distribution but did not provide the other-state return or domicile records Virginia requested. The assessment remained presumptively correct, wit…
Did filing a federal return, with no IRS adjustment, satisfy a Virginia resident's separate duty to file a 2012 Virginia return?
No. Virginia filing duties arise under Virginia law, regardless of whether the IRS adjusts the federal return. Because the resident filed no Virginia return and offered no proof that the estimate was …
Did an unsupported claim of moving away overcome Virginia's estimated 2008 resident income-tax assessment?
No. The taxpayer provided no objective proof that he abandoned Virginia and acquired another domicile, while a Virginia driver's license was reissued during 2008. Virginia left the estimated assessmen…
Could Virginia estimate a restaurant's six-year sales-tax liability from one month of ABC records when the restaurant supplied no reliable sales records?
Yes. Because the restaurant did not provide reliable records and the other reported figures were doubtful, Virginia accepted January 2012 ABC data as the best information available. The restaurant rec…
Could Virginia review a city's boat valuation and overturn tax on another boat kept in the city for more than six months?
No on both issues. The Department is barred from reviewing valuation or valuation methods for local mobile property tax. It also upheld the second boat's 2015 assessment because the boat had remained …
Did a couple's unsupported claim of living in another state overcome Virginia's estimated 2012 resident assessment?
No. The couple offered no objective evidence that they abandoned Virginia and acquired another domicile, so they did not overcome the presumed-correct estimate. Virginia allowed 30 days to provide ade…
Could a taxpayer reverse Virginia's 2011 federal-income adjustment without providing the requested official IRS transcript?
Not on the existing record. Virginia begins with federal adjusted gross income, and the taxpayer provided no official IRS document showing that Virginia's matching adjustment was wrong. The assessment…
Did a lease and claimed out-of-state driver's license prove that a taxpayer had abandoned Virginia domicile for 2014?
No. The taxpayer showed some ties to another state, but Virginia records still showed a vehicle and driver's license here, and his federal return used a Virginia address. Because he bore the burden of…
Could a taxpayer avoid Virginia income-tax assessments by arguing that federal and state income-tax payment is voluntary?
No. Voluntary compliance does not make payment optional or prevent Virginia from assessing unpaid tax. The taxpayer also failed to document possible Maryland residency and reciprocity eligibility, so …
Could a nonfiler overturn a Virginia income-tax assessment merely by saying he lived in another state and then attended out-of-state graduate school?
No. The taxpayer did not answer Virginia's documentation request or prove that he had abandoned Virginia domicile and acquired another one. Because the assessment was presumed correct, Virginia upheld…
Could a taxpayer reverse Virginia's W-2-based corrections to federal adjusted gross income and withholding without objective contrary evidence?
No. The return apparently reported Virginia withholding as federal adjusted gross income. Virginia corrected income and withholding to the amounts on the taxpayer's W-2 and allowed a personal exemptio…
Did saying that a married couple paid income tax in Virginia and another state prove that they had changed domicile for 2012?
No. The couple did not provide objective evidence that they abandoned Virginia domicile and acquired another one, and paying tax in two states did not establish the change. Virginia kept the best-info…
Did claiming an out-of-state residence from 2011 through 2015 overturn a Virginia best-information assessment for 2012 without supporting records?
No. Although the taxpayer said he lived elsewhere from July 2011 until February 2015, he ignored Virginia's documentation request and supplied no substantial evidence about his domicile. The 2012 asse…
Did saying she moved out of Virginia in March 2013 prove that a nonfiler was not subject to Virginia income tax for 2012?
No. The claimed March 2013 move did not document the taxpayer's 2012 status, and she did not answer Virginia's records request. The assessment remained presumed correct, but Virginia allowed one final…
Could a nonfiler overturn a 2012 Virginia assessment merely by claiming residence in another state without supplying the requested records?
No. A bare claim of residence elsewhere did not prove abandonment of Virginia domicile, and the taxpayer ignored Virginia's documentation request. The best-information assessment remained presumed cor…
Could a telecommunications company reduce an Invoice Capture Tool asset gross-up when the supporting records for related contested assets had not been provided?
Not yet. The taxpayer did not dispute a specific item, and the related entity had not supplied the invoices and other records needed to remove assets feeding the Invoice Capture Tool calculation. Virg…
Did buying an out-of-state home and changing a driver's license and voter registration prove that a taxpayer abandoned Virginia domicile?
No. Although the taxpayer bought a home and changed a license, vehicle registration, and voter registration in another state, he retained a jointly owned Virginia home where he stayed, operated his bu…
Could a parent restore a subsidiary to its Virginia consolidated return without documenting the subsidiary's Virginia nexus and source income?
Not on the record provided. The auditor removed the subsidiary because it appeared not to have Virginia nexus, and the parent failed to supply requested records showing Virginia-source income or taxab…
Did a taxpayer prove he was not a Virginia resident in 2011 after ignoring requests for domicile records?
Not yet. The taxpayer said he had lived outside Virginia since 2004, but Virginia records showed later resident returns, an active Virginia driver's license, and financial documents sent to a Virginia…
Did three months of bank statements prove that an out-of-state domiciliary spent too few days in Virginia to be an actual resident in 2010?
No. The taxpayers claimed they spent only 35 days in Virginia, but supplied bank statements for only January through March rather than the full 2010 year. Virginia upheld the presumptively correct ass…
Could a nonfiler overturn a 2012 Virginia assessment by claiming domicile in another state but providing no objective evidence?
No. The taxpayer ignored two residency-document requests and provided no objective evidence that he had abandoned Virginia domicile and acquired another one. The best-information assessment remained p…
Did a taxpayer prove she was domiciled outside Virginia in 2011 without providing the requested objective records?
Not yet. The taxpayer claimed another-state residence but supplied no objective evidence despite two information requests, while her federal return used a Virginia mailing address. The assessment rema…
Did an apartment-complex statement prove that a taxpayer with a Virginia W-2 address was not a Virginia actual resident in 2013?
No. A Virginia address on the taxpayer's W-2 triggered a request for residency evidence. An apartment-complex statement from State B, without additional proof and against other returns showing nonresi…
Could a Virginia corporation exclude wages of employees working solely overseas from its payroll-factor numerator by substituting wages subject to Virginia income-tax withholding?
Not by using withholding wages as a substitute. Wages reported to the Virginia Employment Commission were strongly presumed to belong in the Virginia payroll numerator, but the presumption was rebutta…
Could a taxpayer who moved to Virginia in November overturn a 2011 income-tax assessment merely by saying he worked in Virginia for only two weeks?
No. The taxpayer admitted moving to Virginia in November and had Virginia-source income, but provided no objective evidence or return showing the correct 2011 liability. Virginia gave him 60 days to f…
Did a copy of an unrecorded Virginia return overcome an IRS-based assessment when the taxpayer supplied no federal transcript or proof of payment?
No. Virginia had no record of the claimed state return or payment, the IRS had no federal return, and IRS income information exceeded the income on the taxpayer's copy. The assessment remained due, bu…
Could a nonresident keep Virginia itemized deductions when supporting records were unavailable and a tax preparer had prepared the return?
No. The taxpayer did not substantiate the itemized deductions after repeated requests, could not show that a claimed package had been received, and said records were lost, destroyed, or unavailable. V…
Did Virginia reopen a mail audit for more invoices when a retailer repeatedly failed to document claimed exemptions, tax payments, labor charges, and extrapolation errors?
No. The retailer had already received repeated requests and an extra year to provide records, yet still could not document its claimed exemptions, tax payments, duplicate items, labor charges, or extr…
Did a taxpayer's unsupported claim of another-state residence justify changing Virginia's 2011 income-tax assessment?
No. The taxpayer used a Virginia address on the federal return, had filed Virginia returns before 2011 and again for 2012 and 2013, and supplied no objective evidence of the claimed other-state domici…
Did moving to another state for full-time work end a taxpayer's Virginia domicile when his family and major ties remained in Virginia?
No. Virginia held that the taxpayer had not abandoned his Virginia domicile. Although he worked, leased a home, registered a vehicle, and held a license in another state, his family and home remained …
Could a taxpayer overturn a Virginia assessment based only on saying it was larger than taxes owed in other years when no 2010 Virginia return had been filed?
No. Virginia's best-information assessment was presumed correct, and comparing it with other years did not prove the 2010 liability was wrong. The taxpayer had 30 days to file a 2010 Virginia return s…
Could preparing a 2011 Virginia return in tax software prove it was filed when the Department had no return, confirmation number, or payment record?
No. Tax software preparation did not prove that the Virginia return was transmitted or received. With no return, confirmation number, or payment proof, Virginia could assess from the IRS transcript at…
Did returning to Virginia for about two weeks within six months of moving away prevent a taxpayer from proving a domicile change?
No. Although returning to Virginia within six months was prima facie evidence that the taxpayer had not abandoned Virginia domicile, the full record showed a genuine move from State B to State A. Virg…
Did a taxpayer prove that computer-controlled medication management systems had to be classified as computer equipment for local BTPP tax?
No. The systems combined computers and peripherals with medication drawers and shelving, and the taxpayer did not prove the computer components could be reprogrammed and used separately. The county's …
Did a technical-services company prove that its 2010 BPOL receipts belonged outside the city, and was interest due on later refunds?
Only in part. The taxpayer had not yet proved that its 2010 service receipts should be sitused outside the city, so that issue was remanded for 30 days of evidence. The city nevertheless had to pay st…
Could a live-performance business overturn Virginia use-tax audit items without records showing electronic delivery, out-of-state assets, or tax already paid?
Not without proof. The taxpayer initially failed to document electronic software delivery, assets that allegedly never entered Virginia, and tax already paid on an asset. Virginia remanded the audit f…
Was an appeal complete when a taxpayer mentioned an IRS dispute and challenged penalties and interest but identified no error, facts, or legal authority?
No. The taxpayer's letter did not identify an alleged assessment error, relevant facts, grounds for relief, or controlling authority, so it was not a complete appeal. The 2012 assessment based on tax …
Could a taxpayer abate Virginia's 2009 assessment by producing only a State A return showing residence there for the first six months?
Not on that record. A State A return showing residence there for the first six months did not establish that Virginia domicile had been abandoned or quantify the correct liability. Because the taxpaye…
Did a retiree who kept homes in two states become domiciled in Virginia after renewing a Virginia driver's license and maintaining vehicles there?
Yes. After weighing all evidence, Virginia found the taxpayer changed domicile to Virginia in 2007. Renewing a Virginia driver's license, relinquishing the other state's license, allowing most registr…
Could a technology company remove audited use-tax purchases using representative invoices and unclear service agreements?
Only partly. Virginia removed a documented $35 item and conditionally removed two invoices showing sales tax paid. But representative invoices, emails, and claims about electronic delivery did not pro…
Could Virginia residents avoid a 2008 assessment based on an IRS income adjustment by arguing they had not pledged income or contracted with the Department?
No. Virginia starts with federal adjusted gross income, and the IRS reported that the couple had underreported it. They supplied no objective evidence that the federal information was wrong, and argum…
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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.