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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Did a hotel preserve its sales-tax appeal and overstate the 90-day exemption for continuously contracted railroad room blocks?
No relief was granted. The hotel's letter arrived within 90 days but was not a complete appeal because it supplied no documentation or legal grounds, so the application was time-barred. Virginia never…
Which Virginia corporate audit adjustments survived review for a group with intercompany loans and merchandise sales?
Virginia could examine and correct older net-operating-loss carryforwards when computing taxable income for open years, but most disputed intercompany adjustments had to be reversed. The documented le…
Was a restaurant LLC member personally liable for the companies' unpaid Virginia sales and withholding taxes?
Yes. Virginia found the taxpayer signed checks and tax returns, identified himself as president and managing owner, had authority over tax payment, and later operated the restaurant. He did not prove …
Was a nonprofit's amended 2008 return timely after Virginia collected part of its corporate tax assessment?
Yes. Although the ordinary three-year period had expired, Virginia's collection of part of the assessment counted as payment. The nonprofit filed its amended return shortly afterward, raised only the …
Did the Paynes obtain relief for an amended 2004 Virginia tax return filed after the limitations period?
No. The Isle of Wight County Circuit Court found that Virginia properly denied Michael and Rhonda Payne's amended 2004 tax return because it was filed beyond the statute of limitations. The court ente…
Were a telecommunications company's 2004 and 2005 protective refund claims timely filed or eligible for reconsideration?
No. Virginia had denied the original protective claims on May 4, 2009, so an addendum filed seven days later was a new claim, not an amendment to a pending one, and it met none of the reconsideration …
Was a Virginia sales-tax appeal timely when postmarked nine days after the 90-day deadline?
No. The assessment was dated July 24, 2012, making October 22 the last day to file a complete administrative appeal. The taxpayer's October 31 postmark was nine days late. Virginia strictly enforced t…
Could an individual challenge Virginia's 2008-2009 estimated income-tax assessments after the 90-day appeal deadlines?
No. The taxpayer appealed the 2008 assessment more than a year after its April 4, 2012 deadline and appealed the 2009 assessment after its November 27, 2012 deadline, so both applications were barred.…
Could a manufacturer reduce 2008-2010 local machinery-and-tools tax for equipment it said was disposed of or idle after a foundry closure?
Only partly. The 2008 amended return was filed after the statutory deadline and remained barred. For 2009 and 2010, however, Virginia found that the manufacturer might have enough evidence to show tha…
Could a taxpayer challenge a Virginia sales-tax assessment after the 90-day appeal deadline and avoid the post-amnesty penalty?
No. The assessment was dated September 6, 2012, making the complete administrative appeal due December 5, 2012, but the Department received the taxpayer's only appeal correspondence on April 16, 2013.…
Could a Virginia resident obtain out-of-state tax credits without filing Virginia returns for 2007 and 2008?
The taxpayer first had to file Virginia returns. She conceded Virginia domicile and supplied other-state returns but had filed no Virginia return for 2007 or 2008. The Department required both Virgini…
Could taxpayers obtain a Virginia refund by filing their original 2008 part-year return after the extended due date?
No. The taxpayers filed their original 2008 part-year Virginia return on May 22, 2012, after both the extended filing deadline and the three-year refund period measured from the May 1, 2009 original d…
Could taxpayers apply a late-filed 2008 overpayment to 2009 after Virginia's refund limitations periods expired?
No. The taxpayers filed the 2008 amended return in October 2012, after the general three-year period and every applicable statutory exception had expired. Calling the requested relief a credit against…
Did Virginia's processing of an unauthorized 2005 combined return permit the affiliated group to change from separate filing?
No. Processing the 2005 combined return, moving payments, and changing registration records did not constitute Tax Commissioner approval. The affiliates were treated as not having filed their required…
Could a taxpayer add computational-error refund claims after its original Virginia protective claim had already closed?
No. The taxpayer added the computational-error issue after its original litigation-based protective claim had closed, so Virginia treated the submission as a new claim. The 2004 claim came after the t…
Was a 2008 amended machinery-and-tools tax return timely when the county learned of the representative's authorization only after the limitation period expired?
Yes. The taxpayer's service contract had been assigned to the representative before the representative filed the amended return on December 29, 2011. The county's later receipt of evidence proving tha…
Did federal protection for a nonresident vessel pilot's compensation prevent Virginia tax on partnership income passed through by the pilots' association?
No. The federal rule protected compensation for piloting duties, but the association filed as a partnership and reported its fees less expenses as ordinary income. That character passed through to the…
Could taxpayers reopen a 2004-2006 residency determination after the 45-day reconsideration deadline or appeal 2007-2009 assessments after 90 days?
No. The July 12, 2010 determination for 2004-2006 could be reconsidered only if a qualifying request arrived within 45 days, but the taxpayers waited until May 13, 2011. Their December 2010 assessment…
Could an estate recover a 2005 Virginia overpayment when illness delayed the original return until December 2009?
No. The taxpayer's illness could require a fiduciary or authorized agent to file on her behalf, but Virginia law did not suspend the refund limitation period for mental or physical disability. Because…
Could a developer recover recordation tax on a released portion of a deed-of-trust loan when it filed the refund claim more than three years later?
No. Paying recordation tax when the deed of trust was recorded counted as an assessment, so the taxpayer had three years from that date to file its protective refund claim. The deed was recorded in Ja…
Could a taxpayer use overpayments from 2004-2006 returns filed in December 2010 to offset 2007 tax and avoid Virginia penalty and interest?
No. The three-year refund deadlines for 2004, 2005, and 2006 expired before the taxpayer filed all six returns on December 5, 2010, so those old overpayments could not be refunded or used as requested…
Could financial hardship excuse a 2007 Virginia refund return filed more than six months after the three-year deadline?
No. The original 2007 return had to be filed within three years of its due date to claim a refund, making the deadline May 2, 2011 because May 1 fell on a Sunday. The taxpayer filed on November 11, 20…
Was a Virginia sales-tax appeal timely when the taxpayer faxed it two days after the 90-day deadline?
No. The February 1, 2012 assessment required a complete appeal by May 1. For a fax filing, the appeal had to be dated and received by the 90th calendar day. The taxpayer transmitted and Virginia recei…
Did a timely extension payment preserve a 2006 Virginia refund when the taxpayer did not prove the return was filed within the extension period?
No. Paying with an extension was only one condition; the taxpayer also had to file the return by the extended November 1, 2007 deadline. Virginia had no record or objective proof of the claimed Octobe…
Did a campground owe tax on park trailers used as cabins, and did it have to tax campground accommodations?
Yes. Virginia classified the wheeled, detachable-hitch park trailers as tangible personal property rather than modular buildings. The campground was the consumer of trailers used to provide accommodat…
Could Virginia consider a consumer-use-tax appeal filed one day after the ruling's stated 90-day deadline?
No. Virginia strictly enforced the 90-consecutive-day appeal period and said the faxed appeal arrived one day after the deadline, so it could not consider the merits. The taxpayer had paid the origina…
Could Virginia keep an itemized-deduction adjustment after the IRS withdrew it and the ordinary assessment period expired?
No. Virginia could assess the unreported income change at any time because the taxpayer failed to report the final federal change, and the taxpayer accepted that part. But once the IRS withdrew its it…
Could taxpayers challenge Virginia assessments more than 90 days after they were issued while seeking IRS reconsideration?
No. The taxpayers filed their administrative appeal well after Virginia's 90-day deadline, so the Commissioner found no basis for relief. Virginia could assess from the IRS's final figures after the t…
Could Virginia consider a consumer-use-tax appeal mailed after the 90-day assessment deadline?
No. The March 10, 2011 assessment had to be appealed by June 8, but the legible appeal was mailed July 13. Virginia strictly enforced the 90-day limit and barred consideration despite written notices …
Could severe medical problems extend Virginia's deadline to claim a 2004 income-tax overpayment as a 2005 credit?
No. Applying an overpayment to the next year was subject to the same three-year limit as a refund. The taxpayer's missed extended filing date made the extension invalid, and the September 2008 return …
Where were an interstate motor carrier's tractors and trailers subject to Virginia local tangible-property tax?
The city could not assess additional 2007 tax because its assessment period had expired. For 2008-2010, however, situs depended on where tractors and trailers were normally garaged or parked, consider…
Could Virginia Taxation exempt or refund tax on pollution-control equipment before a statutory certifying authority approved it?
No. The Department of Taxation administered the exemption only after a statutory certifying authority approved the equipment; it had no power to make that technical certification itself or override DE…
Could a pass-through recipient preserve transferred conservation credits based on an easement appraisal Virginia found overstated?
No. Virginia rejected the landowner's unsupported approximately $31 million easement valuation and adopted an independent $3.9 million sales-comparison value. That reduced the total credit from about …
Did Virginia accept a conservation-easement appraisal valuing the donated interest at about $31 million?
No. The owner's discounted-cash-flow appraisal used unsupported lot assumptions and implied nearly eightfold land appreciation in about 2½ years. Virginia adopted an independent sales-comparison appra…
Could a taxpayer overturn years of Virginia assessments by claiming he had no federal adjusted gross income under his reading of federal law?
No. Appeals for 1995, 1996, 1998-2001, and 2005 were filed after Virginia's 90-day deadline and were barred. The 2007 appeal was timely, but the taxpayer admitted receiving income and supplied no obje…
Could a corporation carry 2004-05 net operating losses forward without attaching Virginia elections, or offset later assessments after refund deadlines expired?
No. Virginia required a statement with each original loss-year return to elect out of the carryback period; later conduct did not substitute for that election. Because no statements were attached, the…
Did a letter and amended pass-through return satisfy Virginia's duty to report an IRS change to an individual's income?
No. The taxpayer's letter and amended pass-through entity return did not provide enough information to recompute the individual's Virginia tax and did not replace the required amended individual retur…
Did prior return processing or use of Virginia-approved tax software prevent a later assessment for an overstated out-of-state tax credit?
No. Virginia upheld the additional tax and interest because earlier processing did not establish that the return was correct, and software approval tested conformity with processing requirements rathe…
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…
Could Virginia residents reopen the 2004 refund period after another state assessed tax on the same rental income in 2009?
No. The March 2009 amended Virginia return came after the general May 2, 2008 deadline, and none of the exceptions reopened 2004. The other state's assessment was not a Virginia assessment, a 2009 fed…
Did notices of intent and information requests preserve appeals of Virginia nonfiler assessments without complete appeals filed within 90 days?
No. Virginia had not received complete appeals stating the taxpayer's grounds and relevant facts within 90 days of either assessment, so both appeals were barred. The taxpayer also provided no objecti…
Could a late Virginia appeal defeat assessments by arguing that wages were not taxable and no federal return meant no federal adjusted gross income?
No. The appeal was filed after the 90-day deadline, and Virginia also rejected the wage-tax and no-return arguments as having no basis in fact or state law. The 2002-2006 assessments remained due. The…
Could Virginia assess additional 2005 and 2006 income tax after the ordinary three-year period when taxpayers did not report IRS changes?
Yes. Virginia's ordinary three-year assessment limit did not protect the taxpayers because they failed to file amended Virginia returns within one year after the IRS made final changes. Under Va. Code…
Did a letter filed on the adjusted 90th-day deadline preserve a Virginia sales-tax appeal when it omitted the grounds and relevant facts?
No. Although February 7, 2011 was the adjusted deadline, the taxpayer's letter did not constitute a complete appeal because it omitted the grounds and relevant facts required by Va. Code § 58.1-1821. …
Did a timely notice of intent preserve a Virginia sales-tax appeal or avoid the 20% post-amnesty penalty when no complete appeal followed?
No. A notice of intent did not satisfy or extend the 90-day deadline for a complete appeal stating the grounds and relevant facts. Because no complete appeal was filed, Virginia treated the liability …
Could Virginia refund a federal-refund offset after the taxpayer proved she was not a 2002 Virginia resident but filed after every refund deadline?
No. Virginia accepted that the taxpayer was domiciled elsewhere in 2002 and abated the unpaid balance, but her May 2010 refund request came more than two years after the February 2008 offset payment a…
Did a six-month filing extension move the three-year Virginia refund deadline when the taxpayer did not file by the extended due date?
No. Under the rules applicable to the 2004 return, the extension became void when the taxpayer failed to file by November 1, 2005. The three-year refund period therefore ran from the original statutor…
Did a federal extension preserve Virginia refund claims when the taxpayers filed their 2005 return after Virginia's six-month extended due date?
No. For tax year 2005, Virginia's six-month extension required the original return to be filed within the extended period. Filing after that date negated the extension, so the three-year refund period…
Did a W-2, an exchange agreement, and an unsigned letter faxed by the deadline count as a timely Virginia refund return?
No. The May 1, 2008 fax did not request a stated refund, lacked the taxpayer's signature, omitted a completed prescribed return and deduction information, and did not disclose the amount of the Sectio…
Was a 1996 Virginia refund claim timely when the amended return was filed in 2000 but the IRS accepted the NOL carryback in 2007?
Yes, on the specific facts. The taxpayers filed the federal and Virginia amended returns in January 2000. Virginia delayed processing while the IRS reviewed the net-operating-loss carryback; the IRS u…
Could taxpayers obtain refunds for long-term-care premium deductions claimed on late 2003 and 2004 amended returns and a missing 2006 return?
The 2003 and 2004 refunds were barred because the amended returns were filed after Virginia's three-year deadline, and a later policy change did not extend that period. The Department lacked authority…
Could taxpayers obtain a Virginia refund more than one year after an IRS closing agreement by relying on later notices or equitable recoupment?
No. The taxpayers filed their amended Virginia returns more than one year after the IRS closing agreement became final. A later notice confirming the same changes and later interest notices did not cr…
Could a taxpayer overturn a 1991 Virginia assessment in 2009 by arguing income-tax filing was voluntary and IRS data was illegal?
No. The assessment was issued April 8, 1994, but the taxpayer did not appeal until January 2009, long after even Virginia's former three-year administrative-appeal policy for pre-August 2003 assessmen…
Could Virginia waive the refund deadline because an accountant failed to prepare a return and the taxpayer later became severely disabled?
No. The 2003 return was due May 1, 2004, and the refund period expired May 1, 2007—or November 1, 2007 with an extension—before the March 31, 2008 filing. Virginia could not enlarge the statutory peri…
Could a Virginia taxpayer exclude qualified dividends from 2005 federal adjusted gross income after the IRS included them?
No. Qualified dividends remained part of federal adjusted gross income even though federal law taxed them at capital-gain rates. Virginia began with the IRS-corrected federal amount and offered neithe…
Could a Virginia city collect consumer utility tax assessments after the five-year local-tax collection period expired during the appeal?
No. Virginia's general local-tax collection statute allowed enforcement for five years after December 31 of the assessment year, and the consumer utility tax appeal statute did not extend that deadlin…
Could Virginia review a local mobile property assessment when the taxpayer appealed more than a year after the county's final determination?
No. The county issued its final determination on August 23, 2007, so the taxpayer had to appeal to the Tax Commissioner by November 21, 2007. He did not file until November 2008, after paying the 2003…
Did a notice of intent and incomplete protest preserve Virginia's 90-day deadline for appealing a sales-tax assessment?
No. The June 2, 2009 assessment required a complete administrative appeal by August 31. The taxpayer sent a notice of intent and an August protest without supporting documentation or statutory grounds…
Was a Virginia sales-tax appeal timely when it was dated September 1 after an August 31 deadline?
No. The assessment was issued June 2, 2009, making August 31 the deadline for applying to the Tax Commissioner. The taxpayer's correspondence was dated September 1 and received September 2. Virginia h…
Was a hand-delivered Virginia sales-tax appeal timely when the Department received it on the 91st day after assessment?
No. Assessments issued June 26, 2009 required a complete appeal by Thursday, September 24. The taxpayer delivered a notice of intent in August but hand-delivered the actual appeal on September 25, the…
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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.