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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Could a municipality use sales-tax revenue from a 10,000-square-foot public-facility expansion to repay newly issued bonds?
No. The proposed 10,000-square-foot addition to a 63,000-square-foot facility was below the statute's 50% expansion threshold. The planned bonds also would be issued after June 30, 2007, outside the l…
What does Virginia Ruling of the Tax Commissioner P.D. 09-17 conclude about Salary related to prior employment does not affect Taxpayer's right to subtraction?
Yes. Federal law treated the retiree as an employee and reported the taxable value of excess group-term life-insurance coverage as Form W-2 wages. Because his total W-2 income for 2006 was below $15,0…
Was a museum and trade-show exhibit fabricator a retailer, a real-property contractor, or an industrial manufacturer for Virginia sales tax?
Mostly a retailer, but with project-level exceptions. Exhibits, traveling displays, furniture, graphics, and signs generally remained tangible personal property, so component materials transferred to …
What does Virginia Ruling of the Tax Commissioner P.D. 09-15 conclude about Tax applies to the charges for the fabrication of tangible personal property?
Yes. Cutting contractor-owned bricks into different shapes so they fit masonry arches changed their form and was taxable fabrication. The contractors were users and consumers of the bricks and purchas…
Did franchisee royalty payments passed through a restaurant corporation let its related trademark subsidiary qualify for Virginia's unrelated-party add-back exception?
No. Although the corporation passed most franchise royalties to its related intangible holding company, the franchise agreements licensed trademarks from the corporation itself. Because the subsidiary…
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…
What does Virginia Ruling of the Tax Commissioner P.D. 09-12 conclude about Qualified Settlement Funds?
Yes. The trustee elected to treat the disputed-claims reserves as disputed ownership funds, and their cash-only assets made them qualified settlement funds for federal tax. Because federal rules treat…
Did a California shareholder owe Virginia nonresident tax on pass-through income from an S corporation with a Virginia office?
Yes. The S corporation's Virginia-source income remained Virginia-source income when passed through to the nonresident shareholder, even though he worked only in California. Because he filed no Virgin…
What does Virginia Ruling of the Tax Commissioner P.D. 09-10 conclude about Taxpayers failed to pay the tax due reported on the return?
Yes. Virginia taxed the pension distributions because the couple received them after becoming Virginia residents, even though the employment and pension accrual occurred in another state. Virginia did…
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…
Could a Virginia corporation allocate outside the state income from a 50%-owned partnership operating only in another state?
Not on the evidence provided. Virginia generally treated partnership income as operational and apportionable, including the partner's share of partnership property, payroll, and sales. The corporation…
Did a traveling artist abandon Virginia domicile by owning homes and studios elsewhere while retaining a Virginia home, license, and voter registration?
No. Despite homes, studios, vehicles, and business ties in other states, the artist kept a preexisting Virginia residence, renewed a Virginia driver's license in 2003, remained registered to vote, con…
Were Internet-downloaded music and a shower chair sold to an individual exempt from Virginia sales tax?
Yes. Documented music downloads were nontaxable Internet-delivered service transactions, and the shower chair qualified as durable medical equipment because shower seating was listed in the regulation…
What did the Chesterfield County Circuit Court decide in Ross L. McDonald's case against the Virginia Department of Taxation?
The court entered judgment for the Virginia Department of Taxation on every allegation. It granted a motion to strike part of Ross McDonald's complaint after his proof and then found, after all eviden…
How did the Richmond Circuit Court resolve the consolidated DiBelardino and Dutton tax-assessment cases?
The court reached opposite results. It upheld the Department's assessment against Ezio and Stephanie DiBelardino because their Virginia property interests supplied minimum contacts sufficient for due …
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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.