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 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 a Virginia domiciliary who was also a District of Columbia actual resident claim a Virginia credit for District income tax?
Potentially yes. Because the wife was a Virginia domiciliary and a District actual resident, she filed resident returns in both jurisdictions and Virginia's usual bar for D.C. nonresidents did not app…
Did a temporary employer-required assignment outside Virginia make the employee a part-year Virginia resident for 2012?
No. The employee kept her Virginia home, driver's license, vehicle registration, and voter registration and returned when the temporary assignment ended. Virginia taxed all of her 2012 income, upheld …
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 Virginia resident claim a Virginia credit for California tax paid on capital gain passed through from California rental property?
No, on the record presented. Because California generally lets a Virginia resident claim a reciprocal credit on the California nonresident return, Virginia does not also allow the resident to claim th…
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…
Could Virginia residents claim an out-of-state tax credit for District of Columbia Unincorporated Business Franchise Tax paid on sole-proprietor income?
No. The District of Columbia Unincorporated Business Franchise Tax is a franchise tax that does not tax all of an individual's income, so it is not the kind of individual income tax eligible for Virgi…
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…
Was an out-of-state college student a Virginia resident for tax purposes after maintaining a Virginia abode for more than 183 days in 2012?
Likely yes. The student could retain domicile in another state, but Virginia's separate actual-resident rule applies when a person maintains a Virginia abode for more than 183 days. Her spring and fal…
Did a divorce property-settlement agreement assigning tax liability to one spouse prevent Virginia from collecting a joint-return assessment from the other spouse?
No. Spouses who filed a joint Virginia return were jointly and individually liable for the full tax. Their divorce agreement could allocate responsibility between them, but it could not bind the Depar…
Was a foreign citizen who lived and worked abroad in 2012 exempt from Virginia resident tax even though he retained a Virginia house, vehicles, and license?
He was not taxable as a Virginia resident for 2012, but he still owed Virginia tax as a nonresident on rent from his Virginia house. The federal substantial-presence test did not control Virginia resi…
Did 90 days of full-time National Guard duty qualify for Virginia's subtraction for basic military pay received during extended active duty?
No. The husband's orders placed him on full-time National Guard duty, which the cited federal definitions distinguish from active duty. He therefore did not qualify for Virginia's extended-active-duty…
Could Virginia consider an administrative appeal filed December 10 when the 90-day deadline expired November 23?
No. The August 25 assessment had to be appealed by November 23, 2015, but the taxpayer filed on December 10, so the administrative appeal was time-barred. Virginia still allowed 30 days to file a 2012…
Could buyers use a transferred 2006 Virginia Land Preservation Tax Credit on their 2012 return after its five-year carryover expired?
No. A Land Preservation Tax Credit earned in 2006 could be carried only through 2007-2011. The later 10-year carryover applied only to property conveyed on or after January 1, 2007. The Department had…
Can a taxpayer bypass Virginia's refund deadline by carrying a late-claimed overpayment forward as a credit to the next year?
No. Virginia treated a request to credit an overpayment to another tax year as subject to the same three-year limitation as a cash refund. The 2011 return was due May 1, 2012, so the taxpayer had to f…
Did federal Tax Court allocation or a divorce agreement relieve a husband from Virginia liability on a joint 2010 return?
No. Virginia adjusted the 2010 joint return to match federal income changes that the couple had not reported. State law made each spouse liable for the entire joint-return tax. The federal Tax Court's…
Could a taxpayer receive Virginia's 2009 amnesty benefits for old liabilities when the required returns were not filed by December 5, 2009?
No. Virginia's 2009 amnesty required all relevant returns and supporting documents to be filed, and the qualifying liability paid, by December 5, 2009. The taxpayer did not file several old returns un…
Could a Virginia resident claim an out-of-state tax credit for wage withholding that the other state fully refunded?
No. The other state's return showed a full refund of the wage withholding, so no tax remained actually paid there. Allowing the same amount as a Virginia credit would create a double benefit. If the o…
Did a temporary State Department assignment abroad make a Virginia couple nonresidents and allow them to exclude the husband's overseas income?
No. The couple kept their permanent Virginia home, voter registrations, vehicles, licenses, and intent to return, so the temporary overseas posting did not end domicile. Virginia taxed the husband's f…
Did Virginia have to allow a conservation-contribution deduction equal to all federal adjusted gross income when the IRS allowed only 50%?
No. Virginia itemized deductions followed the amount accepted federally, and the IRS record showed the qualified conservation deduction was reduced from 100% to 50% of federal adjusted gross income. T…
Did a Virginia partner's Maryland Schedule E professional income and interest qualify for Virginia's full border-state tax credit?
No. The husband's distributive partnership income reported on Schedule E was business income, not earned income or Schedule C business income for the special border-state rule. His Maryland-source int…
Could a taxpayer obtain full Virginia refunds for 2009-2013 by claiming foreign domicile after filing 2009 late and retaining strong Virginia ties?
No. The 2009 full-refund claim was filed after the three-year deadline, and the two-year assessment-payment exception did not apply because the domicile claim went beyond the IRS-income adjustment ass…
Did an overseas assignment establish foreign domicile when the taxpayer kept a Virginia license, voting and vehicle ties, and intended to return?
No. Although the taxpayer leased a home, licensed vehicles, and obtained a driver's license abroad, he retained Virginia voter and vehicle ties, renewed his Virginia license, claimed he filed Virginia…
Did timely protective claims produce additional Virginia refunds for the taxpayer's 2010 and 2011 overpayments?
No. The protective claim itself was timely, but the underlying 2010 original return was filed after the three-year refund deadline, so that overpayment could not be refunded. The 2011 refund had alrea…
Could a military spouse avoid Virginia income tax for 2009 and 2010 by claiming the servicemember's out-of-state domicile?
No. The Department found that the spouse had established Virginia domicile after moving there in 2008. The Servicemembers Civil Relief Act did not let her simply elect her spouse's domicile, and the r…
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…
Did Virginia allow a 2009 net operating loss caused by theft to be carried back three years to a 2006 individual return?
Yes. Under the historical federal rule Virginia followed, the portion of an individual's net operating loss arising from casualty or theft had a three-year carryback. Virginia's exception for elected …
Would Virginia suspend 2010 and 2011 assessments while a taxpayer continued contesting the IRS audit that produced the federal adjustments?
No. Virginia used the IRS information then available and would not independently revisit the federal taxable-income determination. The 2010 and 2011 assessments remained due and payable. If the IRS la…
Did a married couple prove that the husband left Virginia before 2013 and the wife changed domicile to another state in April 2013?
Yes. The evidence showed that the husband was domiciled in another state throughout 2013 and spent only about 60 days working in Virginia, while the wife abandoned Virginia and began residing exclusiv…
Were taxpayers entitled to a Virginia refund merely because they filed an amended federal return contesting an IRS audit?
No. Virginia properly assessed 2011 tax from the IRS information after the taxpayers failed to report the federal adjustment, and it would not independently revisit the IRS determination. Their refund…
Was a California resident's February 2015 amended Virginia return timely after California changed her 2010 tax liability that same month?
Yes. Although the ordinary three-year period for amending the 2010 Virginia return had expired, Virginia law allowed one year after another state's final tax change. California disallowed its credit i…
When did a Virginia resident working and traveling abroad establish a new foreign domicile during 2012?
The taxpayer remained a Virginia domiciliary resident until August 2012, when he began leasing a home in the foreign country where he had accepted employment. Time spent traveling or temporarily carin…
Did Virginia's recomputation of a taxpayer's retirement-income subtraction produce relief for the paid 2010 assessment?
Yes. Virginia used the available records and W-2-verified contributions to recompute the allowable retirement subtraction. It reduced the paid 2010 assessment and directed a refund with accrued intere…
Could taxpayers defeat Virginia assessments by disagreeing with final IRS audit adjustments to their 2010-2012 federal income?
No. Virginia relied on the IRS's final audit adjustments and would not re-decide whether the taxpayers qualified for federal securities-trader treatment. The 2010-2012 assessments were upheld, but the…
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 overseas contract work make a husband a Virginia part-year resident when his family home and other domicile ties remained in Virginia?
No. The husband remained a Virginia domiciliary resident while working abroad because he kept a permanent Virginia home with his wife, vehicles and a driver's license there, and presented no evidence …
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 Virginia residents use the special border-state credit for partnership income reported in Maryland, North Carolina, and West Virginia?
No. The special rule applied only to qualifying income from one contiguous state, and in 2012 only North Carolina met the required tax-base condition. The taxpayers' North Carolina partnership income …
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…
Could a husband under age 70 claim his older wife's unlimited Virginia prepaid-tuition deduction by saying he bought the contracts as her agent?
No. The husband created and owned the prepaid tuition contracts and made the contributions in his own name, so the under-70 purchaser's $4,000-per-contract limit applied. Marriage alone did not prove …
Did a District of Columbia resident who commuted to a Virginia job and earned only wages owe Virginia income tax for 2013?
No. Virginia had no reciprocal income-tax agreement with the District of Columbia, but the taxpayer qualified for the separate daily-commuter filing exclusion. He lived in D.C., worked exclusively in …
Did a military home of record in another state prevent Virginia from treating a service member as domiciled in Virginia for 2012?
No. The service member's home of record did not outweigh his long-term Virginia home, driver's license, vehicle registrations, resident returns, family residence, and decision to remain after retireme…
Could a Virginia resident exclude short-term National Guard pay as extended active-duty pay or under the Servicemembers Civil Relief Act?
No. The taxpayer was a Virginia resident, did not show qualifying active military status under the Servicemembers Civil Relief Act, and did not prove extended active duty exceeding 90 days. The Nation…
Did a copy of a federal return prove that Virginia's 2011 assessment used the wrong federal adjusted gross income?
No. Virginia relied on the higher federal adjusted gross income reported by the IRS because the taxpayer supplied no objective proof that the IRS data was wrong. The assessment was upheld, but the tax…
Did paying the full balance with a 2014 part-year return eliminate Virginia's estimated-tax underpayment addition and accrued interest?
No. Paying the balance with the return did not replace the required timely withholding or estimated installments during 2014. The couple did not satisfy the prior-year or annualized-income exceptions,…
Could unfamiliarity with Virginia law or website language save a 2010 refund claim filed after the limitations period?
No. Virginia held that the automatic extension still required filing by the extended due date and timely payment of the estimated balance. Because the taxpayers did neither, the refund period ran from…
Did paying income tax to a former state excuse a full-year Virginia resident from filing a 2012 Virginia return?
No. The taxpayer lived and worked in Virginia throughout 2012, so another state's withholding and return did not remove the Virginia filing duty. He was responsible for updating his employer's withhol…
Did the 2009 military-spouse law automatically end a spouse's existing Virginia domicile without personal presence in the service member's state?
No. The military-spouse amendment was not retroactive and did not let the taxpayer simply elect her spouse's domicile. Because she had established Virginia domicile and did not acquire personal presen…
Could a Virginia resident reduce an estimated 2012 nonfiler assessment by filing the actual return with income and deductions?
Yes, through filing the actual return. Virginia could estimate liability from IRS information when the resident did not file or supply records. The taxpayer received 30 days to submit a 2012 Virginia …
Could taxpayers restore a 2013 estimated-payment carryover by repeatedly ignoring Virginia's earlier out-of-state credit adjustments?
No. Virginia traced the carryover from 2010 through 2013 and upheld its reductions because the taxpayers kept reclaiming an out-of-state credit the Department had previously adjusted. The 2013 assessm…
Did a three-year foreign job and another state's license, voting, and vehicle records prove that a Virginia domiciliary changed domicile?
No. The taxpayer's three-year foreign assignment was for a definite term, and she showed no permanent intent to remain abroad. Although she obtained another state's license, voter registration, and ve…
Should a taxpayer who moved into Virginia in May 2010 file as a full-year resident after an IRS income adjustment?
No. Virginia found that the taxpayer became domiciled in the state in May 2010 rather than being a full-year resident. He had to file Form 760PY, report income attributable to the Virginia-residence p…
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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.