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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I donated over $5,000 of used clothing and household goods to charity but never got a qualified appraisal — can Virginia at least let me deduct the first $5,000 of it?
No — missing the required substantiation for your donation's ACTUAL value denies the entire deduction, with no fallback to a lower tier's threshold. A couple claimed cash and noncash charitable-contri…
If I move out of Virginia but keep some ties here -- like renewing my Virginia driver's license or keeping a house -- when do I stop being a Virginia resident for income tax?
The assessment was abated -- the taxpayer successfully changed his domicile out of Virginia. The Department had assessed him as a 2020 Virginia resident, but he had moved to another state ("State A") …
I got a new or consolidated bill for an old tax assessment. Does that new bill restart my 90-day deadline to appeal?
No -- a later bill does not restart your appeal clock, and this taxpayer's 2024 appeal of 2014-2015 assessments was time-barred. Virginia assessed her 2010 and 2011 income tax in March 2014 and March …
I live and work overseas but my family stays in our Virginia home and I kept a Virginia license and voter registration. Am I still a Virginia resident for income tax?
The assessment was abated -- he was not a Virginia resident. This taxpayer had lived and worked abroad ("Country A") since 2008, but the Department taxed him as a 2019 Virginia domiciliary resident be…
Does making ice cream from a dairy mix count as 'manufacturing' for local Machinery & Tools tax, and how far back can I appeal a county's business property tax?
Yes -- making ice cream from a dairy mix is 'manufacturing,' so the business's equipment qualifies for the lower Machinery & Tools (M&T) tax classification. An ice cream and frozen-dessert maker claim…
I donated clothes, furniture, and household goods to charity. What records does Virginia require to deduct them, and is a completed Form 8283 enough?
The deductions were disallowed and the assessments upheld. These joint filers claimed noncash charitable contributions -- clothing, toys, holiday decorations, furniture, electronics, and housewares --…
My company is headquartered in a Virginia county but performs its services somewhere else. Can the county charge BPOL license tax on 100% of my gross receipts?
No -- a county cannot pin 100% of your gross receipts to your headquarters when the actual work happens at 'definite places of business' elsewhere. This fuel-services company was headquartered in a Vi…
Which Virginia locality can tax my interstate trucks, at what assessment value, and what if the trucks are registered in another state or weren't garaged anywhere for six months?
Mostly upheld, with one taxpayer win and a remand. An interstate trucking company disputed a county's business personal property tax on its trucks for 2020 through 2024. The Tax Commissioner ruled: (1…
My business was assessed local business personal property tax on equipment I say was never located in that county. How do I appeal, and does the county have to consider my evidence?
The case was sent back (remanded) to the county for another look -- a partial win for the taxpayer. A technology company was assessed local business tangible personal property (BTPP) tax by a county f…
Does the sales-and-use-tax research-and-development exemption cover a testing lab's purchases -- including common hardware -- or is its 'pass/fail' testing just non-exempt quality control?
The taxpayer won -- a Richmond Circuit Court held the testing lab's purchases were exempt research and development, and ordered the $75,041.41 assessment corrected with a refund plus interest. E-Labs,…
I retired and moved to another state, but I kept my Virginia house and license and never answered Virginia's residency questionnaire. Am I still a Virginia resident?
The assessment was upheld -- the taxpayer stayed a Virginia domiciliary resident because he failed to prove he abandoned Virginia. This is the losing counterpart to Virginia's domicile wins: to change…
I moved to another state right before the COVID-19 pandemic but never got that state's driver's license or vehicle registration. Am I still a Virginia resident for taxes?
The assessment was abated and her payments refunded with interest -- she was not a Virginia domiciliary resident for 2020. She had moved around for work for years and began living and working in anoth…
I moved to another state and vote there, but I still own rental houses in Virginia and kept my Virginia driver's license. Am I still taxed as a Virginia resident?
The assessment was abated -- she was not a Virginia domiciliary resident for 2019. She had moved in 2015 into a home she owned in another state ("State A"), gotten a State A ID card, and, most importa…
I already live in another state but got a Virginia driver's license and registered a car here. Does that make me a Virginia resident for income tax?
The assessment was abated -- the taxpayer was not a Virginia resident for 2019. He had been domiciled in another state ("State A") since 2006, and the Department had already accepted that change when …
If the IRS audits my federal return and raises my income, can I fight the resulting Virginia assessment by arguing the IRS got it wrong?
No -- the assessment stood. When the IRS audits your federal return and increases your income, Virginia starts from your federal adjusted gross income and follows that final federal result; it does no…
I gave Virginia my donation lists to back up my charitable deductions, but they were disallowed. Why?
The assessment was upheld. This taxpayer claimed charitable-contribution itemized deductions for the 2020 tax year and, asked for proof, submitted donation lists. The Department found that at least 8 …
In Virginia, is computer software taxable, and how are software maintenance contracts taxed -- especially when they are bundled with computer hardware?
Partly for the taxpayer. Virginia treats software delivered electronically as an exempt service and software delivered on a physical medium (or bundled with a taxable sale of hardware) as taxable tang…
I sent Virginia my donation lists to support my charitable deductions, but they were disallowed. Why?
The assessments were upheld. This taxpayer claimed charitable-contribution itemized deductions for 2020, 2021, and 2022 and, asked for proof, submitted donation lists. The Department found that at lea…
We filed jointly and sent Virginia our donation lists, but our charitable deductions were still denied. Why?
The assessments were upheld. This married couple claimed charitable-contribution itemized deductions for 2020, 2021, and 2022, but when the Department asked for proof, it found that at least 14 of the…
The Department disallowed my charitable deductions even though I sent in donation lists. Why isn't my documentation good enough?
The assessments were upheld -- the documentation was not credible. This taxpayer claimed charitable-contribution itemized deductions for 2020, 2021, and 2022, and when the Department asked for proof, …
How much documentation do I need to deduct donations of used goods like clothing and furniture on my Virginia return -- and if I don't have an appraisal, can I at least deduct part of it?
Mostly upheld, with partial relief. Virginia follows the federal (IRS) rules for proving noncash charitable donations, which set three tiers of documentation: for property up to $500 you need a detail…
I backed up my charitable deductions with donation lists, but Virginia disallowed them. Why?
The assessments were upheld. This taxpayer claimed charitable-contribution itemized deductions for 2020, 2021, and 2022 and, asked for proof, submitted donation lists. The Department found that at lea…
When can a Virginia hotel stop charging sales tax on a long-term guest's room, and what proof does it need if the exemption is questioned on audit?
The assessment was upheld. A Virginia hotel may treat room charges as exempt only AFTER a guest has stayed 90 continuous days -- not before. Virginia exempts rooms furnished to a transient for more th…
Does an out-of-state advertising firm owe Virginia use tax on the direct-mail postcards and letters it creates and has a third party print and mail to Virginia residents?
No Virginia sales or use tax is due on these facts. An out-of-state advertising business that develops and creates direct-mail pieces from customer data, and hires out-of-state vendors to print and ma…
Does an out-of-state publisher owe Virginia sales or use tax on magazine subscriptions, advertising services, mailed advertising postcards, and electronic newsletters and email lists sold to Virginia customers?
Nothing the out-of-state publisher sells is subject to Virginia sales or use tax on these facts. Virginia exempts sales of newspapers, magazines, and other publications issued at intervals of three mo…
When will Virginia grant reconsideration of a final determination -- and can I get it by arguing the Department reached the wrong result or by raising a new legal argument?
The assessments stand -- none of the four reconsideration grounds were met. This is a follow-on to P.D. 24-120, where the Department upheld additional telecommunications minimum tax against an affilia…
I'm a contractor who charged my customers sales tax on real-property installation jobs but should have paid use tax on my own materials. Can Virginia give me credit for the sales tax I already remitted?
Relief granted -- the contractor gets a one-time credit. A garage-door seller/installer was assessed consumer USE tax on materials it bought and consumed on Virginia real-property installation jobs; a…
My sales and use tax audit didn't credit use tax I already paid, and it covers months after I closed my business. Can I get the credit and have the closed months removed?
Partial relief -- the case is sent back to the auditor. A consuming contractor was assessed sales and use tax on untaxed purchases and raised two points. First, it wanted credit for use tax it had acc…
How does a telecommunications pass-through entity owned by a separately filing corporation compute its Virginia minimum tax -- against its own income tax as if it were a corporation, or against what its owner actually paid?
The assessments stand -- though the Department fixed its own reasoning to get there. A telecommunications business run as a single-member LLC (a pass-through) was wholly owned by a corporation that fi…
My POS vendor didn't charge tax on the software and setup services bundled with the equipment. Are those exempt, and can I claim tax I say I already paid?
The assessment was upheld. A restaurant and entertainment venue was audited and contested three items -- all lost. (1) POS system: the venue bought a point-of-sale package bundling tangible equipment,…
We cut, bend, and shear metal for customers. Does that make us a manufacturer that can buy equipment exempt from Virginia sales tax?
The assessment was upheld -- the manufacturing exemption was properly denied. A steel and metals retailer-wholesaler claimed the exemption for cutting, bending, and shearing equipment, and the Departm…
As a manufacturer, can I buy tooling made for a specific customer without paying Virginia sales tax, and then hand that tooling over to the customer tax-free?
Both steps are tax-free, the Department ruled. A Virginia packaging manufacturer can (1) buy customer-specific tooling and dies -- cutting dies, printing plates -- exempt under the manufacturing exemp…
I've lived and worked abroad for years but kept a Virginia driver's license, voter registration, and a couple of properties. Am I still a Virginia resident for income tax?
The assessments were abated -- the taxpayer successfully changed his domicile from Virginia to a foreign country ("Country A") before 2019, so he owed no Virginia income tax for 2019 or 2020. Changing…
How long do I have to ask Virginia to reconsider a final determination, and can I get reconsideration by re-arguing the same points?
Too late -- the assessment stands. A Virginia dealer asked the Department to reconsider a determination that had upheld its sales and use tax assessment (the dealer hadn't provided enough records to e…
My customers bought for resale, but I collected their exemption certificates late -- some after the audit started. Will Virginia still honor them?
Partly upheld, partly reduced -- and how each certificate fared turned entirely on WHEN it was received and whether the buyer could be verified. A tobacco distributor tried to knock out an audit asses…
Virginia says IRS data shows I should have filed a return, but I think I lived in another state. What happens if I don't respond to the Department's questions?
The assessment was upheld -- but with a final 30-day chance to fix it. The Department got IRS data suggesting this taxpayer should have filed a 2020 Virginia return; he hadn't, and when asked for info…
The Department issued a bigger second assessment after my audit waiver expired, and it won't drop a sampled sale where the customer paid the tax. Are either of those right?
Mixed -- the taxpayer won a refund on the late second assessment but lost the sampling argument. An engineering firm was audited (Oct 2018-Sept 2021) after the auditor found its sales were sourced to …
My resale certificate is undated, and for another customer I never collected tax but they say they paid it. Will Virginia honor either?
Mixed result -- one customer's exceptions removed, the other's upheld. A specialty coffee roaster was audited and assessed on sales where it hadn't collected tax or obtained an exemption certificate. …
Is post-production storage and loading equipment 'machinery and tools used in manufacturing' subject to Virginia's local M&T tax, or is it exempt because production is already finished?
No — the equipment escaped the local Machinery & Tools (M&T) tax. A limestone quarry that also makes lime products appealed a county's M&T assessment on three 'lime load-out' assets used to store and …
My locality treated a phone call as my BPOL tax appeal — is that a valid local appeal, and can the state Tax Commissioner still hear my case?
A phone call is NOT a valid local appeal, so the Department still had no jurisdiction to decide the case on the merits — but, on reconsideration, it gave the taxpayer a fresh two-month window to file …
As a veterinary supplier, are the animal vaccines and the regenerative medical devices I sell to veterinarians exempt from Virginia sales and use tax?
Split result. Animal vaccines that veterinarians buy and administer ARE exempt from Virginia sales and use tax, but regenerative medical devices are NOT. Vaccines qualify because Virginia exempts a ve…
I didn't keep my restaurant's register tapes, and the auditor estimated my tax. Can I still knock it down by claiming exempt nonprofit sales and that my prices included the tax?
The estimated assessment was upheld -- the restaurant's missing records sank every argument. A restaurant with incomplete books was audited (April 2019-March 2022); because it hadn't kept its cash-reg…
I paid Virginia sales tax by mistake on exempt purchases and later got a use tax audit bill. Can I credit that overpaid tax against the audit, and what if the vendor is gone?
No — the audit assessment was upheld and both the credit and the refund were denied. A technology-services company was audited and assessed use tax on untaxed purchases; during the audit it asked for …
Are the turbines, cables, foundations, and software a contractor buys to build an offshore wind farm exempt from Virginia sales and use tax under the manufacturing exemption?
Mostly yes. This is an advisory ruling for a contractor building an offshore wind farm about 24 nautical miles off Virginia's coast (in federal waters) that it will transfer to a utility once complete…
If a marketplace facilitator already collected Virginia sales tax on my sales, can I still get a refund of tax I also remitted — even if I file the claim on the last day of the three-year deadline without the amended return?
No — the refund was denied on a strict deadline technicality, even though the seller appeared to have paid twice. An out-of-state dealer sold tools to Virginia customers through a marketplace facilita…
Which of my factory purchases qualify for Virginia's manufacturing exemption — and can the Department waive interest on tax I should have collected?
A mixed result, remanded. A metal fabricator audited for 2017-2020 challenged the sales/use tax on two welding machines and 80% of two forklifts, and asked the Department to waive interest on tax it f…
I took an out-of-state job for two years, then moved back to Virginia — was I a Virginia resident the whole time for income tax?
Yes — he never abandoned his Virginia domicile, so he was taxable as a Virginia resident for 2020 (with credit for the other states' tax). A Virginia domiciliary took a job in 'State A' in February 20…
I moved to another state years ago but kept voting in Virginia and renewing my Virginia driver's license — am I still a Virginia resident for income tax?
Yes — he stayed a Virginia domiciliary resident, so his income was taxable in Virginia (though he gets credit for the other state's tax). A retiree left Virginia in 2011, moved to 'State A' in 2014, b…
My pension contributions were taxed by another state before I moved to Virginia — can I subtract part of my pension payments on my Virginia return, and how do I compute it?
Yes — the retiree qualifies for Virginia's retirement income subtraction, and because his pension pays fixed monthly annuity payments he must use the federal 'simplified method' to compute how much of…
Can back-end rebates from a component manufacturer reduce the 'original cost' of my equipment for Virginia's local business tangible personal property (BTPP) tax?
Yes — the rebates reduced the taxable cost basis, and the taxpayer largely won (remanded for verification). A data-center operator bought server racks from 'Rack Sellers' and separately received cash …
I collected Virginia sales tax that I think was exempt for research and development — can I get a refund from the Department before I pay my customer back?
No — the refund was denied. An automation company built a prototype robotic tote-sorting system for a retailer's Virginia warehouse and collected/remitted Virginia sales tax on the components, labor, …
My diagnostic lab was denied a Virginia sales tax refund on reagents for January 2017 — do reagents qualify for the medicines and drugs exemption?
No — the refund was denied. This is one of four materially identical April 2025 rulings (P.D. 25-54 (the full write-up), 25-60, and 25-61) in which an operator of medical diagnostic laboratories in Vi…
My diagnostic lab was denied a Virginia sales tax refund on reagents for 2016 — do reagents qualify for the medicines and drugs exemption?
No — the refund was denied. This is one of four materially identical April 2025 rulings (P.D. 25-54 (the full write-up), 25-60, and 25-62) in which an operator of medical diagnostic laboratories in Vi…
My diagnostic lab was denied a Virginia sales tax refund on reagents for 2014-2015 — do reagents qualify for the medicines and drugs exemption?
No — the refund was denied. This is one of four materially identical April 2025 rulings (P.D. 25-54 (the full write-up), 25-61, and 25-62) in which an operator of medical diagnostic laboratories in Vi…
I didn't give the auditor my records, so Virginia estimated my sales tax from my federal returns — can the estimate itself be challenged as overstated?
Partly — the estimate itself was justified, but the Department found the auditor's own methodology flawed in two of three areas even though the taxpayer proved nothing. A Virginia dealer failed to pro…
Virginia assessed me income tax based on IRS data, but I didn't live or work in Virginia that year — isn't saying so enough to cancel the assessment?
No — the assessment was upheld because the taxpayers never backed up their claim. IRS information suggested a married couple should have filed a 2019 Virginia return; they hadn't, and when the Departm…
I filed an old Virginia return late and asked for the overpayment to be credited forward instead of refunded — does the three-year refund deadline still block it?
Yes — the credit was denied and the resulting assessments were upheld. A taxpayer (now deceased) filed his 2016 Virginia return on August 13, 2020, asking that the overpayment be CREDITED as an estima…
My spouse moved to another state for work and voted and got licensed there while I stayed in our Virginia home — are we both still Virginia residents?
Split decision — the husband successfully changed his domicile to State A, but the wife, who never left Virginia, remained a Virginia resident. The husband took a job in State A in December 2019, inte…
My tax software wrongly claimed a Virginia credit for D.C. tax my commuting spouse never owed — can the assessment be abated because it was a software error?
No — the assessment stands. A Virginia couple's 2021 joint return claimed a credit for tax paid to the District of Columbia because the wife commuted to work there. But D.C. generally cannot tax nonre…
Are the reagents a medical diagnostic laboratory buys to test blood and urine specimens exempt from Virginia sales tax under the medicines and drugs exemption?
No — the refund was denied. An operator of medical diagnostic laboratories in Virginia sought a sales and use tax refund for the period February 2017 through December 2018, including tax it had accrue…
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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.