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 a Virginia individual income tax refund claim for the 2015 tax year timely when the amended Virginia return was filed more than three years after the original return but within one year of a related amended federal return?
YES, the refund was allowed -- although the Department initially denied it as filed too late, the amended Virginia return was actually timely because it was filed within one year of the taxpayer's ame…
Can Virginia uphold an estimated sales and use tax assessment against a contractor who refused to give the auditor its purchase records?
YES, the estimated assessment was upheld as properly issued -- the Taxpayer, a real property contractor, refused to provide purchase records during the audit, so the Department was authorized under Va…
Can a taxpayer still get a refund of a 2014 Virginia income tax overpayment if the return claiming it wasn't filed until December 2019?
No -- the refund was time-barred. The Taxpayers had three years from the original May 1, 2015 due date (since they never validly elected the extension by filing or paying on time) to claim a refund, s…
What does Virginia Ruling of the Tax Commissioner P.D. 21-17 conclude about an appeal of a sales tax audit assessment filed after the 90-day deadline, where the taxpayer also asked for a conference to submit more records?
NO relief was granted -- the Taxpayer's appeal was filed on May 18, 2020, well after the December 30, 2019 deadline set by the 90-day limit in Va. Code § 58.1-1821, so it was barred as untimely, and s…
Did an IT company's refund claim for aircraft and retail sales and use tax paid on its March 2008 return succeed?
No -- the Tax Commissioner upheld the denial. The Taxpayer could not document that it had actually overpaid aircraft sales and use tax, and its retail sales and use tax refund request for the March 20…
What does Virginia Ruling of the Tax Commissioner P.D. 20-183 conclude about Tangible: Administration - Jurisdiction, Statute of Limitations for Refunds Classification of Property: General v. Manufacturing - Food Service?
The Tax Commissioner ruled the Taxpayer's 2012 refund claim was time-barred under the three-year limit in Va. Code § 58.1-3990, and remanded the manufacturer-vs-business-service classification questio…
State Tax Ruling
No relief: the Tax Commissioner ruled the taxpayer's appeal of a 2010 individual income tax assessment was barred because it was filed more than six years after the 90-day deadline in Va. Code § 58.1-…
If Virginia returns my sales tax refund request because it was submitted on a CD, does the three-year filing deadline still count against me?
Granted in part: the Tax Commissioner found the Taxpayer's refund requests were timely filed in December 2015, even though the Department had returned them because they were submitted on a CD, and gav…
Can a taxpayer still appeal a converted sales and use tax assessment after the 90-day appeal deadline has passed, and what options remain if they cannot afford to pay it?
No. Virginia Code § 58.1-1821 gives a taxpayer only 90 days from the date of an assessment to apply for relief, and an appeal filed years after that deadline is barred regardless of its merits. A taxp…
Can a taxpayer void a six-year use-tax audit and challenge a one-year sample period used to project the assessment, and how does a taxpayer request relief from an assessment based on financial hardship?
No on both audit challenges: the Tax Commissioner upheld the six-year audit period (extended from three years because the contractor had never registered for or filed consumer use tax) and upheld the …
I disagree with the Department's determination denying my corporate income tax refund claim -- can I still get it reconsidered if my request comes in more than 45 days after the determination letter?
No -- Virginia gives a taxpayer only 45 days from the date of a final determination letter to request reconsideration, and that deadline is enforced strictly. Here, the Department's determination lett…
If a taxpayer timely files a Virginia amended return but waits years to send the Department the IRS's acceptance letter, is the refund still barred by the statute of limitations?
No. The Tax Commissioner ruled that because the taxpayer's amended Virginia return was filed in October 2016 -- well within the three-year limitations period for refund claims under § 58.1-1823 -- and…
If the IRS audits me and increases my federal income, what must I do in Virginia, and what happens if I don't report the change?
You lose. When the IRS audits and increases your federal taxable income, Virginia law (Va. Code § 58.1-311) requires you to report that change by filing an amended Virginia return within one year of t…
When a taxpayer's refund claim spans several tax years, how far back can a Virginia locality go, and is a fuel-blending business a manufacturer or a processor for machinery and tools tax purposes?
A locality cannot issue a refund for a tax year once more than three years have passed since the last day of that tax year, so the Department had no jurisdiction over the earliest year in this refund …
Could a nonresident recover Virginia income tax withheld from 2014 wages when the first refund claim was filed after the three-year deadline?
No. The 2014 return was due May 1, 2015, so a Form 763-S or other refund claim had to be filed by May 1, 2018. The taxpayer did not claim the withholding until 2019, after the limitation period expire…
Is a corporation's NOL carryback refund time-barred by a late-submitted federal Form 870 when the Department never finally denied the original, timely refund claim?
Yes, the refund is allowed -- the corporation won. It timely filed a 2008 return with a net operating loss and, in October 2012, timely applied to carry the loss back to 2006 and 2007. The Department …
Can individuals get a 2005 Virginia refund from a 2008 casualty-loss carryback when the amended return was filed years after the federal change and the three-year limit?
Denied -- the refund is time-barred. The taxpayers suffered a 2008 casualty loss from a Ponzi scheme and, working with the Department, learned the loss had to be carried back three years (to 2005) und…
Can Virginia estimate a use tax assessment from a contractor's income tax returns, and use a six-year period, when the contractor did not provide records or file sales tax returns?
Upheld, with one more chance. A real property contractor with a Virginia location never filed Virginia sales and use tax returns and did not respond to the auditor's repeated requests for records or t…
Can a corporation reduce late-payment penalty and interest by carrying back a later net operating loss, and is a two-year-late appeal timely?
Denied as untimely. A corporation filed its 2016 return but did not pay, so the Department assessed the tax plus a late-payment penalty and interest in November 2017. The company later carried a 2017 …
Can taxpayers reopen assessments after exhausting appeals, and do photographs prove the value of donated items for a charitable deduction?
Denied across the board. On reconsideration of P.D. 18-144, the Commissioner upheld every assessment. The 2010 year had already been decided in prior determinations and would not be revisited. The 201…
Was a 2019 amended Virginia return claiming a 2014 refund timely when another state had just assessed the taxpayer for 2014?
Yes. The ordinary three-year refund period had expired in May 2018, but Va. Code § 58.1-1823 A (v) gave the taxpayer one year after another state's final determination to amend the Virginia return. Sh…
Could medical disability, an assessment-period waiver, or an IRS credit-transfer notice extend Virginia's three-year deadline for refunds claimed on late original returns?
No. Virginia required a fiduciary or agent to file for a disabled taxpayer and did not toll the refund period. Assessment waivers did not extend original-return refund claims, and the IRS notice did n…
Could Virginia assess the bank's 2013 franchise tax late, include minority interests in 2014 capital, and deny subsidiary-surplus deductions and credit carryovers?
No, not as audited. The Department held the 2013 bank franchise tax assessment untimely. For 2014, it reversed the addition of noncontrolling minority interests because those interests were not among …
Could a corporation obtain Department review of 2015, 2016, and 2018 county business-personal-property assessments after filing its local appeal in November 2018 and adding new software and equipment issues?
Only partly. The 2015 and 2016 local appeals were filed after their one-year deadlines, so the Department lacked jurisdiction over those years. The 2018 appeal was timely, but because the taxpayer rai…
Does a Virginia S corporation need a special limitations extension while another state audits income that may change its shareholders' Virginia credit?
No special extension was needed. Virginia generally allows amended returns within three years, but Va. Code § 58.1-1823(A)(v) separately gives one year after another state's final determination to cla…
Can Virginia issue a 2013 income-tax refund claimed on a return filed after the three-year deadline because the taxpayer relied on an accountant?
No. A Virginia overpayment may be refunded only if the Department discovers it or receives the taxpayer's written claim within three years after the original timely-return deadline. The 2013 return wa…
Could a taxpayer receive the overpayment shown on a June 2018 original 2014 return after Virginia separately refunded payment of a mistaken nonfiler assessment?
No. Virginia discovered that the employer had failed to report tax withheld from employees, so it refunded the amount the taxpayer had paid to satisfy the resulting nonfiler assessment. But the separa…
Could Virginia extend the three-year refund deadline for tax paid after the 2013 rate increase when the purchaser did not know the refund process?
No. The medical provider's March 2013 equipment contract and July 2013 delivery fit the Department's transition window for the July 1 rate increase, but any refund still had to be requested within the…
Did illness or disability suspend Virginia's three-year deadline when a taxpayer filed a refund return 27 days after the deadline?
No. A 2014 Virginia refund return had to be filed by May 1, 2018, three years after its original May 1, 2015 due date. The taxpayer filed on May 28, 2018. Although the return eliminated Virginia's ear…
Which BPOL assessments could a taxpayer still challenge when the county issued late and supplemental assessments during a local appeal?
The county had to abate the 2013 BPOL assessment because it was issued outside the three-year assessment period. The taxpayer's appeal time for the original 2015 and 2016 assessments had expired, so t…
Does a notice saying a taxpayer plans to appeal preserve Virginia's 90-day tax-appeal deadline if it gives no grounds or supporting facts?
No. A complete Virginia administrative appeal had to state the taxpayer's grounds and relevant facts within 90 days after the assessment was mailed. The taxpayer's letter was only a notice of intent, …
Does a county's later partial reduction of a BPOL assessment create a new appealable event and restart the local appeal deadline?
No. The appealable events were the original 2013 and 2014 assessments, not the county's November 2016 partial reductions. Because the taxpayer did not file local appeals by December 31, 2014 and Decem…
Could taxpayers obtain a refund on a 2010 Virginia return first filed in October 2014 by measuring the deadline from an extended due date?
No. Because the original 2010 Virginia return was filed after the extended due date, the extension was not valid for measuring the refund period. The taxpayers had three years from the original May 2,…
Was a Virginia sales-tax audit assessment untimely, and could a subsidiary be assessed for its parent's sale of restaurant assets?
The audit assessment was timely because Virginia delivered the notice to the Postal Service before the extended deadline. But the restaurant asset-sale portion was abated because the parent—not the as…
Could Virginia decide BPOL payroll-apportionment disputes when the 2012 appeal was late and the county had not issued a valid final determination for later years?
No. The 2012 administrative correction request was filed after its three-year deadline and used a route reviewable in circuit court, not by the Department. For 2013 through 2016, the county's letter l…
Could taxpayers recover old payments caused by a preparer's failure to claim withholding credits?
No. Virginia refunded only payments still within the statutory period and said it had no discretion to refund older payments. The appeal was also incomplete, and reliance on a preparer did not relieve…
Were Virginia's 2011 and 2012 individual income tax assessments issued within the statute of limitations?
The 2011 assessment was too late and was abated because Virginia found no fraudulent intent that would keep the assessment period open. The 2012 assessments were timely because they were issued within…
Did financial disability or a timely estimated payment extend Virginia's deadline for a 2012 refund?
No. Virginia said federal financial-disability tolling did not alter its refund limitation period, and making a timely estimated payment did not preserve a refund claimed on a late return. The prior d…
Could a deceased taxpayer's successor receive a 2013 Virginia refund claimed after the three-year deadline?
No. The 2013 return had to be filed by May 1, 2017, to claim a refund, but the successor filed it on November 13, 2017. Virginia said it had no discretion to waive the expired three-year limitation pe…
Did employer error extend the deadline for a nonresident to reclaim 2011 and 2012 Virginia withholding?
No. Excess withholding remained subject to Virginia's three-year refund limitation regardless of whether the employer caused the error. The taxpayer filed both Form 763-S claims in March 2017, after t…
Could a taxpayer recover a 1999 overpayment by filing the Virginia return in 2016?
No. The 1999 return needed to be filed by May 1, 2003 under the general refund rule or by October 2007 under the two-year post-payment exception. Filing in August 2016 was too late under both periods,…
Could a contractor obtain a transitional sales-tax refund for purchases outside the three-year claim period?
No. The contractor filed its refund claim on November 30, 2016, so only purchases made in November 2013 or later were eligible. The Department found no applicable exception allowing a refund for earli…
Did a corporation's brief timely letter preserve a refund claim when its detailed amended return came later?
Yes. The timely letter identified the corporation, tax type, year, requested refund, and failure to claim a foreign-source-income subtraction. Because the assessment and payment dates were determinabl…
Could taxpayers carry forward excess prepaid-tuition contributions even though they claimed no deduction in the contribution year?
Yes, for the amount that exceeded the annual deduction limit for each contract. Failing to claim the available 2011 deduction did not bar legitimate excess contributions from carrying forward to 2012 …
Could illness and problems with tax preparers extend Virginia's three-year deadline for a 2010 refund claim?
No. The 2010 return claiming a refund was filed in November 2014, after the May 2, 2014 deadline. Virginia law provided for an agent to file for a disabled taxpayer but did not suspend the limitations…
Did Virginia's seven-year collection limit bar old income tax liabilities for 1998 and 2000 through 2002?
No. Paying the 2000 through 2002 assessments through Virginia's amnesty program waived the taxpayer's appeal rights for those years. The 1998 liability was assessed in 2005, when a 20-year collection …
Was a land-preservation-credit assessment timely when mailed before the deadline but adjusted years later?
Yes. Department records showed the assessment was mailed to the taxpayers' last known address before the May 2012 deadline. The 2017 adjustment after the credit was revalued did not alter the original…
Was a refund request timely when the taxpayer sent Virginia the IRS reversal within four months of the federal change?
Yes. The taxpayer had one year after the final federal change to request a Virginia refund and supplied the IRS reversal within four months. That documentation was sufficient, so Virginia ordered a re…
Was a 2008 assessment untimely because the taxpayers said they never received it and the amount was adjusted years later?
No. Department records showed that the assessment was mailed to the taxpayers' last known address within the three-year period. Mailing made the assessment timely even if the taxpayers did not receive…
Could taxpayers obtain review of a 2011 refund after the ordinary three-year period when they promptly reported a final federal change?
Yes. Although the ordinary refund period had expired, Virginia law gave the taxpayers 60 days after the final federal determination to request a refund. They supplied the IRS letter within 30 days, so…
Could a late original return serve as a timely protective refund claim after the taxpayer paid a Virginia nonfiler assessment?
Yes. The ordinary deadline for a 2011 refund had expired, and the later appeal itself was six days too late. But the original return had been filed within three years of the paid assessment and could …
Could a cable company obtain Department review of converter-box BTPP assessments more than four years after the city's final determination?
No. The city showed that it issued the final local determination in April 2013, while the taxpayer did not appeal to the Department until September 2017. The taxpayer also had not used the statutory r…
Was a gasoline retailer's BPOL tax based on gallons sold or gross receipts, and was its 2013 refund timely?
Gross receipts. Virginia BPOL tax applied to the retailer's total gasoline-sale receipts, not the number of gallons sold. The February 2017 refund request for 2013 also came more than three years afte…
Could a taxpayer receive a 2012 Virginia income tax refund when the original return was filed in December 2016?
No. The 2012 return had to be filed by May 2, 2016 to claim the overpayment, but the taxpayer filed it in December 2016. Virginia's three-year refund statute gave the Department no discretion to pay t…
Could alleged oral advice that a taxpayer had five years to file preserve a late 2012 Virginia refund claim?
No. The original 2012 return was filed in December 2016, after the May 2, 2016 refund deadline. The alleged five-year advice was not documented in writing, and Va. Code § 58.1-1835 applies to assessme…
Was a March 2017 Virginia estate tax refund claim timely after the IRS accepted the estate's Form 890-AD in December 2015?
No. The federal change became final when the IRS accepted Form 890-AD on December 7, 2015, so the estate had until December 7, 2016 to amend its Virginia return. Filing in March 2017 was late; the lat…
Did medical disability extend Virginia's deadline to claim a 2012 income tax overpayment credit?
No. Virginia law did not suspend the three-year refund period for mental or physical disability, so a January 2017 return was too late to claim or carry forward the 2012 overpayment.
Could a Virginia resident receive credits for tax paid through composite nonresident returns, and was Virginia's assessment timely?
Yes, with state-by-state documentation. Virginia found the taxpayer entitled to credits for tax paid through composite returns in Hawaii, Mississippi, and Montana. The April 21, 2017 assessment was st…
Could a taxpayer obtain review of a late refund claim after fully paying a Virginia assessment?
Yes. Although the ordinary refund period for the late 2010 return had expired, the taxpayer had fully paid the March 19, 2014 assessment and pursued the claim within three years. Virginia treated the …
Could taxpayers dispute IRS changes to federal adjusted gross income through a Virginia tax appeal, and was the resulting assessment timely?
No. Virginia matched the taxpayers' federal adjusted gross income to the IRS record and would not reconsider the federal audit. The January 2017 assessment was timely before the May 1, 2017 general de…
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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.