Virginia

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The Court of Appeals of Virginia, upholding the trial court’s decision, held that the successor to The C. F. Sauer Company could elect the manufacturer’s apportionment method for the first time on its amended tax return. By doing so, the court (preliminarily*) paved the way for qualifying taxpayers to take a wait and see approach…

The Supreme Court of Virginia recently upheld a circuit court decision invalidating a county’s plan to claw back tax refunds because it violated the state constitution’s uniform taxation requirement.

The Isle of Wight County changed the valuation methodology for its machinery and tools tax (“M&T tax”), resulting in approximately $5.6 million in refunds for tax…

In an opinion published on September 9, 2022, the Circuit Court of the City of Richmond held that a telecommunications equipment company was entitled to a sales tax refund on its sales of software, equipment, and related services sold to a telecommunications company.

Under Virginia law, software delivered electronically via the Internet is exempt from…

Virginia’s Governor signed H.B. 1155, which expands the sales tax exemption for amplification, transmission and distribution equipment to now include “network equipment” that is used to provide Internet service. The expanded exemption defines a “network” to include modems, fiber optic cables, coaxial cables, radio equipment, routing equipment, switching equipment, a cable modem termination system,…

Following a taxpayer’s appeal of a local Virginia county (County) Business, Professional and Occupational License (BPOL) tax assessment, the Virginia Tax Commissioner held that the taxpayer’s remote employees’ payroll was properly excluded from the numerator of the payroll apportionment calculation. The taxpayer was headquartered out of state and maintained offices worldwide, including an office in…

The Virginia Tax Commissioner ruled that purchases of software and software maintenance were subject to use tax, where the taxpayer was unable to prove that the software was delivered electronically and exempt. Although the taxpayer presented correspondence with two vendors that referenced the software and maintenance being only delivered electronically, the taxpayer could not provide

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In Virginia Department of Taxation v. R.J. Reynolds Tobacco Co., the Virginia Supreme Court ruled that the taxpayer was entitled to a corporate income tax refund because leaf tobacco stored in the taxpayer’s Virginia warehouse was not “used” by the taxpayer for purposes of inclusion in its Virginia property factor.

The taxpayer stored leaf…

On August 24, 2021 (released November 2021), the Virginia Department of Taxation (the Department) concluded that a provider of professional and information technology services was entitled to payroll apportionment of gross receipts for a local Business, Professional and Occupational License Tax (BPOL Tax) refund claim. Virginia localities may impose a BPOL Tax on the gross…

Following a taxpayer’s assessment appeal, the Virginia Tax Commissioner determined that “easy return label” and “merchandise logo charges” were subject to Virginia sales tax.

Easy return labels
The taxpayer was a retailer of products sold online and through catalogs. The taxpayer offered its customers the option of returning merchandise using an “easy return label,” which…

The Virginia Department of Taxation issued a private letter ruling on May 25, 2021, determining that a man who relocated out of Virginia as a result of a new position with his employer, but retained his Virginia driver’s license and motor vehicle registration in order to facilitate a potential return to the state in the…