State and Local Taxation

2020 Virginia Department of Taxation Rulings (Part 3)

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On its website, the Virginia Department of Taxation has released several rulings and appeal decisions. For the final part of 2020, there were several numerical gaps. Those gaps led me to wait for this update to see if those rulings would be released after the Virginia General Assembly was finished with its business as that takes up much of the effort from the Virginia Department of Taxation each year. However the numerical gaps were not filled which is probably due to something explainable like taxpayer confidentiality. As 2021 rulings are now being released, it is very likely that the 2020 rulings have all been released. So without further ado, here is a brief summary of some of the more notable rulings and appeal decisions from the end of 2020.

  • Public Document 20-134 is helpful as it talks about differences between manufacturers and processors for purposes of the local business, professional, occupational, and license tax and the local business tangible personal property tax. There is nothing new in this ruling, but it is useful to know the differences.
  • In Public Document 20-169, the taxpayer made the mistake of following regulations that were not updated by the Tax Department following a 2005 change in the law. While there is no disagreement that statutory changes trump regulations, is it too much to ask that regulations are kept up to date?
  • Public Document 20-190 is an example of why it is important to hire a tax professional that is familiar with this appeal process. Here, a restaurant that provides catering protested items included in the auditor’s sample yet did not provide documentation on why those items should not be included in the sample. The restaurant made other (potentially dubious) arguments but did not provide any documentation even when it was requested. Just like I stated in my last blog on rulings, the taxpayer has the burden of proving that an assessment is incorrect. When shouldered with that burden, it doesn’t make any sense to ignore document requests. Someone that is familiar with this appeal process should know that automatically.

Christian Tennant is a Virginia tax attorney and former employee of the Virginia Department of Taxation. Mr. Tennant regularly speaks and writes on Virginia taxation. In his private practice he advises and represents businesses and individuals on a range of tax matters.

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