Virginia Administrative Code
Title 23 - TAXATION
Agency 10 - DEPARTMENT OF TAXATION
Chapter 120 - Corporation Income Tax
Section 23VAC10-120-240 - Motor carriers; apportionment
Universal Citation: 3 VA Admin Code 10-120-240
Current through Register Vol. 41, No. 3, September 23, 2024
A. In general.
1. Motor carriers do not use the three factor
formula to apportion Virginia taxable income but instead apportion solely on
the basis of vehicle miles traveled. The ratio is vehicle miles in Virginia to
vehicle miles everywhere.
2.
Foreign source income is excluded from Virginia taxable income. However, income
from vehicle miles traveled in a foreign country is not one of the categories
of foreign source income qualifying for exclusion. Therefore, all income from
such vehicle miles is included in Virginia taxable income and such vehicle
miles are included in the denominator, but not the numerator.
3. "Motor carrier" means all corporations
licensed by the Interstate Commerce Commission or the Virginia State
Corporation Commission as motor carriers of property or passengers which use
the highways of Virginia.
4.
a. "Vehicle miles" means miles traveled on a
scheduled route or, in any case, while carrying property or passengers for a
charge. A scheduled route is any route for which the motor carrier has been
granted operating authority by the Interstate Commerce Commission, State
Corporation Commission or similar agency. The miles traveled by all vehicles
operated by the taxpayer shall be included, regardless of whether they are
owned or leased by the taxpayer.
b.
Vehicle miles shall not include travel for repairs or service whether the
vehicle is normally used for carrying property or passengers or is normally
used to service such vehicles.
B. Exception.
1. A motor carrier shall not be subject to
Virginia income tax if the corporation:
a.
neither owns nor rents real or tangible personal property in Virginia except
vehicles, and
b. the vehicle miles
in Virginia are not more than 5% of the total vehicle miles annually traveled
in all states, and
c. the
corporation either:
(i) has made no pick-ups
or deliveries in Virginia and has traveled less than 50,000 miles in Virginia,
or
(ii) has made no more than
twelve round trips into Virginia.
2. A motor carrier which is not subject to
Virginia income tax because of this exception may still be required to file a
Virginia income tax return reporting its qualification for the
exception.
Statutory Authority
§§ 58.1-203 and 58.1-417 of the Code of Virginia.
Disclaimer: These regulations may not be the most recent version. Virginia may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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