Pass-Through Entities Are Not Subject to the Virginia Minimum Tax on Telecommunications Companies

September 12, 2008

In an opinion released today, the Supreme Court of Virginia ruled that non-corporate pass-through entities are not subject to the minimum tax imposed upon telecommunications companies. The case is entitled as Virginia Cellular LLC v. Virginia Department of Taxation, Supreme Court of Virginia, Record No. 071895 (September 12, 2008). The Court held that only telecommunications companies formed as corporations are subject to the minimum tax. Partnerships, limited partnerships, limited liability companies, and other pass-through entities are not subject to the minimum tax.

If you are a telecommunications company formed as a non-corporate pass-through entity and have paid the minimum tax imposed upon telecommunications companies to Virginia, you may be eligible for a refund of Virginia taxes. Please contact either of the undersigned at McGuireWoods immediately so we can help you determine if you are eligible for such a refund.

In addition, McGuireWoods offers a full range of state and local tax planning and litigation services to taxpayers of all types and sizes, both public and privately held. Our state and local tax attorneys are highly versed in all aspects of state and local tax planning, as well as all aspects of tax compliance, including civil audit and general and procedural matters before local and state tax authorities. We regularly represent clients in the preparation of private letter ruling requests, administrative tax protests, preparation of offers in compromise for outstanding tax assessments, and offer the complete range of trial and appellate state and local tax litigation services frequently demanded by cutting edge taxpayers. We would be pleased to discuss any interest you may have in a Virginia tax issue. Please do not hesitate to contact us at your convenience.