Document Number
Tax Type
Individual Income Tax
Order solicitation in Virginia
Persons Subject to Tax
Date Issued
October 31, 1988

Re: Ruling Request/Individual Income Tax


This will reply to your letter dated September 1, 1988 in which you seek to know whether your client is liable for Virginia individual income tax based on his business activity in the state.

Your client is a sole proprietor publisher located in the District of Columbia. All subscriptions are currently sold by direct mail and other forms of advertising media. Your client is considering entering into a contract with an independent sales representative, who resides in Virginia, to solicit orders for sales of his product.

The sales representative will be independent and may represent any other products or lines of products except those of a specific company which is a direct competitor of your client. The sales representative will represent your client's product at trade shows, and by making telephone calls and personal visits to prospective customers. All orders and subscriptions will be filled from and serviced by the District of Columbia location. Printing is contracted for and performed by an independent printing firm in Virginia. The product is shipped by UPS from a location in Maryland.

Your client resides outside of Virginia and will not enter into any leases of or ownership of real property in Virginia or pay salaries or wages to any individual for services in the state other than the above independent contractor. There is no warehouse or storage of the Product in Virginia.

Based upon the above information, you wish to know whether your client will become liable for filing an individual income tax return in Virginia if he enters into the contemplated contract.

Based on the facts presented, your client does have income from Virginia sources because significant quantities of tangible personal property are sold and delivered into Virginia on a regular and continuing basis. However, federal law prohibits a state from imposing a net income tax on income derived within a state from interstate commerce, if the only business activity within the state is solicitation of orders for the sale of tangible personal property filled by shipment or delivery from places outside the state after orders are sent outside the state for approval or rejection. See Public Law 86-272, 15 U.S.C.A. §§381-384

Because your client's activity in Virginia as set forth above does not exceed the minimum activity required by federal law, he will not be required to pay Virginia individual income tax on Virginia source income and will not be required to file a nonresident income tax return.

If you have any further questions, please do not hesitate to contact the department.


W. H. Forst
Tax Commissioner

Last Updated 08/25/2014 16:46