Virginia's Use Deduction Ceiling Splits at January: Two IRS Rates, One Odometer
A Virginia lemon law buyback is the contract price minus one subtraction, and that subtraction is the only part of the arithmetic the statute caps in cents. The cap is not a Virginia number. It is half of an Internal Revenue Service figure that changes every January, so one odometer reading can sit under two ceilings at once.
For 2026 the IRS set the business standard mileage rate at 72.5 cents per mile, so the Virginia ceiling is 36.25 cents. For 2025 the rate was 70 cents and the ceiling 35 cents. A car delivered in August 2025 and first reported defective in March 2026 has miles on both sides of that boundary, so a worksheet pricing the whole 9,400-mile count at one ceiling reaches a different total than one that splits it by year. This piece follows the 36.25-cent figure to its source.
The cap Virginia borrows from the IRS
The subtraction lives in two places. The refund formula is in Code of Virginia Section 59.1-207.13 (Nonconformity of motor vehicles), Virginia's Legislative Information System, and the ceiling on it is buried in the definitions section, Code of Virginia Section 59.1-207.11 (Definitions), Virginia's Legislative Information System. The definition reads in full:
“‘Reasonable allowance for use’ shall not exceed one-half of the amount allowed per mile by the Internal Revenue Service, as provided by regulation, revenue procedure, or revenue ruling promulgated pursuant to Sec. 162 of the Internal Revenue Code, for use of a personal vehicle for business purposes, plus an amount to account for any loss to the fair market value of the vehicle resulting from damage beyond normal wear and tear, unless the damage resulted from nonconformity to any warranty.”
Three things in that sentence do work. First, the figure caps an allowance rather than setting it; the words are “shall not exceed.” Second, the IRS publishes more than one per-mile amount, and the definition picks one of them by naming business purposes. In Internal Revenue Service Notice 2026-10 (2026 Standard Mileage Rates), the business figure is 72.5 cents, the medical and moving figure is 20.5 cents, and the charitable figure is 14 cents. Half of the business figure is 36.25 cents; half of the charitable figure would be 7 cents. The phrase “for use of a personal vehicle for business purposes” closes that fork.
Third, the ceiling covers a second item besides mileage: “plus an amount to account for any loss to the fair market value of the vehicle resulting from damage beyond normal wear and tear, unless the damage resulted from nonconformity to any warranty.” The cap is therefore two components, not one: the half-rate figure against the miles, plus that loss in value, and the trailing clause takes warranty-caused damage back out. A worksheet that multiplies miles by 36.25 cents has computed the first component only, so the figures below are mileage ceilings rather than whole caps.
Notice 2026-10 states that “the portion of the business standard mileage rate treated as depreciation is 26 cents per mile for 2022, 28 cents per mile for 2023, 30 cents per mile for 2024, 33 cents per mile for 2025, and 35 cents per mile for 2026.” Virginia's half-rate ceiling for 2026, 36.25 cents, sits 1.25 cents above the depreciation portion of the very rate it halves. For 2025 the gap was 2 cents, with a 35-cent ceiling against a 33-cent depreciation portion. The two figures are converging, and they are not the same figure.
Two rates, one odometer
Take a passenger car delivered on 15 August 2025. By the end of December the odometer reads 5,200. The owner mails a written complaint on 10 March 2026 with the odometer at 9,400, so 4,200 of those miles ran in 2026. The refund worksheet needs a ceiling for the use allowance, and two readings are available.
The single-rate reading applies the ceiling in force when the refund is computed. Every mile is priced at 36.25 cents, and 9,400 miles produces a ceiling of 3,407.50 dollars. The year-matched reading prices each mile at the ceiling for the year that mile was driven: 5,200 miles at 35 cents is 1,820.00 dollars, 4,200 miles at 36.25 cents is 1,522.50 dollars, and the sum is 3,342.50 dollars. The two readings differ by 65.00 dollars, which is exactly the 5,200 pre-January miles multiplied by the 1.25-cent half of the 2.5-cent rate increase.
Virginia's definition points outward rather than fixing a figure of its own, and it names three kinds of document: regulation, revenue procedure, revenue ruling. A notice is none of the three, so the figure reaches the statute through Revenue Procedure 2019-46, which provides that the IRS publishes the rates “in a separate annual notice.” Those notices date themselves. Notice 2026-10 states that “This notice is effective for: (1) deductible transportation expenses paid or incurred on or after January 1, 2026;” and Internal Revenue Service Notice 2025-5 (2025 Standard Mileage Rates) carries the matching sentence for 2025 with its 70-cent figure. Each notice governs the expenses of its own year, not the expenses computed during its year.
Internal Revenue Service Revenue Procedure 2019-46 adds the operating rule behind those annually published notices: “A taxpayer computes a deduction using the business standard mileage rate on a yearly basis and in lieu of computing the fixed and variable costs of the automobile allocable to business purposes, except as provided in section 4.05 of this revenue procedure.” The phrase “on a yearly basis” points the same way, though section 4.05, which that sentence excepts, was not retrieved: the federal figure Virginia borrows attaches to a year of driving, so a ceiling built on it splits at January too.
A ceiling is a limit, so the 65.00-dollar difference bites only where a proposed allowance is pressed against the cap. It often is, because the cap is the easiest number in the file to compute. Testing a proposed allowance therefore needs the mileage split by calendar year, not one total.
Where the mileage count stops
The per-mile ceiling prices each mile. Section 59.1-207.13 sets how many miles count, and it stops the count at an event rather than at the surrender of the car. Under subsection A 2 the manufacturer must refund “the full contract price, including all collateral charges, incidental damages, less a reasonable allowance for the consumer's use of the vehicle up to the date of the first notice of nonconformity that is given to the manufacturer, its agents or authorized dealer.” The same subsection adds that the consumer keeps “the unconditional right to choose a refund rather than a replacement vehicle and to drive the motor vehicle until he receives either the replacement vehicle or the refund.”
Those two sentences produce a gap that grows on its own: miles driven after the first notice sit outside the allowance, so a dispute that runs a year adds nothing to it. The date of first notice is worth as much argument as the per-mile figure.
That date is defined, and the definition has four triggers. Section 59.1-207.11 provides: “‘Notify’ or ‘notification’ means that the manufacturer shall be deemed to have been notified under this chapter if a written complaint of the defect or defects has been mailed to it or it has responded to the consumer in writing regarding a complaint, or a factory representative has either inspected the vehicle or met with the consumer or an authorized dealer regarding the nonconformity.” A mailed complaint is one trigger, a written response from the manufacturer a second, a factory representative's inspection a third, and that representative's meeting with the consumer or the dealer a fourth. None of the four requires the consumer to know the definition exists.
Return to the worked example with that in hand. Suppose a factory representative inspected the car on 20 January 2026 with the odometer at 7,900, seven weeks before the owner mailed anything. Then 2,700 of those miles ran in 2026, the year-matched ceiling is 1,820.00 plus 978.75, or 2,798.75 dollars, and the earlier date has moved the ceiling down by 543.75 dollars against the March figure. That is the 1,500 miles between the two events priced at 36.25 cents. The consumer's own letter is the trigger that is easiest to date, and on these facts it is the one that costs the most.
What the record has to show
The cap and the cut-off date turn a repair file into a small arithmetic exhibit. Four items carry the weight.
First, the odometer reading at every visit, on the repair order itself, with the date. The allowance needs the reading on the date of first notice, and that reading rarely exists anywhere else. A file of undated invoices cannot produce it, and the same problem defeats the count of repair attempts. An earlier piece on what a repair invoice must show traced where those line items come from in the first place.
Second, the mileage split by calendar year, which means at least one reading near the end of December. Without it, the year-matched ceiling has to be estimated, and an estimate is what the cap exists to prevent.
Third, which notification trigger fired first, with proof of the date. A certified mailing receipt dates a mailed complaint. A factory representative's inspection is dated by the representative's own report, and the consumer may have no copy of it.
Fourth, the presumption facts, since the allowance is reached only once a refund is owed. Section 59.1-207.13 B presumes both a reasonable number of attempts and significant impairment when, during the lemon law rights period, “The same nonconformity has been subject to repair three or more times by the manufacturer, its agents or its authorized dealers and the same nonconformity continues to exist”; when the nonconformity is a serious safety defect repaired one or more times and it continues to exist; or when “The motor vehicle is out of service due to repair for a cumulative total of 30 calendar days, unless such repairs could not be performed because of conditions beyond the control of the manufacturer, its agents or authorized dealers, including war, invasion, strike, fire, flood or other natural disasters.” Subsection E adds a further step: where neither the manufacturer nor a factory representative has been notified of those conditions and one of them already exists, “the manufacturer shall be given an additional opportunity, not to exceed 15 days, to correct or repair the nonconformity. If notification shall be mailed to an authorized dealer, the authorized dealer shall upon receipt forward such notification to the manufacturer.”
Two more dates belong in the same file. Where an informal procedure has ordered a refund, Section 59.1-207.15 B gives a manufacturer “forty days from its receipt of the consumer's acceptance of the decision or from the date of a court order to comply with the terms of the decision.” That clock starts at receipt, so the acceptance and its delivery both need dating, and it is not the federal forty days in 16 CFR 703.5, which run from notification of a dispute to the mechanism and can stretch by a further 7 day period. Section 59.1-207.16 supplies a 12-month alternative deadline for suit.
Numbers to Re-check
Re-check the per-mile ceiling every January. It is 36.25 cents for 2026 miles and 35 cents for 2025 miles, and the next notice will move it again. For 2026 miles the ceiling sits 1.25 cents above the 35-cent depreciation portion of the same rate; for 2025 miles it sat 2 cents above a 33-cent depreciation portion. Both the gap and the pair of figures move each January.
Re-check which of the four notification triggers fired first, because the 543.75-dollar swing in the worked example came from nothing but a change of date. Re-check whether any post-notice mileage has been folded into the allowance, since the statute stops the count at the first notice.
Re-check the two forty-day clocks. Virginia's forty days under Section 59.1-207.15 B run from the manufacturer's receipt of the consumer's acceptance. The federal forty days in 16 CFR 703.5 (Operation of the Mechanism), Office of the Federal Register eCFR run from notification of the dispute to the mechanism, and paragraph e lets that stretch, including “for a 7 day period in those cases where the consumer has made no attempt to seek redress directly from the warrantor.” A separate piece on the federal forty-day limit works through what that federal clock does and does not cover.
Re-check the filing deadline against the rights period, because in Virginia they are the same words. Code of Virginia Section 59.1-207.16 (Action to be brought within certain time), Virginia's Legislative Information System provides that “Any action brought under this chapter shall be commenced within the lemon law rights period,” with a longer alternative where good faith attempts at informal settlement have failed: 12 months from the manufacturer's final action in its dispute settlement procedure if that procedure was used within the rights period, or the original rights period, whichever is longer. The rights period is defined as “the period ending 18 months after the date of the original delivery to the consumer of a new motor vehicle,” and the definition adds that this is “the period during which the consumer can report any nonconformity to the manufacturer and pursue any rights provided for under this chapter.” Subsection C of Section 59.1-207.13 provides that it “shall be extended if the manufacturer has been notified but the nonconformity has not been effectively repaired by the manufacturer, or its agent, by the expiration of the lemon law rights period.” An extension of that period therefore moves the filing deadline with it.
Where this framework does not apply
This is Virginia arithmetic. Other states set the allowance by their own formula, and a piece on how two lemon laws use capitalized cost shows how different the starting figure can be.
The chapter also limits what counts as a vehicle. Section 59.1-207.11 defines “Motor vehicle” as “only passenger cars, pickup or panel trucks, motorcycles, autocycles, self-propelled motorized chassis of motor homes and mopeds as those terms are defined in Sec. 46.2-100 and demonstrators or leased vehicles with which a warranty was issued.” A motor home body outside the self-propelled chassis, and anything not on that list, sits outside this arithmetic entirely.
The ceiling is also not a formula for what the allowance should be. A manufacturer may propose less, a court may award less, and Section 59.1-207.13 G supplies affirmative defenses that can end a claim before any allowance is computed, among them that the nonconformity “is the result of abuse, neglect or unauthorized modification or alteration of a motor vehicle by a consumer.” The 36.25-cent figure fixes only the highest the subtraction may go.
What this piece did not check should bound it further. Virginia Office of the Attorney General and Virginia Department of Motor Vehicles consumer guidance was not retrieved, so no comparison between agency guidance and the statutory text is offered here; if a guidance page prints a different per-mile convention, that conflict stays open. Virginia case law construing “reasonable allowance for use” was not retrieved, and a court may have settled the year-matching question already. IRS notices for 2024 and earlier were not retrieved, so the spread against the depreciation portion rests on two notices. The regulation cited inside Notice 2026-10 returned a server error, so Revenue Procedure 2019-46 carries the annual-notice point alone. Any of those gaps could change the reading above, and the first could change it without changing a word of the statute.