Most states don't exempt cap gains from US Treasuries or US "Agency" bonds.
A "rare" few do, if I recall, but I don't know about VA at all.
And the code you reference refers to the actual "Authorities" of the Commonwealth of VA not being subject to gains on the Bonds they happen to issue...not individuals. (at least not in my reading of it)
Doesn't mean that somewhere else, VA might allow Cap gains generated from US, or US Agency bonds to be exempt from state taxes...BUT.... This requires someone especially knowledgeable in both the VA laws, AND how to deal with it in the VA tax software...(i.e. not I).
So you just have to wait and hope someone who knows VA will reply in the next few days. Or continue researching on your own.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
