"income from a business operating in Virginia" means your business, not your employer's business. If you are a wagw earner/salaried employee that does not apply to you (even if you were self employed, the definition of "operating in Virginia" would apply).
"Taxable income from Virginia sources includes "income from the practice of a trade or business in Virginia" and includes, but is not limited to, wages and salaries earned while in Virginia, income from a business operating in Virginia, rental income from a property in Virginia, etc"
What your employer and the "voice on the phone" at the Virginia Department of Taxation are telling you is wrong. This is a common question, in this forum, and you'll find that every TurboTax Champ and Employee Tax Expert is giving the same answer. That income is not taxable, by the Employer state, unless your employer is located in New York, Pennsylvania, Nebraska, Delaware or Arkansas.
