Tax Type
BPOL Tax
Local Taxes
Description
Nonprofit organization with taxable income
Topic
Local Power to Tax
Date Issued
04-26-2000
April 26, 2000
Re: Request for Advisory Opinion
Business, Professional, and Occupational License (BPOL) Tax
Dear ****
This will respond to your letter requesting an advisory opinion regarding the local license taxation of ***** (the "Taxpayer") by the Town of ***** (the "Town").
While addressing the questions raised in your letter, this response is intended to provide advisory guidance only, and does not constitute a formal or binding ruling. I have enclosed copies of cited material for your review.
FACTS
You have provided a copy of a letter from the Internal Revenue Service indicating that the Taxpayer is exempt from federal income tax under (Internal Revenue Code (IRC) § 501(a) as an organization described in IRC § 501 (c)(3). You provide no other information regarding the Taxpayer or its activities. You request that the department provide an opinion as to whether or not this business should be exempted from local license taxation.
OPINION
Under current law, a locality may impose a license fee or license tax on a charitable nonprofit organization only to the extent that such organization has gross receipts from "an unrelated trade or business the income of which is taxable under Internal Revenue Code § 511 et seq." (i.e., unrelated business taxable income). Code of Virginia '§58.1-3703(C)(18)(a). A "charitable nonprofit organization" is an organization which is described in IRC § 501(c)(3) and to which contributions are deductible by the contributor under IRC § 170. I am enclosing copies of Public Documents 97-143, 97-192, and 98-203, which explain this issue in greater detail.
I hope that the above information will be beneficial to you. Although I believe this letter conforms with the requirements of the law, it is written only for your guidance. If you have other questions, please do not hesitate to contact *****, Tax Policy Analyst, in my Office of Tax Policy at ****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP25330D
TO WHOM IT MAY CONCERN
Under the authority of Section 58.1-1 of the Code of Virginia, I hereby delegate to Janie E. Bowen, Assistant Tax Commissioner, the authority to sign for me any and all documents, including, but not limited to, affidavits, warrants, rulings, appeals, offers in compromise and sales tax revocations.
This authority shall not extend to matters or documents related to my service on any statutorily created board or commission, including, but not limited to, the Compensation Board and the Treasury Board.
This authority will continue until revoked. The delegation of authority dated June 3, 1994, is hereby revoked and replaced.
Done at Richmond, Virginia this tenth day of September, 1999.
Danny M. Payne
Tax Commissioner
Re: Request for Advisory Opinion
Business, Professional, and Occupational License (BPOL) Tax
Dear ****
This will respond to your letter requesting an advisory opinion regarding the local license taxation of ***** (the "Taxpayer") by the Town of ***** (the "Town").
While addressing the questions raised in your letter, this response is intended to provide advisory guidance only, and does not constitute a formal or binding ruling. I have enclosed copies of cited material for your review.
FACTS
You have provided a copy of a letter from the Internal Revenue Service indicating that the Taxpayer is exempt from federal income tax under (Internal Revenue Code (IRC) § 501(a) as an organization described in IRC § 501 (c)(3). You provide no other information regarding the Taxpayer or its activities. You request that the department provide an opinion as to whether or not this business should be exempted from local license taxation.
OPINION
Under current law, a locality may impose a license fee or license tax on a charitable nonprofit organization only to the extent that such organization has gross receipts from "an unrelated trade or business the income of which is taxable under Internal Revenue Code § 511 et seq." (i.e., unrelated business taxable income). Code of Virginia '§58.1-3703(C)(18)(a). A "charitable nonprofit organization" is an organization which is described in IRC § 501(c)(3) and to which contributions are deductible by the contributor under IRC § 170. I am enclosing copies of Public Documents 97-143, 97-192, and 98-203, which explain this issue in greater detail.
I hope that the above information will be beneficial to you. Although I believe this letter conforms with the requirements of the law, it is written only for your guidance. If you have other questions, please do not hesitate to contact *****, Tax Policy Analyst, in my Office of Tax Policy at ****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP25330D
TO WHOM IT MAY CONCERN
Under the authority of Section 58.1-1 of the Code of Virginia, I hereby delegate to Janie E. Bowen, Assistant Tax Commissioner, the authority to sign for me any and all documents, including, but not limited to, affidavits, warrants, rulings, appeals, offers in compromise and sales tax revocations.
This authority shall not extend to matters or documents related to my service on any statutorily created board or commission, including, but not limited to, the Compensation Board and the Treasury Board.
This authority will continue until revoked. The delegation of authority dated June 3, 1994, is hereby revoked and replaced.
Done at Richmond, Virginia this tenth day of September, 1999.
Danny M. Payne
Tax Commissioner
Rulings of the Tax Commissioner