Tax Type
Property Tax
Description
Public service corporations;Charter bus tour company
Topic
Exemptions
Date Issued
02-03-1995
You ask whether a charter tour bus company that has a certificate of public convenience and necessity for a special or charter party carrier is exempt from the requirements of both obtaining a city business license and paying business personal property tax.
Article X, § 4 of the Constitution of Virginia (1971) segregates for local taxation "tangible personal property, except the rolling stock of public service corporations.' This provision does not prohibit localities from taxing rolling stock. It merely permits rolling stock to be taxed by the state.1 Chapter 26 of Title 58.1, §§ 58.1-2600 through 58.1-2690, provides for "Taxation of Public Service Corporations.' § 58.1-2658 provides that "[n]o local property taxes shall be imposed upon the rolling stock of a certificated motor vehicle carrier.' The term "certificated motor vehicle carrier' is defined in § 58.1-2600 as "a common carrier by motor vehicle operating over regular routes under a certificate of public convenience and necessity issued by the [State Corporation] Commission. (Emphasis added.)
Therefore, because a charter tour bus company holding a certificate of public convenience and necessity for a special or charter party carrier does not operate over regular routes, I am of the opinion that it is not a certificated motor vehicle carrier within the meaning of § 58.1-2600, and, therefore. is not exempt from personal property taxes under § 58.1-2658.
Section 58.1-3703(B)(1) provides that "[n]o county, city, or town shall levy any license tax "[o]n any public service corporation except as provided in § 58.1-37312 or as permitted by other provisions of law[.]'
The term "public service corporation' is not defined for license tax purposes. § 13.1-620(F), however, provides that "[w]hether or not classified elsewhere in the Code as public service companies the following businesses are not required to incorporate as public service companies: ... charter party carriers, restricted parcel carriers [and] sight-seeing carriers[.]' A charter party carrier, therefore, is not required to incorporate as a public service corporation. In addition, charter party carriers are not considered public service corporations for purposes of assessment and taxation under Chapter 26 of Title 58.1. Consequently, it is my opinion that charter party carriers are not "public service corporations' for purposes of the exemption from local license tax imposed under § 58.1-3703(B)(1), and are not exempt from local license tax.
1 See Ea. Coast Fr. Lines v. City of Richmond, 194 Va. 517, 74 S.E.2d 283 (1953).
2 The exception in § 58.1-3731 is not applicable to your request.
Attorney General's Opinion