Attorney General Opinions

The Honorable Ross A. Mugler

Commissioner of the Revenue for the City of Hampton

You ask whether the fees charged and received by commissioners of accounts from the fiduciary accounts they administer under Chapter 2 of Title 26, §§ 26­8 through 26­37 of the Code of Virginia, are "gross receipts" subject to local license taxation.

Section 58.1­3700 authorizes the imposition of a local license tax on any "business, employment or profession" not otherwise exempted.¹ § 58.1­3700.1 defines the following terms used in the application of such taxes:

"Gross receipts" means the whole, entire, total receipts, without deduction.

"Professional services" means services performed by ¼ attorneys-at-law, ¼ and such occupations, and no others, as the Department of Taxation may list in the BPOL guidelines promulgated pursuant to § 58.1­3701.

Pursuant to § 58.1­3701, the Department of Taxation issued its updated Guidelines for Business, Professional and Occupational License Tax Imposed by City, County and Town Ordinances² ("BPOL Guidelines"). The BPOL Guidelines define the term "professional" to include persons rendering the services of "[a]ttorneys-at-law."³

Section 26­8 authorizes circuit court judges to appoint "discreet and competent attorney[s]-at-law" as commissioners of accounts to serve as supervisory officers of the court.⁴ Such commissioners have limited jurisdiction over certain fiduciaries and their accounts.⁵ A commissioner acting under the appointment authority of § 26­8 is implementing a special statutory jurisdiction for the efficient administration of fiduciary accounts without resort, in ordinary cases, to a full-scale suit for direction in the administration of estates.⁶

Section 26­8 also requires commissioners of accounts to maintain their own offices and keep their own books, records and accounts. Commissioners of accounts are not paid a salary or otherwise paid by the circuit court, and, therefore, are permitted by § 26­24 to charge and collect fees "for the special duties ¼ imposed upon them" from the accounts they administer. Such fees "shall be the same as are now allowed by law to commissioners in chancery."⁷

A 1987 opinion of the Attorney General interpreting § 2.1­639.35(B), a portion of the General Assembly Conflict of Interests Act, concludes that "[t]he appointment of a commissioner of accounts by a circuit court is ¼ a 'contract of regular employment,'"⁸ because "an order appointing a commissioner ¼ in a particular jurisdiction typically remains effective until a subsequent order of removal is entered."⁹ The opinion also notes that "[a]lthough the actual services rendered by a commissioner ¼ are not continuous, the tenure of his appointment (employment) is regular in that it is not casual or temporary, but a permanent appointment at the pleasure of the circuit court judge."¹⁰ The opinion, therefore, concludes that appointment of a General Assembly member as a commissioner of accounts constitutes "regular employment" within the meaning of § 2.1­639.35(B¹¹

A 1981 opinion concludes that commissioners of accounts are supervisory officers of the circuit court, with limited jurisdiction over certain fiduciaries and their accounts.¹² The opinion also concludes that a commissioner of accounts is "a public officer exercising statutory jurisdiction, and an officer of the circuit court, in a capacity different from the ordinary attorney."¹³ All attorneys-at-law, however, are "officers of the courts, subject to the supervisory powers of the courts."¹⁴

Local gross receipts business license taxes authorized by § 58.1­3703(A) constitute excise taxes imposed on the privilege of engaging in certain businesses and occupations.¹⁵ Commissioners of accounts are required to be "discreet and competent attorney[s]-at-law,"¹⁶ who render professional services for a fee, and who charge and collect fees from the accounts they administer.¹⁷ The BPOL guidelines define such a professional practice as an occupation that is subject to local license taxation.¹⁸ Neither the BPOL guidelines nor § 58.1­3700.1 exempts the fees charged and received by commissioners of accounts from consideration as "gross receipts" subject to local license taxation. It is well-settled in Virginia that the interpretation given a statute by the administrative agency charged with its administration and enforcement is entitled to great weight.¹⁹ The General Assembly is presumed to be cognizant of such an administrative construction of a statute.²⁰ The interpretation by the Department of Taxation is entitled to deference and is an established principle of statutory construction.²¹ Finally, I am guided by the principle that exemptions from taxation are to be narrowly construed, and any doubt is to be resolved against allowing the exemption.²²

Therefore, I am of the opinion that fees charged and received by commissioners of accounts from the fiduciary accounts they administer are gross receipts subject to local license taxation.

¹Section 58.1­3703(C) lists 19 exemptions from the imposition of local license fees or taxes; however, none is applicable to your inquiry.

²Dep't of Tax'n, Guidelines for Business, Professional and Occupational License Tax Imposed by City, County and Town Ordinances (Jan. 1, 1997) [hereinafter BPOL Guidelines].

³Id. § 8.4.2, at 114.

⁴"The judges of each circuit court shall appoint so many commissioners of accounts, as may be requisite to carry out the duties of that office, who shall be removable at pleasure and who shall have a general supervision of all fiduciaries admitted to qualify in such court or before the clerk thereof and make all ex parte settlements of their accounts. The person appointed as a commissioner of accounts shall be a discreet and competent attorney-at-law.

"[Each commissioner] shall retain the power of supervision over every account, matter or thing referred to him until his final account is approved, unless he shall resign, retire or be removed from office, in which case his successor shall continue such duties." § 26­8.

⁵See Cope v. Shedd-Carter, 175 Va. 273, 280, 7 S.E.2d 891, 894 (1940).

⁶See Carter v. Skillman, 108 Va. 204, 213, 60 S.E. 775, 778­79 (1908).

⁷Section 26­24. § 14.1­133 sets forth the allowable fees that commissioners in chancery may charge.

⁸1986­1987 Op. Va. Att'y Gen. 63, 65.

⁹Id. at 64­65.

¹⁰Id. at 65.

¹¹Id. at 65 (citing § 2.1­604(B), former version of § 2.1­639.35(B)).

¹²1981­1982 Op. Va. Att'y Gen. 297, 298.

¹³Id.

¹⁴Allied Productions v. Duesterdick, 217 Va. 763, 767, 232 S.E.2d 774, 777 (1977); see also Button v. Day, 204 Va. 547, 554, 132 S.E.2d 292, 297 (1963).

¹⁵See Op. Va. Att'y Gen.: 1986­1987 at 111, 112; 1974­1975 at 459.

¹⁶Section 26­8.

¹⁷See § 26­24.

¹⁸See BPOL Guidelines § 8.4.2, supra note 2.

¹⁹Forst v. Rockingham, 222 Va. 270, 276, 279 S.E.2d 400, 403 (1981); Winchester TV Cable v. State Tax Com., 216 Va. 286, 290, 217 S.E.2d 885, 889 (1975); Miller v. Commonwealth, 180 Va. 36, 21 S.E.2d 721 (1942); Op. Va. Att'y Gen.: 1995 at 250, 252; 1991 at 161, 167.

²⁰Miller v. Commonwealth, 180 Va. at 36, 21 S.E.2d at 721.

²¹Forst v. Rockingham, 222 Va. at 276, 279 S.E.2d at 403; 1991 Op. Va. Att'y Gen. 20, 22.

²²See VA. CONST. art. X, § 6(f) (1971); see also Commonwealth v. Wellmore Coal, 228 Va. 149, 153­54, 320 S.E.2d 509, 511 (1984).