Tax Type
BPOL Tax
Description
Non Resident Merchant: 2 Day Sale and Liable for BPOL?
Topic
Basis of Tax
Persons Subject to Tax
Date Issued
10-31-2001
October 31, 2001
Re: Request for Advisory Opinion
Business, Professional and Occupational License (BPOL) Tax
Dear *****
This will respond to your letter dated September 13, 2001, regarding the application of the BPOL tax to ***** (the "Taxpayer"), an Indiana company that sold its merchandise in the ***** (the "Town") for a two-day period.
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
The Taxpayer is a retail business that participated in a two-day sale of general merchandise, tools and furniture in the Town. The Town classified the Taxpayer as an itinerant merchant and assessed the Taxpayer with a BPOL tax. The Taxpayer paid the assessment under protest, stating that "the charge is discriminatory vis-a-vis permanent retailers and violates the Commerce Clause of the United States Constitution."
OPINION
Localities are authorized to adopt local ordinances imposing a tax on itinerant merchants under Code of Virginia § 58.1-3717, which states:
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- For the purpose of license taxation pursuant to § 58.1-3703, the term "itinerant merchant" means any person who engages in, does, or transacts any temporary or transient business in any county, city or town and who, for the purpose of carrying on such business, occupies any location for a period of less than one year . . . The local governing body imposing such tax may by ordinance designate the streets or other public places on or in which all licensed peddlers or itinerant merchants may sell or offer for sale their goods, wares or merchandise.
The Town imposed a $500 BPOL tax on the Taxpayer, the maximum amount permitted by state law and local ordinance. The reason for including itinerant merchants under the BPOL statute is so that local retailers who are subject to local licensure as retail merchants are not placed at a competitive disadvantaged.
In regard to the constitutionality of the local BPOL tax, that is a matter best reserved for the Attorney General to address. However, I would note that the constitutionally of the BPOL tax has been accepted over the decades by the Supreme Court of Virginia in a wide variety of local business license tax cases the Court has addressed.
I trust that this information has been useful to you. If you have other questions regarding this matter, you may contact ***** in the department's Office of Policy and Administration, Appeals and Rulings, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
ARO/36931
Rulings of the Tax Commissioner