02-150 | Virginia Tax

Tax Type

BPOL Tax

Description

Vending machines, BPOL

Topic

Local Power to Tax

Local Taxes Discussion

Date Issued

12-09-2002

December 9, 2002

Re: Request for Advisory Opinion
Business, Professional and Occupational License (BPOL) Tax

Dear *****:

This is in response to your letter requesting an advisory opinion on the BPOL tax liability of a full service vending company (the "Taxpayer"), in jurisdictions other than the jurisdiction in which the Taxpayer maintains its office. I apologize for the delay in the Department's response.

The local license fee and tax are imposed and administered by local officials. The following opinion has been made subject to the facts presented to the Department as summarized below. Any change in these facts or the introduction of facts by another party may lead to a different result. 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.

Copies of the Code of Virginia sections, regulations and public documents cited are included for reference purposes. These and other reference documents are also available online in the Tax Policy Library section of the Department of Taxation's web site, located at www.tax. state. va. us.

FACTS

The Taxpayer is a full service vending machine operator located in ***** ("County A"). The Taxpayer places vending machines in several jurisdictions but pays its license taxes to County A. ***** ("County B") contends it is owed license taxes on the Taxpayer's gross receipts generated from the vending machines located within its jurisdiction. The Taxpayer states that it has already been assessed and paid tax on such receipts to County A.

The vending machines at issue are not amusement devices. Rather, they contain goods such as snacks and soft drinks.

OPINION

This question was previously addressed in Public Document (P.D.) 98-156 (10/20/98). While this opinion addresses amusement devices, it also addresses the question of vending machines that serve goods. In P.D. 98-156, the Tax Commissioner found that a locality may impose a BPOL tax if a person has established a definite place of business within the locality. In terms of vending machines, the opinion states that a jurisdiction's ability to assess a BPOL tax on the gross receipts generated by such machines is limited to coin operated amusement devices. Such devices do not include:

- vending machines that distribute goods, wares, merchandise, postage stamps, or services; viewing machines or photomat machines; or machines or devices that furnish rides to children or deliver newspapers. Va. Code § 58.1-3721.

Definite Place of Business

- "Definite place of business" means an office or a location at which occurs a regular and continuous course of dealing for thirty consecutive days or more. Va. Code § 58.1-3700.1.

The Taxpayer's definite place of business is in County A. All of its activities are directed and controlled from that location. The Taxpayer's gross receipts cannot be taxed by County B because all of the Taxpayer's business activity is controlled from its location in County A. In P.D. 98-156, the Department stated:

If operators of vending machines are not "amusement operators," they are not
subject to tax under Sec. 58.1-3720, but the operator could be taxable under the
regular BPOL tax rules of Sec. 3703 and 3703.1, provided that the operator
has a definite place of business in the locality that is imposing the tax.
[Emphasis added.]

I hope this has been helpful. If you have any questions regarding this opinion, you may contact ***** in the Office of Policy and Administration, Appeals and Rulings, at *****.

- - - - Sincerely,

- - - - Kenneth W. Thorson
        Tax Commissioner

AR/43034H

Rulings of the Tax Commissioner