Tax Type
BPOL Tax
Description
Out-of-state corporation with headquarters in Virginia jurisdiction
Topic
Collection of Tax
Local Power to Tax
Local Taxes Discussion
Date Issued
03-07-2002
March 7, 2002
Re: Request for Advisory Opinion
Business, Professional and Occupational License (BPOL) Tax
Dear *****
This is in reply to your letter in which you request an advisory opinion from the department regarding the application of the BPOL Tax. Specifically, you inquire if an out-of-state corporation ("the "Taxpayer") that has a regional headquarters in your jurisdiction (the "City") and files a Virginia income tax return is subject to the City's BPOL tax.
The following opinion has been issued 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 issues raised in your submission, 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 an out-of state corporation that established a regional office in the City in September of 2000. It provides various services to governmental entities in the greater ***** area. These services include consulting services to recommend office space, business operations services, janitorial and maintenance services, "lead" drivers and shuttle bus drivers, and other services that are represented as "classified."
The Taxpayer filed a Virginia income tax return for taxable year 2000. You ask if the Taxpayer is liable to the City for a business license based upon Virginia gross receipts beginning September 2000.
OPINION
The BPOL tax is a tax on the privilege of doing business within a given locality. Business and "definite pace of business" are defined in Code of Virginia § 58.1-3700.1 as follows:
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- "Business" means a course of dealing which requires the time, attention and labor of the person so engaged for the purpose of earning a livelihood or profit. It implies a continuous and regular course of dealing, rather than an irregular or isolated transaction. A person may be engaged in more than one business. The following acts shall create a rebuttable presumption that a person is engaged in a business: (i) advertising or otherwise holding oneself out to the public as being engaged in a particular business or (ii) filing tax returns, schedules and documents that are required only of persons engaged in a trade or business.
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- "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.
Once it is determined that a taxpayer has a definite place of business within a locality that imposes the BPOL tax, that jurisdiction may impose the tax upon the taxpayer subject to apportionment. Apportionment becomes a factor when a taxpayer is engaged in business in two or more Virginia localities (see Code of Virginia § 58.1-3703.1), or in multiple states (see Code of Virginia § 58.1-3732 [B]). In the latter instance, the taxpayer must demonstrate that it has filed a return for an income or income-like tax in the other state(s). 2000 BPOL Guidelines § 2.6. In the situation presented, the City may impose a BPOL tax on the gross receipts of the Taxpayer, subject to the limitations set forth in Code of Virginia § 58.1-3703(C) and the apportionment requirements noted above.
I hope this has been helpful. If you have any questions regarding this ruling, you may contact ***** in the department's Office of Policy and Administration, Appeals and Rulings, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
AR/37477H
Rulings of the Tax Commissioner