Tax Type
BPOL Tax
Description
Business Tangible Personal Property Tax
Topic
Accounting Periods and Methods
Appropriateness of Audit Methodology
Date Issued
04-23-2002
April 23, 2002
Re: Appeal of Final Local Determination
Taxpayer: *****
Locality Assessing Tax: *****
Business, Professional and Occupational License (BPOL) Tax
Business Tangible Personal Property (BTPP) Tax
Dear *****:
This final state determination is issued upon the application for correction filed by you on behalf of ***** (the "Taxpayer") with the Department of Taxation. The Taxpayer is appealing a final local determination upholding an audit assessment of both BPOL and BTPP taxes made by the Commissioner of the Revenue of ***** (the "County").
The local license tax and fee are imposed and administered by local officials. Code of Virginia § 58.1-3703.1(A)(5) authorizes the department to issue determinations on taxpayer appeals of certain BPOL tax assessments. The Business Tangible Personal Property Tax is also imposed and administered by local officials. Code of Virginia § 58.1-3983.1 authorizes the department to issue determinations on taxpayer appeals of certain BTPP tax assessments. On appeal, a BPOL and BTPP tax assessment is deemed prima facie correct. In other words, the local assessment will stand unless the taxpayer proves that it is incorrect.
The following determination is based on the facts presented to the department as summarized below. Copies of the Code of Virginia, 2000 BPOL Guidelines 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 building maintenance company that does business in several Virginia jurisdictions. It is appealing the County's BTPP assessments on property that it represents as having been located in other jurisdictions on tax day. It also is appealing assessments on "consumable janitorial supplies," which are not consistent with the practice of other taxing jurisdictions. It requests the rescinding of all BTPP tax assessments made by the County in tax years 1997, 1998, 1999 and 2000.
The Taxpayer also contests BPOL tax assessments for tax years 1998, 1999, and 2000. It states that it was improperly assessed for gross receipts attributed to other jurisdictions.
The County's audit determination of the Taxpayer's BTPP liability and assessments for tax years 1997, 1998, 1999 and 2000 were dated December 12, 2000. The County mailed the Taxpayer's BPOL assessment on December 20, 2000. The Taxpayer appealed both assessments in a letter dated March 19, 2001.
The County contends that the Taxpayer's appeal to the local commissioner for correction of the BTPP assessment was not timely filed and, therefore, is not appealable to the Tax Commissioner. The County also asserts that the BPOL assessment is correct, as the Taxpayer has not shown evidence of having a "definite place of business" in two other jurisdictions prior to calendar year 2000.
DETERMINATION
Business Personal Property Tax
Code of Virginia § 58.1-3983.1 provides a taxpayer assessed with business tangible personal property, machinery and tools, or merchant's capital taxes ("local business taxes") the opportunity to appeal local assessments of these taxes to the Tax Commissioner. To avail himself of this avenue of appeal, the taxpayer must follow a time-bound sequence of filing established under Code of Virginia § 58.1-3983.1:
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- Any person assessed with any local business tax may apply within ninety days from the date of such assessment to the commissioner of the revenue or other official responsible for assessment for a correction of the assessment. Code of Virginia § 58.1-3983.1(B). [Emphasis added.]
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- [C]ollection activity shall be suspended by the treasurer or other official responsible for the collection of such tax until a final determination is issued by the commissioner or other assessing official. Code of Virginia § 58.1-3983.1(C).
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- Any person assessed with a local business tax may apply within ninety days of the determination by the commissioner of the revenue or other assessing official on an application pursuant to subsection B to the Tax Commissioner for a correction of such assessment. Code of Virginia § 58.1-3983.1(D). [Emphasis added.]
Only when an application for correction of a local business tax assessment is timely filed with the local commissioner of the revenue is this avenue of appeal available to the taxpayer. In this case, the BBTP assessments were issued December 12, 2000, but the appeal was filed with the local commissioner of the revenue on March 19, 2001, 97 days after the assessment date. Under the 90-day requirement established pursuant to Code of Virginia § 58.1-3983.1, the Taxpayer's application for correction of the BTPP assessments was not timely filed with the local commissioner of the revenue and, therefore, cannot be appealed to the Tax Commissioner.
However, the Taxpayer may pursue an administrative remedy for certain tax years under the provisions of Code of Virginia § 58.1-3980. Taxpayers are authorized by Code of Virginia § 58.1-3980 to appeal to the commissioner of the revenue or other official for correction of an assessment as follows:
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- Any person, firm or corporation assessed by a commissioner of the revenue or other official performing the duties imposed on commissioners of the revenue under this title with any local tax authorized by this title, including, but not limited to, taxes on tangible personal property, machinery and tools, merchants' capital, transient occupancy, food and beverage, or admissions, or a local license tax, aggrieved by any such assessment, may, within three years from the last day of the tax year for which such assessment is made, or within one year from the date of the assessment, whichever is later, apply to the commissioner of the revenue or such other official who made the assessment for a correction thereof.
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- A further remedy is provided in Code of Virginia § 58.1-3984:
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- Any person assessed with local taxes, aggrieved by any such assessment, may, unless otherwise specially provided by law, (i) within three years from the last day of the tax year for which any such assessment is made, (ii) within one year from the date of the assessment, ... or (iv) within one year from the date of the final determination under § 58.1-3981, whichever is later, apply for relief to the circuit court of the county or city wherein such assessment was made.
Business, Professional and Occupational License Tax
The Taxpayer contends that the gross receipts attributed to another jurisdiction should not be subject to the County's BPOL tax. Code of Virginia § 58.1-3703.1(A)(3)(a) provides:
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- Whenever the tax imposed by this ordinance is measured by gross receipts, the gross receipts included in the taxable measure shall be only those gross receipts attributed to the exercise of a privilege subject to licensure at a definite place of business within this jurisdiction.
For purposes of the BPOL tax, a license year is the calendar year in which the license is issued. However, when the tax is measured by gross receipts, the tax is determined by the Taxpayer's base year.
"Base year" means the calendar year preceding the license year, except for contractors subject to the provisions of § 58.1-3715 or unless the local ordinance provides for a different period for measuring the gross receipts of a business, such as for beginning businesses or to allow an option to use the same fiscal year as for federal income tax purposes. Code of Virginia § 58.1-3700.1.
Therefore, the County's assessment for license year 2000 is based on gross receipts earned in calendar year 1999. The Taxpayer furnished business licenses in the two other jurisdictions that were issued for calendar year 2000; therefore, receipts attributed to these localities in that year may be apportioned in 2001. See Public Document 99-229 (8/10/99) for a further discussion of this issue.
It is not clear from the information provided whether or not some of the Taxpayer's business locations in the other jurisdictions were operational prior to calendar year 2000. Therefore, this appeal is being sent back to the County for a further determination of the facts.
If you have any questions regarding this determination, you may contact ***** in the Office of Policy and Administration, Appeals and Rulings, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
AR/35378H
Rulings of the Tax Commissioner