Document Number
04-137
Tax Type
BPOL Tax
Description
An "author" is subject to licensure and payment of the BPOL tax.
Topic
Persons Subject to Tax
Taxability of Persons and Transactions
Date Issued
09-16-2004

September 16, 2004



Dear ************:

This is in response to your letter in which you request an advisory opinion regarding the application of the Business, Professional and Occupational License (BPOL) tax to authors. I apologize for the delay in the Department's response.

The local license fee and tax are imposed and administered by local officials. Section 58.1-3701 of the Code of Virginia authorizes the Department to issue advisory opinions on local license tax issues. 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. Any change in the facts or the introduction of facts by another party may lead to a different result.

The Code of Virginia sections and public documents cited are available on-line in the Tax Policy Library section of the Department of Taxation's web site, located at www.tax.state.va.us.
FACTS

You state that the Taxpayer is a self-employed writer who resides in the ***** (the "County"). The Taxpayer writes manuscripts at his home in the County and sends the disks containing the manuscripts to a publisher in another state. The Taxpayer's only definite place of business is in the County, although the Taxpayer does spend some time traveling to promote his work with book signings and lectures. You state that the Taxpayer contends that his income is in the form of royalties and does not believe this income is subject to the BPOL tax. You ask if the Taxpayer's business is a licensable activity.

OPINION

The BPOL tax is a tax on the privilege of doing business. The local governing body, by ordinance, may levy and provide for the assessment and collection of license taxes on businesses, trades, professions, occupations and callings and upon the persons, firms and corporations engaged therein within the locality. See Virginia Code § 58.1-3703. The term "business" is defined in Va. Code § 58.1-3700.1 as:
    • 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.

The facts presented indicate that the Taxpayer holds himself out as an author and conducts his primary business from his home, where he writes manuscripts. The Taxpayer also files "tax returns, schedules and documents that are required only of persons engaged in a trade or business." Therefore, for BPOL tax purposes, the Taxpayer may be engaged in a licensable business activity if it is provided for in the County's ordinance.

A locality's power to impose the tax is derived from the Code of Virginia and its local ordinances. Whether a particular privilege requires a license and payment of the BPOL tax depends upon the local ordinance. See Public Document (P.D.) 98-140 (10/07/1998). Section 10-36 of the County's Code of Ordinances provides for the licensure of personal and business service occupations:
    • "Personal services" shall mean rendering for compensation any personal, business or other services not specifically classified as financial, real estate, professional, or repair services, under this chapter, or rendered in any other business or occupation not specifically classified in this chapter unless exempted from local license tax by Title 58.1 of the Code of Virginia.

Included in the enumerated list of occupations classified as personal or business services is the occupation of "writer." Therefore, I must conclude that the business activity conducted by the Taxpayer (author) is subject to licensure and payment of the BPOL tax.

Based on the foregoing, the County can legally assess the Taxpayer with BPOL tax on his gross receipts derived from his business activity. The fact that the receipts are in the form of royalty fees or other forms of income is not relevant. For purposes of the BPOL tax, the term gross receipts means "the whole, entire, total receipts, without deduction." Royalty payments would fall under this definition.

If you have any questions regarding this opinion, you may contact ***** in the Department's Office of Policy and Administration, Appeals and Rulings, at *****.
                    • Sincerely,


                • Kenneth W. Thorson
                  Tax Commissioner


AR/48335


Rulings of the Tax Commissioner

Last Updated 09/16/2014 15:39