Tax Type
BPOL Tax
Description
Taxpayer's Landfill business is required to be licensed in the City
Topic
Local Power to Tax
Taxable Income
Date Issued
03-12-2012
March 12, 2012
Re: Appeal of Final Local Determination
Locality: *****
Taxpayer: *****
Business, Professional and Occupational License Tax
Dear *****:
This final state determination is issued upon the application for correction filed by ***** (the "Taxpayer") with the Department of Taxation. The Taxpayer appeals the determination by the ***** (the "City") that the Taxpayer is not exempt from the Business, Professional and Occupational License (BPOL) tax.
The BPOL tax is imposed and administered by local officials. Virginia Code § 58.1-3703.1 authorizes the Department to issue determinations on taxpayer appeals of BPOL tax assessments. On appeal, a BPOL tax assessment is deemed prima facie correct, i.e., 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 summarized below. The Code of Virginia sections and public document cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site.
FACTS
The Taxpayer operates a landfill in the City that has been certified as a pollution control facility. In April 2011, the Taxpayer submitted a letter to the City requesting that it be exempt from all local tax because its landfill was certified as a pollution control facility. The City issued a determination that held that the exemption for certified pollution control facilities applied only to property tax and not to the BPOL tax. The Taxpayer appeals the City's final determination to the Tax Commissioner, contending it is exempt from all local taxation, including the BPOL tax.
ANALYSIS
Under Va. Code § 58.1-3660, certified pollution control equipment and facilities are defined to be a separate class of real or personal property for purposes of local taxation. For taxable years beginning on or after January 1, 2011, Va. Code § 58.1-3660 A exempts such property from local taxation.
The Taxpayer asserts that the exemption under Va. Code § 58.1-3660 includes the BPOL tax. The Taxpayer believes that the exemption is not limited to property tax because it received a sales and use tax exemption under the same statute..
By reason of their character as legislative grants, statutes relating to exemptions allowed against a tax liability must be strictly construed against the taxpayer and in favor of the taxing authority. See DKM Richmond Associates, L.P. v. City of Richmond, 249 Va. 401, 407, 457 S.E.2d 76, 80 (1995). Virginia Code § 58.1-3660 sets forth certified pollution control equipment and facilities as a separate class of property and establishes a separate classification for such property for local taxation purposes. The language of the statute clearly limits the exemption for certified pollution control equipment and facilities to local taxes on property.
Further, although a portion of the sales and use tax is attributed to localities, it is imposed by the Commonwealth and administered by the Department. Virginia Code § 58.1-609.3 9(i) provides a sales and use tax exemption for certified pollution control equipment and facilities as defined in Va. Code § 58.1-3660. The applicability of Va. Code § 58.1-3660 to the sales and use tax exemption is limited to definitional language in paragraph B. The exemption provision in Va. Code § 58.1-3660 A does not apply to the Virginia sales and use tax.
Virginia Code § 58.1-3700 et seq. authorizes localities to impose, by ordinance, a license tax on all businesses, trades, professions, occupations and callings and upon the persons, firms and corporations engaged therein. The BPOL tax is a local license tax imposed on the privilege of doing business. The BPOL tax is imposed on a taxpayer's "the whole entire total receipts, without deduction." See Va. Code § 58.13700.1. As such, the BPOL tax is measured by the activities of a business conducted within a locality and is not a tax on property.
DETERMINATION
After considering the arguments presented and a review of the statutory provisions at issue, I must conclude that the exemption provided for certified pollution control equipment and facilities under Va. Code § 58.1-3660 A is limited to the local taxation of real and tangible personal property. As such, I find that the Taxpayer's Landfill business is required to be licensed in the City and is subject to BPOL taxation.
If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
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- Sincerely,
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Craig M. Burns
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- Tax Commissioner
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AR/1-4859856845.B
Rulings of the Tax Commissioner