January 7, 2020
Re: Request for Advisory Opinion
Business, Professional and Occupational License (BPOL) tax
This will reply to your letter in which ***** (the “City”) requests an advisory opinion regarding the exemption for newspapers, magazines, newsletters and other publications for purposes of the Business, Professional and Occupational license (BPOL) tax.
The local license fee and tax are imposed and administered by local officials. Virginia Code § 58.1-3701 authorizes the Department to issue advisory opinions on local license tax issues. The following opinion has been made subject to the facts presented to the Department summarized below. Any change in these facts or the introduction of new facts may lead to a different result.
The Code of Virginia sections cited are available online at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department’s web site.
An individual has an online food and nutrition blog. She updates the blog nearly every day but readers are not required to pay any subscription or other fees to access the blog. The blog, however, generates income from advertising fees, which she reports as income on Schedule C of her federal income tax return. The City requests an opinion regarding whether the individual is subject to BPOL tax.
Generally, a locality may impose a license fee and levy a license tax on a business for the privilege of engaging in business at a definite place within the locality. Code of Virginia § 58.1-3703 A. Localities, however, are prohibited from imposing any fee or levying any tax on certain businesses enumerated in Virginia Code § 58.1-3703 C. Localities are prohibited from imposing a local license fee or tax “[u]pon the privilege or right of printing or publishing any newspaper, magazine, newsletter or other publication issued daily or regularly at average intervals not exceeding three months, provided the publication’s subscription sales are exempt from state sales tax . . .” Code of Virginia § 58.1-3703 C 3. 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).
A “blog” is another term for “weblog,” which is typically a website containing text entries in reverse chronological order. Entries may also have images, audio, video, links to other websites and comment sections for readers. Blogs have proliferated substantially in the last two decades and now cover virtually any conceivable topic.
Because a blog is not a newspaper, magazine or newsletter, it is necessary to determine whether it may be considered as an “other publication” under the statute. Under the legal doctrine of ejusdem generis (a Latin phrase which means “of the same kind”), when general words follow particular and specific words, the general words must be confined to things of the same kind. See Gates & Son Co. v. Richmond, 103 Va. 702, 49 S.E.2d 965 (1905). As applied in this case, the question becomes whether a blog is an “other publication” of the same kind as newspapers, magazines or newsletters, the more specific items listed in the statute.
Historically, newspapers, magazines and newsletters were available only in a tangible format. They were typically overseen by an editorial staff, employed reporters or other contributors (or paid unaffiliated parties for material), and published their work as a compilation of all of the publication’s efforts at predetermined intervals. They were usually delivered in person or through the mail to subscribers, or individuals could purchase them separately from newsstands. Because the current version of the exemption has been in effect since 1988 and at a time when the internet was not widely in use, the Department believes it is appropriate to consider the specific items listed in the statute in their historical context as tangible media. See 1988 House Bill 646 (Chapter 499 of the 1988 Acts of Assembly). This is especially true because of the exemption’s reference to state sales tax, which generally applies to sales of tangible personal property. In light of that context, in the Department’s opinion, a blog is not the same kind of publication as a newspaper, magazine or newsletter. Accordingly, it is the Department’s opinion that the business activity of operating a blog may be subject to BPOL tax.
If you have any questions regarding this opinion, you may contact ***** in the Office of Tax Policy, Appeals and Rulings at *****.
Craig M. Burns