Tax Type
Corporation Income Tax
Description
Out-of-State Finance Corporations
Topic
Allocation and Apportionment
Date Issued
03-04-1985
March 4, 1985
Dear*****
The taxpayer has requested a ruling on whether or not it is subject to Virginia income tax.
FACTS
Taxpayer, a home improvement financing company, was issued a Certificate of Authority by the State Corporation Commission to carry on the business of purchasing home improvement contracts in Virginia. Taxpayer purchases contracts from licensed home improvement contractors for the sale and installment of inground pools and other home improvements. The home improvement contractor solicits the customerwithin Virginia and has the customer complete all necessary financing paperwork. The paperwork is subsequently forwarded to the taxpayer for review, credit checks, and financing approval. Transactions approved by the taxpayer are secured by a lien placed on the homeowners residence when the paperwork has been completed and the homeowner is satisfied. The taxpayer at this time assigns the lien over to another financial institution along with original documentation. The taxpayer does not maintain an office within Virginia, nor does it solicit directly within Virginia. All contact between the taxpayer and home improvement contractors is via telephone and mailing. Finally, if the taxpayer has to resort to legal action to enforce its rights on any Virginia contract in the event of default, it will do so in a Virginia court.
DETERMINATION
Based on the information furnished, the taxpayer is not subject to Virginia income tax because it owns no real or tangible personal property located in Virginia, has no employees located in Virginia and all of the taxpayer's activity connected with its loan income is carried on outside of Virginia. See Virginia Regulation Sec. 630-3-302, ``Income and deductions from Virginia sources' and ``Certificate of Authority.'
Dear*****
The taxpayer has requested a ruling on whether or not it is subject to Virginia income tax.
FACTS
Taxpayer, a home improvement financing company, was issued a Certificate of Authority by the State Corporation Commission to carry on the business of purchasing home improvement contracts in Virginia. Taxpayer purchases contracts from licensed home improvement contractors for the sale and installment of inground pools and other home improvements. The home improvement contractor solicits the customerwithin Virginia and has the customer complete all necessary financing paperwork. The paperwork is subsequently forwarded to the taxpayer for review, credit checks, and financing approval. Transactions approved by the taxpayer are secured by a lien placed on the homeowners residence when the paperwork has been completed and the homeowner is satisfied. The taxpayer at this time assigns the lien over to another financial institution along with original documentation. The taxpayer does not maintain an office within Virginia, nor does it solicit directly within Virginia. All contact between the taxpayer and home improvement contractors is via telephone and mailing. Finally, if the taxpayer has to resort to legal action to enforce its rights on any Virginia contract in the event of default, it will do so in a Virginia court.
DETERMINATION
Based on the information furnished, the taxpayer is not subject to Virginia income tax because it owns no real or tangible personal property located in Virginia, has no employees located in Virginia and all of the taxpayer's activity connected with its loan income is carried on outside of Virginia. See Virginia Regulation Sec. 630-3-302, ``Income and deductions from Virginia sources' and ``Certificate of Authority.'
Rulings of the Tax Commissioner