Tax Type
BPOL Tax
Description
Exceptions to the local license tax; Business, professional, and occupational license tax (BPOL); Public service corporations
Topic
Local Power to Tax
Date Issued
03-24-1997
March 24, 1997
Re: Request for an Advisory Opinion: Local License Tax
Dear******************
This will respond to your facsimile dated March 12, 1997, regarding the taxation of motor vehicle carriers.
The license tax is a local tax which is imposed and administered by local officials. The Code of Virginia limits the involvement of the Department of Taxation to promulgating guidelines and issuing advisory opinions. However, the department shall not be required to interpret any local ordinance.
While addressing the question raised in your letter, this response is intended to provide advisory guidance only and does not constitute a formal or binding ruling.
FACTS
You ask how to tax motor vehicle carriers under the BPOL statute and
Guidelines. You state that under the old system, you used § 67a of the Motor Carrier
Act and charged $.006 per mile.
OPINION
The taxation of motor vehicle carriers for BPOL purposes is limited by statute. Code of Virginia § 58.1- 3703 C 1, copy enclosed, exempts public service corporations from the BPOL tax. Code of Virginia § 56-1 provides that all persons authorized to carry passengers or property as a common carrier are public service corporations. Thus, only motor vehicle carriers which are not classified a s common carriers are subject to the BPOL tax.
Code of Virginia § 58.1-2600, copy enclosed, defines a certificated motor vehicle carrier as “a common carrier by motor vehicle... operating over regular routes under a certificate of public convenience and necessity...." Code of Virginia § 46.2-2000, copy enclosed, defines a common carrier as "any person who undertakes ... to transport passengers for the general public by motor vehicle for compensation over the highways of the Commonwealth." A restricted common carrier is defined as "any person who undertakes ... to transport passengers or household goods of any restricted class or classes by motor vehicle for compensation, whether over regular or irregular routes." Common carriers transport any member of the public able to pay the fare. Restricted common carriers are sight-seeing carriers and charter party carriers. They transport groups of passengers under a single contract for an agreed charge. See Code of Virginia §§ 46.2-2200 and 46.2-2300, copies enclosed.
Both common carriers and restricted common carriers are classified as public service companies for BPOL tax purposes if they transport passengers over regular routes. Thus, they are exempt from the BPOL tax. Carriers of passengers over irregular routes are not classified as public service companies for BPOL purposes. They may be subject to the BPOL tax. Carriers of property are not common carriers. They may also be subject to the BPOL tax.
The Motor Carrier Act that you mentioned was a federal act which was repealed by Congress. The BPOL tax is a local tax which localities may assess against entities engaged in the licensable privilege of doing business. See Code of Virginia § 58.1-3703.1 A 3a, copy enclosed. A locality may assess the tax on a business based on its gross receipts and/or charge a filing fee. See Code of Virginia §§ 58.1-3703 and 3706, copy enclosed. A locality may not assess the BPOL tax based on mileage.
Legislation (HB 2159), which has passed both the House and the Senate, would exempt interstate carriers of passengers or property formerly certified by the Interstate Commerce Commission or presently registered with the Surface Transportation Board of the United States Department of Transportation. Should this legislation be signed into law by the Governor, all trucking and passenger transportation companies, with the exception of companies which exclusively operate in the Commonwealth, would be exempt from the BPOL tax effective July 1, 1997.
I hope that the above information will be beneficial to you. Although I believe this letter conforms with the law, it is written only for your guidance, and the final determination is with the locality.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12285B
Rulings of the Tax Commissioner