Tax Type
BPOL Tax
Local Taxes
Description
Exceptions to the local license tax; Business of renting real estate
Topic
Local Power to Tax
Date Issued
03-21-1997
March 21, 1997
Re: Request for Advisory Opinion: BPOL
Dear***************
This will respond to your letter dated February 7, 1997, on whether your locality may apply the BPOL tax upon those persons or entities engaged in the provision of storage space.
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 questions raised in your letter this response is intended to provide advisory guidance only and does not constitute a formal or binding ruling.
FACTS
You inquire regarding the applicability of the BPOL tax to various storage facilities and related services.
First, you ask whether the rental of storage space at a "mini-warehouse" for self-storage is taxable under the BPOL tax. You present two scenarios regarding storage at the "mini-warehouse." In one instance, the use of the storage space is solely through the self-service of the customer. There are no storage on-site personnel, nor are services made available to the customer. The customer is provided with keys giving access to the entrance gate into the warehouses, as well as to the individual storage unit. In the second instance, there is a resident manager on duty and additional services are provided to customers.
Your next question involves the provision of storage for watercraft in a "dry dock" area. You present two scenarios, one where placement for storage and retrieval of the watercraft can only be accomplished with assistance from the storage concern. In the other case, the customer retrieves the watercraft without the assistance of the storage facility. Finally, you inquire on the taxability of rentals of "slips" at boat marinas. Here, the customer's boat is suspended in a sling in a space above the water under cover of the marina.
OPINION
MINI-WAREHOUSE
Subject to certain exceptions and a grandfather clause, localities are restricted from imposing the BPOL tax, or requiring a BPOL license, on persons or entities which engage, as owners, in the business of renting real estate. Code of Virginia § 58.1-3703 C 7. In our view, the provision of "mini-warehouse" storage space constitutes the rental of real estate. Commissioner's Prior Advisory Opinion, March 14, 1980 (Copy enclosed). The storage activity referenced in § 9.2 of the 1997 BPOL Guidelines does not include the rental of real estate. Therefore, a locality may not impose a BPOL tax on such activity unless it is grand fathered under Code of Virginia § 58.1-3703 C 7.
STORAGE OF WATERCRAFT
Regarding the storage of watercraft in a "dry dock" area, in our view, the provision of storage for watercraft also constitutes the rental of real estate. Commissioner's Prior Advisory Opinion, March 24, 1980 (Copy enclosed). Therefore, localities may not impose a license fee nor levy a license tax upon persons or entities engaged in the business of leasing, as the owner, boat berths for the storage of watercraft. Likewise, localities may not require a BPOL license, nor levy a license tax, upon persons or entities engaged in the rental, as the owner, of "slips" at boat marinas.
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/12172H
Rulings of the Tax Commissioner