Tax Type
BPOL Tax
Description
Peddlers; Direct sellers
Topic
Local Power to Tax
Date Issued
01-21-1997
January 21, 1997
Re: Request for an Advisory Opinion: Local License Tax
Dear*****************
This will reply to your facsimile of January 10, 1997, requesting an advisory opinion, pursuant to Code of Virginia § 58.1-3701 on the classification of enterprises which solicit sales in localities.
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.
I will address the questions raised in your facsimile. The response is to provide guidance only and does not constitute a formal or binding ruling.
Facts
A non-resident entity drives a truck into your locality, parks at particular locations, and sells frozen foods out of the back of a truck to the public. A non-resident individual sells cosmetics door to door in your locality. The cosmetic sales person works as an independent contractor on commission. You ask how each of these entities should be licensed.
Determination
Frozen Food Sales
Code of Virginia § 58.1-3717 A defines a peddler as "any person who shall carry from place to place any goods, wares or merchandise and offer to sell or barter the same, or actually sell or barter the same, shall be deemed to be a peddler." In your example, the taxpayer's truck would drive into your locality and sell frozen foods to any member of the public on the street at various locations. Under these circumstances, the taxpayer is subject to licensure as a peddler.
Cosmetic Sales
Code of Virginia § 58.1-3719.1 B states that a direct seller is a person who sells or solicits sales at the private residences of consumers, is compensated by commission, and is an independent contractor. According to the facts presented, the salesperson solicits sales at her customer's private residences, is paid on commission and has an independent contracting relationship with the manufacturer or wholesaler of the cosmetics. Thus, she is a direct seller.
Code of Virginia § 58.1-3719.1 A states that the situs for the local license taxation of a direct seller is the locality where the person maintains their place of abode. If the taxpayer is a direct seller and does not live in your locality, she would not be subject to taxation in your locality.
I have enclosed copies of Code of Virginia §§ 58.1-3717 and 58.1-3719.1 for your further reference. If you should have any further questions regarding this advisory opinion, you may contact ************** at***********************
Sincerely,
Danny M. Payne
Tax Commissioner
OTP12041B
Rulings of the Tax Commissioner