Tax Type
BPOL Tax
Description
Exceptions; Newspapers
Topic
Local Power to Tax
Date Issued
05-05-1997
May 5, 1997
Re: Request for Advisory Opinion: BPOL
Dear*********
This will respond to your March 17, 1997, letter in which you asked whether the town may levy a license tax on a newspaper's gross receipts derived from the sale of papers and advertising within the newspaper.
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 written 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 indicate that a local newspaper company publishes a weekly newspaper and sells it through numerous distribution channels providing access to the public at large. The local newspaper contends that the town ("Locality") may not levy a license tax on its gross receipts derived from the sale of weekly papers and advertising within the newspaper. You ask whether this is a correct interpretation under the BPOL statutes.
OPINION
It is my opinion that the BPOL statutes prohibit the locality from levying a license tax upon the newspaper company because the newspapers are issued regularly and made available for general distribution to the public.
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 (copy enclosed). (Effective July 1, 1998, localities may either impose a license fee or levy a license tax on a licensable business, but not both - -See 1997 House Bill 2783.) Localities, however, are prohibited from imposing any fee or levying any tax on certain businesses enumerated in Code of Virginia § 58.1-3703 C (copy enclosed). Localities are prohibited from imposing a local license fee or tax "[u]pon the privilege or right of . . . publishing any newspaper . . . 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.
If the local newspaper is published at average intervals exceeding three months, the locality may impose a license fee or license tax on the newspaper company. You indicate that the local newspaper is issued weekly. Thus, under the test for regular circulation, the locality may not impose a fee or tax on the newspaper company.
Additionally, only those newspapers, magazines, newsletters and other periodicals whose subscription sales are exempt from state sales tax qualify for the tax protection provided under Code of Virginia § 58.1-3703 C 3. Code of Virginia § 58.1--609.6(3) (copy enclosed) exempts from the retail sales and use tax "[a]ny publication issued daily, or regularly at average intervals not exceeding three months..., except that newsstand sales of the same are taxable." A publication is defined as "a newspaper, magazine or other periodical which is available for general distribution to the public." Jefferson Publishing Corporation v. W. H. Forst. State Tax Commissioner, 217 Va. 988, 234 S.E.2d 297 (1977) (copy enclosed). This local weekly newspaper is made available for general distribution through numerous distribution channels providing access to the public at large. Under Code of Virginia § 58.1-609.6(3) and the Jefferson Publishing Corporation test, subscription sales of the newspaper are exempt from state sales tax.
Because the local newspaper is published regularly at average intervals not exceeding three months and is made available for general distribution to the public, it is my opinion that the locality is prohibited from levying a local license tax or fee upon the newspaper company.
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/12341C
Rulings of the Tax Commissioner