Tax Type
BPOL Tax
Description
Persons Subject To Tax; Food sales by out-of-state company
Topic
Local Power to Tax
Date Issued
01-27-1997
January 27, 1997
Re: Request for Advisory Opinion: Local License Tax
Dear****
This will reply to your facsimile of January 13, 1997, requesting an advisory opinion, pursuant to Code of Virginia § 58.1-3701, on the situs of a North Carolina wholesale food company (the Taxpayer) doing business in Virginia.
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 question raised in your letter. The response is intended to provide guidance only and does not constitute a formal or binding ruling.
Facts
The Taxpayer has a sales office in a Virginia locality. Sales people travel throughout Virginia making sales calls and taking orders. Sales orders are processed in the Virginia office. The Taxpayer leases the sales office building and parking lot from their employee, the manager of the sales office. The Taxpayer trucks the food up from North Carolina to the parking lot at the sales office. The truck's contents are unloaded onto other trucks and the food is then delivered throughout Virginia. The locality bases its wholesaler's license tax on purchases.
Determination
Code of Virginia § 58.1-3703.1 A 3a (2) states:
-
- a wholesaler or distribution house subject to a license tax measured by purchases shall determine the situs of its purchases by the definite place of business at which or from which deliveries of the purchased goods, wares and merchandise are made to customers.
Deliveries are made to customers at the shipping point to the customers. See § 3.8.3. of the 1997 Guidelines. The parking lot is the shipping point of the goods provided it qualifies as a definite place of business. Code of Virginia § 58.1-3700.1 defines definite place of business as "an office or location at which occurs a regular and continuous course of dealing for thirty consecutive days or more." A definite place of business may include a leased location. The governing body must determine whether the sales office and parking lot constitute a definite place of business. Some characteristics which may help determine whether the location is a definite place of business include, but are not limited to, the following on site activities: (1) a continuous presence; (2) having an attached office with a phone; (3) the reception of mail; (4) having employees; and (5) record keeping. If the sales office and parking lot constitute a definite place of business, the Taxpayer is subject to licensure in the Virginia locality.
I have enclosed Code of Virginia §§ 58.1-3700.1, 58.1-3703.1, and § 3.8.3. of the 1997 Guidelines for your further reference. If you have any questions regarding this advisory opinion, you may contact ********* at*************
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12044B
Rulings of the Tax Commissioner