Tax Type
BPOL Tax
Description
Gross receipts; Specified threshold
Topic
Local Power to Tax
Date Issued
06-04-1997
June 4, 1997
Re: Request for Advisory Opinion: BPOL
Dear****************
This will respond to ********* letter of April 29, 1997, requesting an advisory opinion.
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
Section 58.1-3707 A Code of Virginia provides, in part, that no license tax shall be imposed on any business whose gross receipts are less than $100,000. A latter provision in the same subsection states that a gross receipts tax may be imposed on businesses whose gross receipts exceed $100,000.
OPINION
The mandatory language in § 58.1-3706 A Code of Virginia provides that no gross receipts tax may be imposed on businesses whose gross receipts tax are less than $100,000. Given a situation in which a taxpayer had gross receipts of exactly $100,000, I would conclude that the language in the statute which prohibits the imposition of a gross receipts tax where the gross receipts are under $100,000 prevails over the permissive phrase that follows which states that the gross receipts tax may be imposed where gross receipts exceed $100,000. There is no language in the statute which prohibits the imposition of a gross receipts tax where gross receipts are exactly $100,000 and this interpretation is consistent with the statutes objective to provide a certain and specific level of gross receipts at which the gross receipts tax could be imposed.
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. If you have any further questions or comments, please do not hesitate to let me know.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12486D
Rulings of the Tax Commissioner