Tax Type
BPOL Tax
Description
Exceptions; Household goods carrier subject to tax
Topic
Local Power to Tax
Date Issued
08-14-1997
August 14, 1997
Re: Request for Advisory Opinion: BPOL
Dear****************
This will respond to your letter of July 3, 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
You have inquired concerning the BPOL exemption for public service companies as it applies to a household goods carrier. The company in question engages in interstate, local and intrastate moving. Specifically, you ask whether a household goods carrier which has been issued a certificate of public convenience and necessity by the Interstate Commerce Commission is exempt from the BPOL tax completely or only to the extent that it has receipts from its interstate operations. Your second question is whether the receipts of the household goods carrier should have been exempt from the BPOL tax in previous years. Finally, you inquire as to whether a refund of the household goods carrier's 1997 license tax due and paid on June 16, 1997, should be made if it is determined that the business will be exempt under the amended language in the BPOL statute.
OPINION
Status of Exemption after 1997 Amendment
I conclude that the imposition of the BPOL tax on the household goods carrier has been appropriate in previous years. However, with the 1997 amendment to Code of Virginia § 58.1-3703 C 1 exempting motor carriers formerly certificated by the l.C.C., the household goods carrier will be exempt from the BPOL tax on all of its gross receipts for license years after 1997. As the department has consistently determined, the public service/interstate carrier exemption will extend to all the receipts of the exempt company, not just those attributable to its interstate operations. (See attached, page 2 Tax Commissioner Advisory Opinion January 27,1989).
Exemption Status Prior to 1997 Amendment
Code of Virginia § 13.1-620 F provides: "Whether or not classified elsewhere in the Code as public service companies the following are not required to incorporate as public service companies; ...household goods carriers..." Household goods carriers are regulated by Code of Virginia § 46.2-2100 et seq. which defines these carriers as "any person who undertakes, whether directly or by a lease or other arrangement, to transport "household goods" as herein defined, by motor vehicle for compensation, on any highway in this Commonwealth, between two or more points in this Commonwealth, whether over regular or irregular routes." To the extent that household goods carriers operate interstate rather than from point to point within the Commonwealth they are not subject to state regulation as household goods carriers. Code of Virginia § 46.2-2101.
The facts presented indicate that the household goods carrier in this case has been certificated by the l.C.C. to transport household goods between points in the Commonwealth and a number of other states. Since the company performs intrastate moving jobs, it can be assumed that the company has been certificated by the SCC or DMV to operate as a household goods carrier within the Commonwealth. It is clear from the provisions of Code of Virginia § 13.1-620 F, that a household goods carrier is not required to incorporate as a public service company and there is no evidence to suggest that this particular company has voluntarily incorporated as such.
Additionally, Code of Virginia § 58.1-2600, which provides for the taxation of public service corporations, defines a certificated motor vehicle carrier/public service corporation as:
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- a common carrier by motor vehicle, as defined in § 46.2-2000, operating over regular routes under a certificate of public convenience and necessity issued by the [State Corporation] Commission or issued on or after July 1, 1995 by the Department of Motor Vehicles.
Although the household goods carrier in this case is "certificated" in the sense it has a certificate of public convenience and necessity issued by the l.C.C. and a DMV household goods carrier certificate, it does not operate over regular routes. By its nature, a household goods carrier travels irregular routes to various locations as directed by its customers. Therefore, the term "public service corporation" does not necessarily include household goods carriers for purposes of state and local taxation.
Because the foregoing definition of certificated motor vehicle carriers in the public service corporation taxation chapter does not describe the type of work that the household goods carrier in this case performs and because household goods carriers are not required to incorporate as a public service company pursuant to Code of Virginia § 13.1-620 F, I would conclude that the household goods carrier should not have been exempted from the BPOL tax under the public service corporation exemption.
I further conclude that the amendment including l.C.C. certificated carriers will only be effective for local license taxes due after the effective date of the amendment. The household goods carrier was not exempt as of the date the 1997 license was due and no refund of the previously paid license tax is required. The household goods carrier will be exempt for the 1998 license year and all subsequent years under the new code provision which exempts motor carriers formerly certified by the l.C.C.
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/12711D
Rulings of the Tax Commissioner