Tax Type
BPOL Tax
Description
General; Car sales
Topic
Local Power to Tax
Date Issued
08-15-1997
August 15, 1997
Re: Request for Advisory Opinion: BPOL
Dear***********
This will respond to your letter of August 6, 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
A used car dealer in your town accepts cars on trade as partial consideration for the cars he sells. You have inquired as to whether the value of the traded vehicle should be included in the dealer's gross receipts for purposes of calculating his BPOL tax liability.
OPINION
Section 58.1-3734.1 B Code of Virginia provides that the trade in allowance in the sale of a car shall not be included in the calculation of the dealer's gross receipts for local license tax purposes. I have attached a copy of this code section for your reference.
I hope that the above information will be beneficial to you. If you have any further questions or comments, please do not hesitate to let me know.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12812D
Rulings of the Tax Commissioner