Tax Type
BPOL Tax
Description
Utility company processing fee
Topic
Local Power to Tax
Date Issued
01-14-1997
January 14, 1997
Re: Request for Advisory Opinion: Local License Tax
Dear**********
This will rep y to your facsimile of January 2, 1997, requesting an advisory opinion, pursuant to Code of Virginia § 58.1-3701, on the imposition of a fee on utility companies.
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, it is not required to interpret any local ordinance.
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
In your facsimile, your ask whether a locality may charge utility companies a $30.00 processing fee.
Determination
Code of Virginia § 58.1-3703 C 1 provides that no locality shall impose a license fee or levy any license tax on any public service corporation except as provided in ******* § 58.1-3731. Code of Virginia § 58.1-3731 states that:
-
- Every [locality] is hereby authorized to impose a license tax, in addition to any tax levied under Chapter 26 of this title, on (I) telephone and telegraph companies, (ii) water companies, and (iii) heat, light and power companies at a rate not to exceed one-half of one percent of the gross receipts of such company accruing from sales to the ultimate consumer in such [locality]. (Emphasis Added .)
Under Code of Virginia § 58.1-3731, a locality may only impose a license tax of one and one half percent of gross receipts in addition to the license tax imposed in Chapter 26. It is not authorized to impose any type of fee.
I hope that the above information will be beneficial to you. If you have any questions, please do not hesitate to let me know.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP12005B
Rulings of the Tax Commissioner