Tax Type
BPOL Tax
Local Taxes
Description
Out-of-state locksmith; Definite place of business
Topic
Local Power to Tax
Date Issued
10-24-1997
October 24, 1997
Re: Request for Advisory Opinion - Business, Professional, & Occupational License
(BPOL) Tax
Dear*************
In your letter dated September 9, 1997, you asked for an advisory opinion on whether the gross receipts earned from your locksmith activities performed in the Town of *****, Virginia are subject to the BPOL tax based on the fact that your business office is located in Maryland.
Although the BPOL tax is a local license tax that is imposed and administered by local officials, the Virginia Department of Taxation may, on a limited basis according to Virginia statute, promulgate guidelines and issue advisory opinions. The department, however, is not required to interpret local ordinances.
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. Copies of cited sources are enclosed for your review.
FACTS
You state that you have a locksmith business with its principal place of location in Maryland. You also provide locksmith services for the Town of*****, Virginia (the "Town"), from which town you obtained a business license. You perform the locksmith services upon customer request that is communicated to you by pager. Further, you do not rent or own any property in the Town.
OPINION
Virginia localities may require that certain businesses pay a BPOL license fee and tax for the privilege of engaging in a licensable business within their locality. Code of Virginia §§ 58.1-3703.1 (A)(1), (3)(a). The BPOL tax is not an income tax - it is a license tax that is calculated from the gross receipts that the business earns within that locality. Code of Virginia § 58.1-3703.1 (A)(3)(a).
Specifically, an individual or entity must be engaged in a licensed business activity and perform this activity at a "definite place of business" within a locality to be subject to such locality's BPOL license and tax requirements. Code of Virginia §§ 58.1-3703.1(A)(1), (3)(a). The local license tax applies equally to Virginia businesses and out-of-state businesses that meet the taxation criteria discussed below for BPOL tax.
A "definite place of business" means an office or a location at which occurs a "regular and continuous" course of dealing for "thirty consecutive days" or more, and includes a location that may be leased or otherwise obtained and that may be used temporarily or seasonally. Code of Virginia § 58.1-3700.1. A residence can be a definite place of business if no definite place of business is maintained elsewhere. Id.
"Regular and continuous" includes making a person's services available to the public for a particular type of business within a particular time frame, e.g., by advertising, having a business telephone, or maintaining business equipment. P.D. 97-75. "Thirty consecutive days" concerns the length of time that a business activity is performed or rendered at a definite place of business and incorporates a pattern of business behavior that involves holding oneself out to the public as being engaged in business for thirty days or more. Guidelines for Business, Professional, and Occupational License Tax, (Va. Dep't of Tax'n) Jan. 1, 1997, at 4; Code of Virginia § 58.1-3703.1 (A)(3)(a)(4).
Based on the facts that you present, your locksmith business does not appear to be subject to the criteria of "definite place of business". You state that you provide services from your vehicle from where you are paged by your clients. This form of client contact would not establish a definite place of business in the Town and, consequently, would will not subject your locksmith activities to the local license tax.
I hope that the above information will be beneficial to you. Although I believe this letter conforms with the requirements of the law, it is written only for your guidance. If you have other questions, please do not hesitate to contact me.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12967G
Rulings of the Tax Commissioner