Tax Type
BPOL Tax
Description
Exceptions; Trucking companies
Topic
Local Power to Tax
Date Issued
02-10-1997
February 10, 1997
Re: Request for an Advisory Opinion: Local License Tax
Dear **************
This will reply to your facsimile of January 17, 1997, requesting an advisory opinion, pursuant to Code of Virginia § 58.1-3701, on interstate and intrastate trucking.
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.
I will address the questions raised in your facsimile. The response is to provide guidance only and does not constitute a formal or binding ruling.
Facts
You faxed in a Virginia Trucking Task Force issue statement regarding the license tax treatment of interstate and intrastate common carriers. Additionally, you reference an Attorney General's opinion of August 9, 1989 which held that taxing interstate trucking companies while exempting intrastate companies violated the Commerce Clause of the Constitution. The Virginia Trucking Association maintains that a locality may not impose a business license on any interstate and intrastate trucking companies. You ask whether the Attorney General's decision is still valid in light of the new BPOL legislation.
Determination
Code of Virginia § 58.1-3703 C 1 exempts public services corporations from the BPOL tax. Code of Virginia § 56-1 states that all persons authorized to transport passengers or property as a common carrier are public service corporations. Prior to 1995, trucking companies who were certified as common carriers by the State Corporation Commission were exempt from the BPOL tax. It is our interpretation that trucking companies who conduct contract carriage are subject to the BPOL tax on that portion of its activities.
The Attorney General decided in the opinion dated August 9, 1989 that a locality would violate the Commerce Clause of the U.S. Constitution if it charged interstate trucking companies a license tax or fee when companies with both interstate and intrastate certification were statutorily exempt. Thus, under this interpretation, interstate common carriers were effectively exempt from the BPOL tax.
In 1995, the trucking industry was deregulated. In Virginia, only entities which transport passengers, and in certain limited cases household goods, are required to be certified as common carriers. The distinction between trucking common carriers and contract carriers has become even more blurred. Also, the Interstate Commerce Commission was disbanded. Interstate trucking companies must now register with the Surface Transportation Board of the United States Department of Transportation.
As a result, Virginia trucking companies may not be subject to the BPOL tax exemption for public service companies since they are no longer common carriers as defined in statute. This would seem to render the Attorney General opinion of 1989 no longer relevant. Both interstate and intrastate trucking companies, provided other statutory requirements are met, would be subject to the BPOL tax.
Legislation (HB 2159) is pending before the 1997 General Assembly which would exempt interstate carriers of passengers or property formerly certified by the Interstate Commerce Commission or presently registered with the Surface Transportation Board of the United States Department of Transportation. Should this legislation be signed into law, all trucking companies, with the exception of intrastate carriers, would be exempt from the BPOL tax.
I have enclosed Code of Virginia §§ 58.1-3703 and 56-1 for your further reference. If you have any further questions regarding this advisory opinion, you may contact *********at *********** .
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12081B
Rulings of the Tax Commissioner