Tax Type
Corporation Income Tax
Description
Corporations Conducting Entire Business Within Virginia
Topic
Allocation and Apportionment
Date Issued
10-30-1998
October 30, 1998
Re: Request for Ruling: Corporate Income Tax
Dear *****
This will respond to your letter which you request a nexus ruling regarding Virginia corporate income tax on behalf of an anonymous client (the ``Taxpayer').
FACTS
The Taxpayer is a wholesale distributor located outside Virginia. Orders for the Taxpayer's merchandise are solicited from outside Virginia and the merchandise is delivered from distribution centers located outside Virginia in the Taxpayer's own trucks. The Taxpayer does not own or lease any property in Virginia. You request a ruling if the Taxpayer has the requisite taxing nexus in Virginia to subject it to tax in Virginia.
RULING
A tax Is imposed on the Virginia taxable income of every foreign corporation having income from Virginia sources, unless specifically exempted. Public Law (P.L.) 86-272, codified at 15 U.S.C.A. Sec. 381-384, prohibits Virginia from imposing a net income tax on the Taxpayer when the only contact with Virginia is the solicitation of sales of tangible personal property.
Based on the information presented, the Taxpayer's activities do not exceed the solicitation of orders. The only contact the Taxpayer has with Virginia is the delivery of merchandise in company trucks. In Commonwealth v. National Private Truck Council 253 Va. 74, 480 S.E.2d 500 (1997), the Virginia Supreme Court overturned the department's policy that deliveries into Virginia using one's own trucks exceeded the protection afforded by P.L. 86-272. The court held that Congress did not identify any manner of delivery to qualify for immunity under P.L. 86-272. Because P.L. 86-272 does not specify common carrier, contract or private carrier, or any other particular method of delivery to qualify for protection, the court ruled that Virginia could not add qualifications or conditions for immunity from state taxation. Assuming the Taxpayer continues its limited activities presented in your letter, the Taxpayer is exempt from Virginia income tax pursuant to P.L. 86-272.
If you have any questions regarding this ruling, please contact ***** of the Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/16083P
Re: Request for Ruling: Corporate Income Tax
Dear *****
This will respond to your letter which you request a nexus ruling regarding Virginia corporate income tax on behalf of an anonymous client (the ``Taxpayer').
FACTS
The Taxpayer is a wholesale distributor located outside Virginia. Orders for the Taxpayer's merchandise are solicited from outside Virginia and the merchandise is delivered from distribution centers located outside Virginia in the Taxpayer's own trucks. The Taxpayer does not own or lease any property in Virginia. You request a ruling if the Taxpayer has the requisite taxing nexus in Virginia to subject it to tax in Virginia.
RULING
A tax Is imposed on the Virginia taxable income of every foreign corporation having income from Virginia sources, unless specifically exempted. Public Law (P.L.) 86-272, codified at 15 U.S.C.A. Sec. 381-384, prohibits Virginia from imposing a net income tax on the Taxpayer when the only contact with Virginia is the solicitation of sales of tangible personal property.
Based on the information presented, the Taxpayer's activities do not exceed the solicitation of orders. The only contact the Taxpayer has with Virginia is the delivery of merchandise in company trucks. In Commonwealth v. National Private Truck Council 253 Va. 74, 480 S.E.2d 500 (1997), the Virginia Supreme Court overturned the department's policy that deliveries into Virginia using one's own trucks exceeded the protection afforded by P.L. 86-272. The court held that Congress did not identify any manner of delivery to qualify for immunity under P.L. 86-272. Because P.L. 86-272 does not specify common carrier, contract or private carrier, or any other particular method of delivery to qualify for protection, the court ruled that Virginia could not add qualifications or conditions for immunity from state taxation. Assuming the Taxpayer continues its limited activities presented in your letter, the Taxpayer is exempt from Virginia income tax pursuant to P.L. 86-272.
If you have any questions regarding this ruling, please contact ***** of the Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/16083P
Rulings of the Tax Commissioner