Tax Type
BPOL Tax
Local Taxes
Description
Specific Types of Local Licence Taxes
Topic
Local Power to Tax
Date Issued
06-09-1999
June 9, 1999
Re: Request for Advisory Opinion Business, Professional and Occupational License (BPOL) Tax
Dear*************
This will respond to your letter requesting an advisory opinion as to the local license tax classification of ***** (the "Taxpayer'). I apologize for the delay in responding to your request.
The local license fee and tax are imposed and administered by local officials. § 58.1-3701 of the Code of Virginia authorizes the department to promulgate guidelines and issue advisory opinions on local license tax issues. Additionally, § 58.1-3703.1(A)(5) authorizes the department to receive taxpayer appeals of certain local license tax assessments and to issue determinations on such appeals. However, in no case is the department required to interpret any local ordinance. Code of Virginia § 58.1-3701. The following opinion has been made subject to the facts presented to the department as summarized below. Any change in these facts or the introduction of facts by another party may lead to a different result.
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. I have enclosed copies of cited material for your review.
FACTS
The Taxpayer states that it is a real estate consulting firm which provides tenant representation, including (1) market analysis, (2) site selection, (3) lease negotiation, (4) design and construction coordination and (5) office fit-up and fit-out. The Taxpayer states that it does not list and sell or lease real estate. You seek guidance as to the license tax classification of this business.
OPINION
The Taxpayer's description of its business activities is not sufficiently detailed to make a determination regarding its business classification. However, assuming that the business activities do not include contracting or retail or wholesale sales, activities of this sort are services. Services are "things purchased by a customer which do not have physical characteristics, or which are not goods, wares, or merchandise.' 1997 BPOL Guidelines §1.
Services provided "with respect to the purchase, sale, lease, rental, or appraisal of real property' are real estate services. Guidelines §1. "Any person rendering a service for compensation as a lessor, buyer, seller, agent or broker is providing a real estate service, unless the service is specifically provided for under another section of these Guidelines.' Guidelines §8.3.2. As no other section of the Guidelines provides a different classification for services of this sort, they would generally be classified as real estate services for purposes of Code of Virginia § 58.1-3706 (A).
A taxpayer's classification for BPOL tax purposes is a question of fact to be determined by the local taxing authority. The business must be considered as a whole in determining its classification for BPOL purposes. Public Document 97-323. The information provided by the Taxpayer is not sufficient for me to make a determination as to the license tax classification of the Taxpayer.
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 *************** Tax Policy Analyst, in my Office of Tax Policy at *************.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/16554D
Rulings of the Tax Commissioner