Tax Type
BPOL Tax
Local Taxes
Description
Printer; Discussion of manufacturing
Topic
Local Power to Tax
Date Issued
09-30-1999
September 30, 1999
Re: Request for Advisory Opinion
Business, Professional and Occupational License (BPOL) Tax
Dear*******************
This is in response to your letter requesting an advisory opinion on the potential BPOL tax liability of a "job printer' located in the ***** Virginia. I apologize for the delay in responding to your request.
The local license fee and tax are imposed and administered by local officials. Section 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
You have asked how ***** (the "Taxpayer') should be classified for local license tax purposes. The Taxpayer describes its business as ***** engaging in the activities of "book printing, business forms, pamphlets, lithography and other forms of job printing.' The Taxpayer states that substantially all of these items are sold at wholesale at the place of manufacture to industrial and commercial users, with less than 0.7% of its sales attributable to individuals. The Taxpayer cites an audit performed by the ***** in which it was classified as a commercial printer and therefore entitled to the manufacturing exemption under Code of Virginia (the specific citation was omitted from the auditor's letter and the locality requesting the opinion did not supply the department with any corroborating information). You ask if the Taxpayer is a manufacturer for BPOL purposes.
OPINION
The following advisory opinion is offered without benefit of factual information provided directly from the town. "Since a consistent theme of local taxation is that the initial factual determination underlying a specific classification decision has been settled by the locality's commissioner of the revenue,' (see 1996 Op. Va. Att'y Gen. at 215), will provide you with appropriate references to case law and to recently issued Public Documents that may help you in your determinations.
Printers as Manufacturers
In Richmond Printers' Association, Inc. v. City of Richmond, the Circuit Court for the City of Richmond held that printers were manufacturers. Furthermore, in a Letter Ruling dated April 11, 1985, the Tax Commissioner qualified the classification of printers as manufacturers by stating that "this only refers to printing in the traditional sense, in which presses of various types are used.' This opinion was updated to reflect the modern technology utilized by a job printer in the production of a book. Public Document (P.D.) 99-200 (7/23/99) found that the making of a camera-ready proof of a book from an original manuscript is for all intent and purposes, the equivalent of the making of a book that is available for sale to the public. The final product is quite different in terms of usability, quality and adaptability when compared to the original manuscript. In other words, it meets the three part test in determining what is a manufacturer. Desk top publishing, on the other hand, does not meet the criteria set forth in P.D. 99-200.
P.D. 99-239 (8/23/99) provides commissioners of the revenue and various taxpayers with a useful set of guidelines as to what forms of printing activity constitute "manufacturing' and are exempt from the BPOL tax. A factual determination must be made at the local level as to whether or not a business qualifies as a printer under the current guidelines.
I hope that this information is useful to you. Although I believe that this letter conforms with the requirements of the law, it is only written for your guidance. If you have any other questions, please do not hesitate to contact ***** at *****
Sincerely,
Danny M. Payne
Tax Commissioner
Re: Request for Advisory Opinion
Business, Professional and Occupational License (BPOL) Tax
Dear*******************
This is in response to your letter requesting an advisory opinion on the potential BPOL tax liability of a "job printer' located in the ***** Virginia. I apologize for the delay in responding to your request.
The local license fee and tax are imposed and administered by local officials. Section 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
You have asked how ***** (the "Taxpayer') should be classified for local license tax purposes. The Taxpayer describes its business as ***** engaging in the activities of "book printing, business forms, pamphlets, lithography and other forms of job printing.' The Taxpayer states that substantially all of these items are sold at wholesale at the place of manufacture to industrial and commercial users, with less than 0.7% of its sales attributable to individuals. The Taxpayer cites an audit performed by the ***** in which it was classified as a commercial printer and therefore entitled to the manufacturing exemption under Code of Virginia (the specific citation was omitted from the auditor's letter and the locality requesting the opinion did not supply the department with any corroborating information). You ask if the Taxpayer is a manufacturer for BPOL purposes.
OPINION
The following advisory opinion is offered without benefit of factual information provided directly from the town. "Since a consistent theme of local taxation is that the initial factual determination underlying a specific classification decision has been settled by the locality's commissioner of the revenue,' (see 1996 Op. Va. Att'y Gen. at 215), will provide you with appropriate references to case law and to recently issued Public Documents that may help you in your determinations.
Printers as Manufacturers
In Richmond Printers' Association, Inc. v. City of Richmond, the Circuit Court for the City of Richmond held that printers were manufacturers. Furthermore, in a Letter Ruling dated April 11, 1985, the Tax Commissioner qualified the classification of printers as manufacturers by stating that "this only refers to printing in the traditional sense, in which presses of various types are used.' This opinion was updated to reflect the modern technology utilized by a job printer in the production of a book. Public Document (P.D.) 99-200 (7/23/99) found that the making of a camera-ready proof of a book from an original manuscript is for all intent and purposes, the equivalent of the making of a book that is available for sale to the public. The final product is quite different in terms of usability, quality and adaptability when compared to the original manuscript. In other words, it meets the three part test in determining what is a manufacturer. Desk top publishing, on the other hand, does not meet the criteria set forth in P.D. 99-200.
P.D. 99-239 (8/23/99) provides commissioners of the revenue and various taxpayers with a useful set of guidelines as to what forms of printing activity constitute "manufacturing' and are exempt from the BPOL tax. A factual determination must be made at the local level as to whether or not a business qualifies as a printer under the current guidelines.
I hope that this information is useful to you. Although I believe that this letter conforms with the requirements of the law, it is only written for your guidance. If you have any other questions, please do not hesitate to contact ***** at *****
Sincerely,
Danny M. Payne
Tax Commissioner
Rulings of the Tax Commissioner