Tax Type
BPOL Tax
Local Taxes
Description
Taxation of Consultants
Topic
Local Power to Tax
Date Issued
11-08-1999
November 8, 1999
Re: Request for Advisory Opinion Business, Professional and Occupational License (BPOL) Tax
Dear*************
This will respond to your letter requesting an advisory opinion regarding the local license taxation of ***** (the "Taxpayer') by the ***** (the "Town').
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 Town has classified the Taxpayer as a consultant, and taxes its receipts at the rate of $0.22 per $100.00 of gross receipts. The Taxpayer asserts that, under Code of Virginia § 58.1-3706, it should be taxed at a rate not greater than $0.03 per $100.00 on receipts it derives as a prime contractor receiving federal appropriations for certain research and development services.
The Taxpayer has filed an application for correction and documentation supporting its position with the Town. You request that the department provide "confirmation that the basis and documentation of the attached request for a refund of gross receipts tax complies with state law.'
OPINION
In order to qualify for the tax benefits afforded by Code of Virginia § 58.1-3706(D)(1), the Taxpayer is required to provide documentation to the Town that it has satisfied each of the other requirements set forth in the section. The determination of whether or not the Taxpayer has satisfied the requirements of Code of Virginia § 58.1-3706(D)(1) is a determination of fact and of federal law, rather than of local license taxation. Accordingly, you should consult your town attorney.
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/25212D
Re: Request for Advisory Opinion Business, Professional and Occupational License (BPOL) Tax
Dear*************
This will respond to your letter requesting an advisory opinion regarding the local license taxation of ***** (the "Taxpayer') by the ***** (the "Town').
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 Town has classified the Taxpayer as a consultant, and taxes its receipts at the rate of $0.22 per $100.00 of gross receipts. The Taxpayer asserts that, under Code of Virginia § 58.1-3706, it should be taxed at a rate not greater than $0.03 per $100.00 on receipts it derives as a prime contractor receiving federal appropriations for certain research and development services.
The Taxpayer has filed an application for correction and documentation supporting its position with the Town. You request that the department provide "confirmation that the basis and documentation of the attached request for a refund of gross receipts tax complies with state law.'
OPINION
-
- Code of Virginia § 58.1-3706(D)(1) provides that:
[a]ny person, firm, or corporation designated as the principal or prime contractor receiving identifiable federal appropriations for research and development services as defined in §31.205-18(a) of the Federal Acquisition Regulation in the areas of (i) computer and electronic systems, (ii) computer software, (iii) applied sciences, (iv) economic and social sciences, and (v) electronic and physical sciences shall be subject to a license tax rate not to exceed three cents per $100 of such federal funds received in payment of such contracts upon documentation provided by such person, firm or corporation to the local commissioner of revenue or finance officer confirming the applicability of this subsection.
- Code of Virginia § 58.1-3706(D)(1) provides that:
In order to qualify for the tax benefits afforded by Code of Virginia § 58.1-3706(D)(1), the Taxpayer is required to provide documentation to the Town that it has satisfied each of the other requirements set forth in the section. The determination of whether or not the Taxpayer has satisfied the requirements of Code of Virginia § 58.1-3706(D)(1) is a determination of fact and of federal law, rather than of local license taxation. Accordingly, you should consult your town attorney.
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/25212D
Rulings of the Tax Commissioner