10-69 | Virginia Tax

Tax Type

BPOL Tax

Description

Cardlock petroleum terminals are considered to be a definite place of business

Topic

Local Taxes Discussion

Taxable Transactions

Taxable Income

Date Issued

05-12-2010

May 12, 2010

Re: Request for Advisory Opinion
Business, Professional and Occupational License (BPOL) Tax

Dear *****:

This is in response to your letter in which you request an advisory opinion on behalf of your client, ***** (the "Taxpayer"), concerning its cardlock petroleum terminals and if they constitute a "definite place of business" for BPOL tax purposes. I apologize for the delay in the Department's response.

The local license fee and tax are imposed and administered by local officials. Virginia Code § 58.1-3701 authorizes the Department to issue advisory opinions on local license tax issues. The following opinion has been made subject to the facts presented to the Department summarized below. Any change in facts or the introduction of new facts may lead to a different result.

The Code of Virginia sections, regulations, and public documents cited are available on-line in the Tax Policy Library section of the Department's web site, located at www.tax.virginia.gov.

FACTS

***** (the "Taxpayer") provides fleet fueling through ***** locations in six states, with ***** locations in Virginia. Customers access the gas via unmanned electronic card readers at the pumps. The Taxpayer states that all of its customers are institutional, governmental and commercial entities who purchase fuel for resale or use in the ordinary course of business to fuel construction equipment, fleet vehicles, commercial equipment, public transportation vehicles and to heat commercial buildings. The cardlock locations are not open to the general public. The Taxpayer supplies fuel and furnishes 24-hour access to fueling, high speed pumping suitable for large commercial vehicle fuel tanks, and accessibility for oversized commercial vehicles. The Taxpayer seeks to have its cardlock operations terminals treated as "definite places of business" for BPOL tax purposes.

OPINION

- Virginia Code § 58.1-3700.1 3 defines a "definite place of business" as:

- an office or a location at which occurs a regular and continuous course of dealing for thirty consecutive days or more. A definite place of business for a person engaged in business may include a location leased or otherwise obtained from another person on a temporary or seasonal basis and real property leased to another.

Some characteristics that may help determine whether the location is a definite place of business include, but are not limited to, the following on-site activities: (1) a continuous presence; (2) having an office with a phone; (3) the reception of mail; (4) having employees; (5) record keeping; (6) and advertising or otherwise holding oneself out as engaging in business at the particular location. See Public Documents (P.D.) 97-201 (4/25/1997), 98-204 (12/7/1998) and 99-234 (8/13/1999).

Although these activities are indicative of a definite place of business, all facts and circumstances concerning the nature of a taxpayer's operations must be considered. In this case, the Taxpayer does not have an office, receive mail, keep records, or have employees continuously working at the cardlock locations.

The Taxpayer does, however, have a continuous presence at the facilities. The Taxpayer either owns or leases a parcel of land and installs, maintains, and operates the fueling equipment for an automated pumping system that make up a terminal location. The terminals are periodically inspected and maintained by employees of the Taxpayer.

In addition, customers are permitted access to the facility in order to purchase the Taxpayer's products. These customers avail themselves of these terminals because the Taxpayer advertises them and otherwise holds itself out as engaging in business at the cardlock terminals.

In P.D. 06-97 (9/29/2006), the Department opined that a wholesale marketer of petroleum products did not have a definite place of business in the locality, even though the deliveries of fuel were made at a terminal owned by another entity. The Department found that it was the owner of the terminal, rather than the wholesale marketer, who had a definite place of business in the locality. The Taxpayer can be distinguished from the petroleum wholesaler in P.D. 06-97 because it owns and operates the terminals.

Based on the Taxpayer's business model and the specific facts presented, it is my opinion that the cardlock petroleum terminals constitute a "regular and continuous" business activity. As such, the Taxpayer's cardlock petroleum terminals are considered to be a definite place of business for BPOL tax purposes.

If you have questions regarding this opinion, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.

- - - - Sincerely,

- - - - Janie E. Bowen
        Tax Commissioner

AR/1-3673865148.C

Rulings of the Tax Commissioner