May 19, 2017
Re: Appeal: Final Determination
Locality: *****
Taxpayer: *****
Business, Professional and Occupational License Tax
Dear *****:
This final state determination is issued upon the application for correction filed on behalf of ***** (the “Taxpayer”) with the Department of Taxation. You seek a reconsideration of Public Document (P.D.) 17-10 (2/24/2017) concerning the Business, Professional and Occupational License (BPOL) tax assessments issued to the Taxpayer by ***** (the “County”) for the 2016 tax year.
The BPOL tax is imposed and administered by local officials. Virginia Code § 58.1-3703.1 authorizes the Department to issue determinations on taxpayer appeals of BPOL tax assessments. On appeal, a BPOL tax assessment is deemed prima facie correct, i.e., the local assessment will stand unless the taxpayer proves that it is incorrect.
The following determination is based on the facts presented to the Department summarized below. The Code of Virginia sections, and public documents cited are available on-line at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department's web site.
FACTS
In P.D. 17-10, the Department upheld the County's BPOL classification that the Taxpayer was a contractor. The Taxpayer does not refute the Department's finding, but requests clarification on the scope of authority granted to the Locality.
ANALYSIS
The County classified the Taxpayer as a contractor, and required the Taxpayer to obtain a contractor's license from the Department of Professional Occupational Regulation (DPOR) before being issued a business license. The Taxpayer argues that the County lacks the authority to exercise mandates under Va. Code § 58.1-1100 for BPOL purposes. In P.D. 17-10, the Department upheld the County's final determination, classifying the Taxpayer as a contractor for BPOL purposes. The Department found the locality's determination to be consistent with Title 23 of the Virginia Administrative Code 10-500-120.
In its original appeal, the Taxpayer argued that even if the Locality's classification was upheld, the County lacked the authority to require the Taxpayer to obtain a contractor's license pursuant to Va. Code § 58.1-1100. The Taxpayer contends that such requirement exceeds the scope of the County's authority established under Va. Code § 58.1-3700 et seq.
After again reviewing the County's final determination, the Department does not agree with this interpretation. While the County correctly states that the Taxpayer is required to provide written certification that it has obtained or is maintaining worker's compensation coverage for its employees in order to be granted a BPOL license as a contractor, the County admits the contractor's license under Va. Code § 54.1-1100 et seq. and the BPOL license under Va. Code § 58.1-3714 include different definitions and serve different purposes.
In P.D. 97-323 (8/1/1997), the Department determined state contractor's licensing serves a different purpose than BPOL classification. See Op. Att'y Gen.114 (1994). While other statutes and regulations can be instructive in determining classification for BPOL tax purposes, they are not determinative.
DETERMINATION
As indicated above, the Department agrees with the Taxpayer that a state contractor's license is not required in order to be classified as a contractor for BPOL tax purposes. Further, the BPOL appeals process under Va. Code § 58.1-3703.1 A 6 a limits the Department's authority to determinations regarding BPOL tax assessment and classification disputes. Because there no longer appears to be a dispute as to the Taxpayer's classification for BPOL tax purposes, the Department considers the matter closed.
The Department also lacks the authority to determine whether any business would be required to obtain a state contractor's license. In order to determine whether it is required to obtain a state contractor's license, the Taxpayer should contact the Board of Contractors at the Department of Professional and Occupational Regulation (DPOR).
If you have any questions regarding this response, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/1226.D