Tax Type
BPOL Tax
Description
Contracting business; L-P gas supplier
Topic
Local Power to Tax
Date Issued
04-25-1997
April 25, 1997
Re: Request for Advisory Opinion: BPOL
Dear***********
This will respond to your letter of March 31, 1997, requesting an advisory opinion.
The license tax is a local tax which is imposed and administered by local officials. The Code of Virginia limits the involvement of the Department of Taxation to promulgating guidelines and issuing advisory opinions. However, the department shall not be required to interpret any local ordinance.
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.
FACTS
You have inquired concerning a contracting business and a L-P gas supplier that have each refused to apply for a local license claiming that they do not have a place of business in your jurisdiction. The L-P gas supplier sells bottled gas primarily to homeowners in your jurisdiction and the surrounding counties for cooking and heating. The contractor performs work in your jurisdiction and in the adjacent counties. Both businesses have phone book listings that indicate a business address within your jurisdiction. The phone numbers listed for the businesses each correspond to an office phone located in your jurisdiction and each business regularly meets with customers in their respective office locations as listed in the local phone directory. Both businesses utilize their respective office addresses for mail and maintain books and records at these locations. In the case of the L-P gas company, the gas storage tanks and delivery truck storage lot is located in an adjacent county which does not impose a BPOL tax. There is no office or phone located at the truck/gas storage site. The contracting company stores its trucks and equipment in the adjacent county when not in use at a job site. Both companies have their trucks and equipment registered in the adjacent county for personal property taxation purposes.
OPINION
L-P Gas Supplier
The gas supplier sells gas primarily to individuals for household use. It is therefore properly classified as a retailer for local license tax purposes. In order to be subject to the BPOL tax this retailer must have a "definite place of business" in your jurisdiction. As stated in the 1997 BPOL Guidelines, "definite place of business" means:
-
- ...an office or a location at which occurs a regular and continuous course of dealing where one hold's one's self out or avails one's self to the public for thirty consecutive days or more, exclusive of holidays and weekends...
The facts presented indicate that the gas supplier is holding itself out and availing itself to the public from the location of its office in your jurisdiction. Although the gas supplier stores its delivery trucks and gas inventory elsewhere, the single location where it deals with its customers is the office located in your jurisdiction. This office address is where the business phone is located, where mail is received, where transaction records are maintained and is listed in the local phone directory as the place where the public can find the business. Based on the foregoing, the gas supplier has a definite place of business in your jurisdiction and is subject to the BPOL tax imposed there.
Contractor
The contractor is subject to licensure in any jurisdiction where it has a definite place of business. The contractor's office phone, its books and records, its mailing address, and its facilities for meeting with customers are all located within an office in your jurisdiction. This same address is listed in the local phone directory as the address of the business. As with the gas supplier above, the contractor is holding itself out for business at the office located in your jurisdiction. It therefore has a definite place of business in your jurisdiction and should be subject to the BPOL tax imposed there.
I note from the facts presented that the contractor does work within and outside of your jurisdiction. The specific rules for determining the situs of a contractor's gross receipts are discussed in detail in P.D. 97-57 which is enclosed with this letter.
I hope that the above information will be beneficial to you. Although I believe this letter conforms with the law, it is written only for your guidance. If you have any further questions or comments, please do not hesitate to let me know.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12370D
Rulings of the Tax Commissioner