Was a gasoline retailer's BPOL tax based on gallons sold or gross receipts, and was its 2013 refund timely?

Plain-English summary

The retailer argued that BPOL tax on gasoline should be measured by gallons sold rather than receipts. Virginia rejected that method because BPOL is a gross-receipts tax and gross receipts means the whole, entire, total receipts without deduction.

The 2013 refund request, filed in February 2017, was outside the three-year period. For 2014 and 2015, all gasoline-sale gross receipts remained taxable, so the city properly denied the refunds.

Citations and references

• Va. Code § 58.1-3980
• Va. Code § 58.1-3700.1

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 17-212

Original ruling text

December 20, 2017

Re: Appeal of Final Local Determination

Taxpayer: *

Locality: *

Business, Professional and Occupational License (BPOL)

Dear *:

This final state determination is issued upon the application for correction filed by you on behalf of * (the “Taxpayer”), with the Department of Taxation. You request a refund of Business, Professional and Occupational License (BPOL) taxes paid by the Taxpayer to the *** (the “City”) for the 2013 through 2015 tax years.

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 document cited are available online at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department's web site.

FACTS

The Taxpayer was a retailer with a definite place of business in the City. The Taxpayer filed for refunds of BPOL tax paid to the City for the 2013 through 2015 tax years, contending that it should have paid BPOL tax on gasoline sales based on number of gallons sold, not gross receipts. In its final determination, the City denied the r efund claim for the 2013 tax year because it was not made within the statute of limitations. The City also denied the refunds on the basis that the BPOL tax had been properly imposed on the gross receipts attributable to the gasoline sales. The Taxpayer appealed to the Department, repeating its contention that BPOL tax should have been imposed on the number of gallons of gasoline sold, not gross receipts.

ANALYSIS

Limitations on Appeals of Local Tax Assessments

Virginia Code § 58.1-3980 provides that any person aggrieved by an assessment of local taxes:

may, within three years from the last day of the tax year for which such assessment is made, or within one year from the date of the assessment, whichever is later , apply to the commissioner of the revenue or such other official who made the assessment for a correction thereof. [Emphasis added.]

The term “tax year” generally applies to the calendar year for which local taxes are assessed under Virginia law. See Public Document (P.D.) 08-136 (7/30/2008). The Taxpayer filed the request for refunds in February 2017 for all the tax years at issue. Because more than three years had passed since the end of the 2013 tax year, the refund claim for the 2013 tax year is barred by the statute of limitations. Accordingly, the Department's determination will be limited to the 2014 and 2015 tax years.

Gross Receipts

The BPOL tax is a gross receipts based tax imposed upon businesses, trades, professions, occupations and callings and the persons engaged therein for the privilege of conducting business in a local jurisdiction. Virginia Code § 58.1-3700.1 defines “gross receipts” as the “whole, entire, total receipts, without deduction.” For retailers selling gasoline to consumers, the BPOL tax is imposed on the gross receipts attributable to the gasoline sales, not on the number of gallons of gasoline sold.

DETERMINATION

The Taxpayer's refund claim as to the 2013 tax year is barred because it was filed in February 2017, more than three years after the last day of the 2013 tax year. In addition, the Taxpayer was required to report all gross receipts for gasoline sales for the 2014 and 2015 tax years. Therefore, the City's determination denying the refunds is upheld.

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

Sincerely,

Craig M. Burns

Tax Commissioner

AR/1383.M