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Ezel / Tax Rulings / VA
VA P.D. 10-278 BPOL Tax 2010-12-22

Did a government contractor's staffed trailer on a military base create a definite place of business and situs for BPOL service receipts?

Short answer: Yes. Although the trailer had no public sign, mail, solicitation, or advertised phone number, the contractor maintained a continuous presence, furniture, computers, a phone, meetings, and administrative staff there for more than 30 days. Virginia treated it as a definite place of business, so the city where the base was located could tax receipts from repair services performed there.

Apply this to your situation

This page answers the general question as of 2010. Ezel answers yours, under current Virginia tax law, with citations.

Currency note: this ruling is from 2010
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is a Virginia Tax Commissioner advisory opinion, not a completed taxpayer-assessment determination. It addressed one military-base trailer, staffing pattern, equipment, phone, meetings, duration, and repair work under the BPOL rules in effect in 2010. Local ordinances and different temporary-site facts may produce a different result. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Subject

Trailer considered to be a definite place of business for BPOL tax purposes.

Plain-English summary

Virginia advised that the contractor's military-base trailer was a definite place of business and that the base city's BPOL tax reached repair-service receipts earned there. The contractor leased a trailer with desks, computers, and a landline. Repair personnel used it for meetings and contact with the main office, while clerical staff organized technical documents and provided administrative support.

The trailer did not receive mail, advertise, display the contractor's name, negotiate contracts, or solicit business. Those facts weighed against definite-place status but were not controlling.

The continuous presence, office equipment, phone, meetings, employees, and support for ongoing base work showed a regular and continuous course of dealing for at least 30 days. Virginia therefore treated the trailer as a definite place of business.

Because the repair services were performed at that definite place in City B, the related gross receipts were sitused there for BPOL tax rather than to the contractor's main City A office.

What this means for you

  • A temporary-looking trailer can become a definite place of business through sustained operations.
  • Public signage, mail, or sales solicitation are relevant but not required in every case.
  • Employees, phones, computers, meetings, and administrative support can establish a continuous local presence.
  • Service receipts are generally sitused first to the definite place where the service is performed.

Common questions

Did military restrictions against signage prevent local BPOL situs?

No. Virginia relied on the contractor's actual continuous operations inside the trailer.

Were receipts sitused to the main office because it controlled the contract?

No. The repair services were performed at the definite place of business on the base.

Citations and references

  • Va. Code §§ 58.1-3700.1, 58.1-3701, and 58.1-3703.1(A)(3)(a)(4) and (A)(3)(b).
  • P.D. 97-201, P.D. 10-104, and P.D. 02-153.

Source

Original ruling text

December 22, 2010

Re: Request for Advisory Opinion

Business, Professional and Occupational License Tax

Dear *:

This is in response to your letter in which you request an advisory opinion as to the proper tax treatment of * (the "Taxpayer") for purposes of the Business, Professional and Occupational License (BPOL) tax.

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 these facts or the introduction of new facts may lead to a different result.

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

FACTS

The Taxpayer is a government contractor with a definite place of business in the * ("City A"). The Taxpayer is primarily engaged in providing repair services at military installations in City A and surrounding localities. City A has classified the Taxpayer as a business service and has assessed BPOL tax based on the gross receipts generated from the services directed and controlled from the definite place of business within its borders.

The Taxpayer is currently performing repair services on vehicles at a military base located in the * ("City B"). The Taxpayer leases a trailer located on the base that is furnished with desks and computers. Repair personnel use the trailer for meetings and to interact with the City A facility. Clerical staff employed at the trailer provide administrative support and organize technical documentation. A telephone land line is installed in the trailer, but the phone number is not advertised to the public.

The name of the Taxpayer is not posted on any signage on or near the trailer pursuant to military requirements. The Taxpayer does not negotiate any contracts or solicit any business from the trailer. The Taxpayer did not receive mail at the trailer and contracts performed at the base list the City A office as the Taxpayer's address and place of contact.

City B has contacted the Taxpayer concerning its business license obligations to City B. City B believes the activities conducted by the Taxpayer as the military base are subject to licensure in City B. City A avers that the Taxpayer does not have a definite place of business in City B, and all the services conducted at the base are directed and controlled from the office in City A. City A requests an advisory opinion as to whether the Taxpayer is subject to the BPOL tax in City B.

OPINION

Virginia Code § 58.1-3700.1 defines a "definite place of business" as an office or a location at which occurs a regular and continuous course of dealing for 30 consecutive days or more. Some characteristics that may help determine whether the location is a definite place of business include, but (are not limited to, the following on­site 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 Document (P.D.) 97-201 (4/25/1997).

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 receive mail, keep records, or hold itself out as engaging in business at the trailer located in City B.

The Taxpayer does, however, have a continuous presence at the trailer. The Taxpayer maintains a phone line, computers and furniture in the trailer. Repair personnel use the trailer for meetings and to contact the City A facility and administrative staff assigned, either temporarily or permanently, at the trailer support the services performed at the base.

The Department has previously addressed the issue of trailers becoming a definite place of business with regard to construction contractors. While not directly on point, such analysis appears to be analogous to the circumstances currently under consideration. In P.D. 10-104 (7/18/2010) and P.D. 02-153 (12/11/2002), the Department opined that contractors that maintained a trailer at a particular site on a daily and continuous basis for 30 days may have established a definite place of business at the locality in which the trailers were located. The Department found that the contractor's physical presence, along with having some of the characteristics of having a definite place of business, such as having a phone was indicative of having a definite place of business.

Based on the specific facts presented, it is my opinion that the Taxpayer's usage of the trailer constitutes a "regular and continuous" business activity. As such, the Taxpayer's trailer located in City B is considered to be a definite place of business for BPOL tax purposes.

In determining the situs of cross receipts, Va. Code §§ 58.1-3703.1 A 3 a 4 and 58.1-3703.1 A 3 b state that receipts from services are to be taxed based on (in order): (i) the definite place of business at which the service is performed, or if not performed at any definite place of business, (ii) the place from which the service is directed or controlled; or as a last resort (iii) when it is impossible or impractical to determine where the service is performed or from where the service is directed or controlled, by payroll apportionment between definite places of business.

In this case, the Taxpayer's repair services are being performed at a definite place of business in City B. As such, the gross receipts generated from the repair services accruing in City B are subject to tax by City B.

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

Sincerely,

Linda D. Foster

Deputy Tax Commissioner

AR/1-4357863728.B

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