Title: Virginia Dept. of Taxation v. Blanks Oil Co.

State: virginia

Issuer: Virginia Supreme Court

Document:

Present:  All the Justices 
 
COMMONWEALTH OF VIRGINIA, 
DEPARTMENT OF TAXATION 
 
 
 
 
 
 
 
OPINION BY  
v.  Record No. 970938 
CHIEF JUSTICE HARRY L. CARRICO 
 
 
 
 
 
 
 
  February 27, 1998 
BLANKS OIL CO., INC. 
 
FROM THE CIRCUIT COURT OF CAMPBELL COUNTY 
J. Samuel Johnston, Jr., Judge 
 
 
The question for decision in this sales tax case is 
whether the situs for the assessment of a local tax on  
sales of home heating fuel is the place of delivery or the 
place of the dealer’s business.  The trial court ruled that 
the place of delivery was the proper situs for such 
assessment.  Finding this ruling erroneous, we will 
reverse. 
The levy of a local one percent general retail sales 
tax by cities and counties is authorized by Code § 58.l-
605(B).  Such tax is administered and collected by the 
State Tax Commissioner in the same manner as the state 
sales tax.  Code § 58.1-605(D).  The local taxes so 
collected are paid into a special fund of the state 
treasury and credited to the account of each particular 
city or county levying a local sales tax.  Code § 58.1-
605(E).  The local sales tax applies to home heating fuel 
unless exempted by a duly adopted ordinance of a local 
governing body.  Code § 58.1-609.13. 
In a motion for judgment filed against the 
Commonwealth of Virginia Department of Taxation (the 
Department), Blanks Oil Co., Inc. (Blanks), whose place of 
business is located in Campbell County,* sought the 
correction of an allegedly erroneous assessment of a one 
percent local sales tax on home heating fuel that Blanks 
delivered to its customers in the counties of Pittsylvania 
and Bedford.  Pittsylvania and Bedford exempt the sale of 
such fuel from the local sales tax; Campbell does not. 
 
The trial court held that because the proper situs of 
the assessment of the local tax on sales of home heating 
fuel was the place of delivery and because such sales were 
exempt from the tax in the counties of Pittsylvania and 
Bedford, where the deliveries in question were made, the 
assessment against Blanks was erroneous.  Accordingly, the 
court ordered that the Department refund to Blanks 
$2,536.40 for local sales taxes assessed in 1992 on 
deliveries Blanks made in such counties.  We awarded the 
Department this appeal. 
Well-established rules govern the disposition of the 
question presented by this appeal.  “Any assessment of a 
                     
* It is undisputed that Blanks’ place of business in 
Campbell County is where orders for home heating oil are 
placed and processed and where accounting functions are 
performed. 
 
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tax by the Department shall be deemed prima facie correct.”  
Code § 58.1-205(1).  The burden is upon the taxpayer 
challenging an assessment to show that the assessment is 
erroneous or otherwise improper.  Code § 58.1-1825; 
Department of Taxation v. Lucky Stores, Inc., 217 Va. 121, 
127, 225 S.E.2d 870, 874 (1976); Union Tanning Co. v. 
Commonwealth, 123 Va. 610, 632-33, 96 S.E. 780, 786-87 
(1918).  The State Tax Commissioner is empowered to issue 
regulations relating to the interpretation and enforcement 
of the laws governing taxes administered by the Department.  
Code § 58.1-203.  And the Commissioner’s construction of a 
tax statute, while not binding upon this Court, is entitled 
to great weight.  Department of Taxation v. Wellmore Coal 
Corp., 228 Va. 149, 154, 320 S.E.2d 509, 511 (1984); 
Webster v. Department of Taxation, 219 Va. 81, 84-85, 245 
S.E.2d 252, 255 (1978).  
In its final order, the trial court stated that City 
of Richmond v. Petroleum Marketers, Inc., 221 Va. 372, 269 
S.E.2d 389 (1980), supported the court’s ruling that 
Blanks’ assessment was erroneous.  Blanks cites Petroleum 
Marketers on appeal, but we find that the case is 
inapposite. 
Petroleum Marketers did not involve a sales tax, and 
Code § 58.1-605, at issue here, was not implicated in any 
 
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way.  That case determined whether a fuel oil dealer was 
engaged in the business of a wholesale merchant in the City 
of Richmond within the meaning of a provision of the City 
Code which imposed a wholesale license tax upon such 
merchants. 
he merchant in question maintained its place of 
business in Henrico County, where all its customer 
contracts were made, but delivered fuel oil to customers in 
the adjoining City of Richmond.  The section of the City 
Code imposing the wholesale merchants license tax was 
silent on the issue of place of sale.  Id. at 373 n*, 269 
S.E.2d at 390 n*.  Accordingly, we looked to the Uniform 
Commercial Code (UCC) for a definition of the terms “sale” 
and “place of sale” as well as for assistance in 
determining whether “there [was] a sufficient nexus between 
the activities of Petroleum [Marketers] and the City to 
justify the City classifying Petroleum [Marketers] as a 
wholesale merchant subject to the City’s license tax.”  Id. 
at 374, 269 S.E.2d at 390.  
iting several provisions of the UCC, we held that 
“title [to the fuel oil] passed when the product was pumped 
out of [the merchant’s] tanks and into whatever facility 
[in the City of Richmond] its customer provided.” Id.  
Accordingly, we concluded that the merchant had made 
 
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“wholesale sales within the City of Richmond . . . and  
. . . was a wholesale merchant within that jurisdiction for 
purposes of [the wholesale merchants license tax].”  Id. at 
375, 269 S.E.2d at 390. 
Here, unlike the Richmond City Code, the statute 
authorizing the local sales tax in question is not silent 
on the issue of place of sale.  The statute fixes the place 
of business of the dealer as the place of sale.  Code      
§ 58.1-605(E) provides that the basis of the credit to the 
cities and counties levying a local sales tax “shall be the 
city or county in which the sales were made . . ., namely, 
the city or county of location of each place of business of 
every dealer paying the tax to the Commonwealth without 
regard to the city or county of possible use by the 
purchasers.” (Emphasis added.) 
Furthermore, consistent with the provisions of Code   
§ 58.1-605, a long-standing regulation promulgated by the 
Department also fixes the place of business of the dealer 
as the place of sale.  Published in 23 Va. Admin. Code 10-
210-630(E)(1), the regulation provides as follows: 
The local 1% sales tax will be allocated to the 
locality in which the place of business from which the 
sale is made is located.  Place of business is defined 
as an established business location at which orders 
are regularly received.  Therefore the situs of sale 
shall be the business location that first takes the 
purchaser’s order, either in person, by purchase 
 
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order, or by letter or telephone, regardless of the 
location of the merchandise or the point of acceptance 
of the order or shipment. 
 
Blanks maintains, however, that this regulation is 
inconsistent with Code § 8.2-401(2), a part of the Uniform 
Commercial Code, and, therefore, violative of Code § 58.1-
203(A), which provides that the Department’s regulations 
“shall not be inconsistent with the Constitutions and 
applicable laws of this Commonwealth and of the United 
States.” 
Code § 8.2-401(2) provides that “title passes to the 
buyer at the time and place at which the seller completes 
his performance with reference to the physical delivery of 
the goods.”  Here, Blanks argues, it completed its 
performance and title passed when the home heating oil was 
delivered and metered and invoices were rendered to its 
customers in Pittsylvania and Bedford counties.  Blanks 
asserts that we are “bound by the UCC” and must recognize 
the place of delivery as the place of sale in this case. 
Blanks acknowledges that the General Assembly may 
override a provision of the UCC by the enactment of other 
legislation.  But, Blanks says, the General Assembly’s 
enactment of the legislation authorizing the assessment of 
a local sales tax did not override the UCC’s § 8.2-401(2). 
 
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We disagree with Blanks.  Code § 8.2-401(2) is a 
statute of general application while Code §§ 58.1-605 and –
609.13 are statutes of specific application.  Code § 8.2-
401(2) speaks to innumerable types of sales generally; Code 
§ 58.1-605 deals with the specific subject of local sales 
taxes and Code § 58.1-609.13 with the sale of a specific 
commodity, viz., home heating fuel. 
“[W]hen one statute speaks to a subject in a general 
way and another deals with a part of the same subject in a 
more specific manner . . . and . . . they conflict, the 
latter prevails.”  Virginia Nat’l Bank v. Harris, 220 Va. 
336, 340, 257 S.E.2d 867, 870 (1979); see also County of 
Fairfax v. Century Concrete Services, Inc., 254 Va. 423, 
427, 492 S.E.2d 648, 650 (1997); Dodson v. Potomac Mack 
Sales & Service, Inc., 241 Va. 89, 94-95, 400 S.E.2d 178, 
181 (1991).  Hence, we conclude that the enactment of Code    
§§ 58.1-605 and –609.13 did override Code § 8.2-401(2) to 
the extent that the former sections fix the place of sale 
of home heating fuel for the purpose of assessing the local 
sales tax. 
Blanks contends, however, that Code § 58.1-605 is 
merely “an administrative statute.”  Blanks argues that the 
Code section serves only to enable the Commissioner to make 
the ministerial determination of a place of sale for the 
 
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purpose of crediting the accounts of the localities levying 
the local sales tax.  
Again, we disagree with Blanks.  In our opinion, Code 
§ 58.1-605 is a substantive measure, and it displays the 
clear legislative intent to make the city or county of the 
dealer’s place of business the situs for the assessment of 
the local sales tax as well as the basis for the 
Commissioner to credit the accounts of the localities 
levying the tax. 
Accordingly, we will reverse the judgment of the trial 
court and enter final judgment here in favor of the 
Commissioner. 
Reversed and final judgment. 
 
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