Present: Hassell, C.J., Keenan, Koontz, Lemons, Goodwyn, and 

Millette, JJ., and Russell, S.J. 

CITY OF LYNCHBURG 

 OPINION BY 

v. Record No. 081344 SENIOR JUSTICE CHARLES S. RUSSELL 

 April 17, 2009 

ENGLISH CONSTRUCTION COMPANY, 

INCORPORATED, ET AL. 

FROM THE CIRCUIT COURT OF THE CITY OF LYNCHBURG 

Mosby G. Perrow, III, Judge 

 This appeal involves the power of a city to impose 

business license taxes on the gross receipts of a contractor, 

whose principal place of business is within the city, from 

business done outside the city. The city contends that it is 

entitled to impose taxes on all the contractor’s gross 

receipts from work done anywhere in the Commonwealth, subject 

only to the contractor’s right to deduct taxes actually paid 

to other localities on those receipts. The contractor 

contends that the city has the power to tax only those 

extraterritorial receipts derived from business done in 

localities in which the contractor has no definite place of 

business. This issue arises because some localities, although 

authorized by law to impose business license taxes on the 

gross receipts of contractors for work done locally, 

nevertheless decline to impose such taxes. The city contends 

that it has the authority to tax such extraterritorial 

receipts which would otherwise remain untaxed. 
Facts and Proceedings

 The parties filed a written stipulation of facts in the 

circuit court and agree that the case presents a pure question 

of law. English Construction Company, Incorporated, and W.C. 

English, Inc. (collectively, English) are “contractors” as 

defined by Code § 58.1-3714(D) and have their headquarters and 

principal offices in the City of Lynchburg (the City). The 

City has, for many years, assessed business license taxes on 

the gross receipts of general contractors having their 

principal offices in the City, including receipts from 

construction projects in other localities, subject to a 

deduction for license taxes the contractor has actually paid 

to other localities on the same receipts. 

 In 2004, pursuant to an audit of English’s records by the 

City’s Commissioner of the Revenue, the City identified gross 

receipts in excess of $115,000,000 that English had received 

from work done in localities outside the City in the tax years 

2001 through 2004, which had not been reported to the City. 

English contended that the City was not authorized to tax 

those receipts, but after some adjustments for taxes paid to 

other localities, English paid the taxes assessed by the City 

on the receipts at issue. English maintained a “definite 

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place of business,” as defined by Code § 58.1-3700.1,1 in each 

of the localities in which it engaged in the construction 

projects that generated the disputed receipts, but those 

localities had imposed no license taxes on them. 

 English filed, on behalf of the two English corporations, 

applications for relief from erroneous assessments, pursuant 

to Code § 58.1-3984, against the City. The parties stipulated 

the facts and submitted the cases together to the circuit 

court on cross-motions for summary judgment.2

 In letter opinions, the court ruled that the City had no 

statutory authority to assess license taxes on the gross 

receipts of contractors derived from business done within any 

Virginia locality outside the City, when the contractor had a 

definite place of business in such a locality. The court 

entered summary judgments in favor of the two English 

corporations, denied the City’s motions for summary judgment, 

 1

 “ ‘Definite place of business’ means an office or a 

location at which occurs a regular and continuous course of 

dealing for thirty consecutive days or more.” Code § 58.1-

3700.1. The statutory definition includes rented property and 

even a person’s personal residence in certain circumstances. 

Id.

2

 Although the parties agreed that the case was 

appropriate for summary judgment, the City was permitted to 

present limited evidence concerning the prevailing 

administrative practices in other Virginia cities and counties 

relating to the taxation of contractors’ extraterritorial 

gross receipts. 

3
ordered an abatement of the challenged assessments and ordered 

a refund of the disputed taxes. We awarded the City an 

appeal.3

Analysis

For the purposes of this appeal, it is useful to divide 

the categories of contractors’ gross receipts affected by the 

business license tax statutes into several classifications: 

(1) Receipts from work done within the locality in 

which the principal office is located; 

(2) Receipts from work done in another locality in 

which the contractor has a definite place of 

business but which are not taxed by that other 

locality; 

(3) Receipts from work done in another locality in 

which the contractor has a definite place of 

business and which are taxed by that other locality; 

(4) Receipts amounting to $25,000 or less in any 

year from work done in another locality in which the 

contractor has no definite place of business; and 

(5) Receipts amounting to more than $25,000 in any 

year from work done in another locality in which the 

contractor has no definite place of business. 

The controversy between the City and English 

involves only receipts of the second class described 

above, but consideration must be given to all of them in 

order to determine the legislative intent and give the 

applicable statutes harmonious effect. 

 3

 By leave of this Court, briefs amici curiae were filed 

by the Local Government Attorneys of Virginia, the 

Commissioners of the Revenue Association of Virginia, the 

Treasurers Association of Virginia and the Virginia Municipal 

League, in support of the City, and by the Virginia Chamber of 

Commerce, in support of English. 

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Code § 58.1-3703(A) authorizes the governing bodies 

of counties, cities and towns to levy local license taxes 

on “businesses, trades, professions, occupations and 

callings and upon the persons, firms and corporations 

engaged therein within the county, city or town.” 

(Emphasis added.) Code § 58.1-3706 imposes limitations 

upon the tax rates that the localities may levy on the 

gross receipts of the various businesses subject to such 

license taxes. Code § 58.1-3703(A) provides that every 

local ordinance imposing license taxes must include the 

uniform provisions set forth in Code § 58.1-3703.1. The 

City’s local license tax ordinance contains those uniform 

provisions. 

The provisions of Code § 58.1-3703.1 applicable to the 

City’s appeal are: 

§ 58.1-3703.1. Uniform ordinance provisions. 

A. Every ordinance levying a license tax 

pursuant to this chapter shall include provisions 

substantially similar to this subsection. As they 

apply to license taxes, the provisions required by 

this section shall override any limitations or 

requirements in Chapter 39 (§ 58.1-3900 et seq.) of 

this title to the extent that they are in conflict. 

. . . . 

3. Situs of gross receipts. 

a. General rule. Whenever the tax imposed by 

this ordinance is measured by gross receipts, the 

gross receipts included in the taxable measure shall 

be only those gross receipts attributed to the 

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exercise of a privilege subject to licensure at a 

definite place of business within this jurisdiction. 

In the case of activities conducted outside of a 

definite place of business, such as during a visit 

to a customer location, the gross receipts shall be 

attributed to the definite place of business from 

which such activities are initiated, directed, or 

controlled. The situs of gross receipts for 

different classifications of business shall be 

attributed to one or more definite places of 

business or offices as follows: 

(1) The gross receipts of a contractor shall 

be attributed to the definite place of business at 

which his services are performed, or if his services 

are not performed at any definite place of business, 

then the definite place of business from which his 

services are directed or controlled, unless the 

contractor is subject to the provisions of § 58.1-

3715; . . . . 

Code § 58.1-3715(A) provides as follows: 

§ 58.1-3715. License requirements for contractors. 

A. When a contractor has paid any local 

license tax required by the county, city or town in 

which his principal office and any branch office or 

offices may be located, no further license or 

license tax shall be required by any other county, 

city or town for conducting any such business within 

the confines of this Commonwealth. However, when 

the amount of business done by any such contractor 

in any other county, city or town exceeds the sum of 

$25,000 in any year, such other county, city or town 

may require of such contractor a local license, and 

the amount of business done in such other county, 

city or town in which a license tax is paid may be 

deducted by the contractor from the gross revenue 

reported to the county, city or town in which the 

principal office or any branch office of the 

contractor is located. 

In harmonizing the foregoing sections, the circuit court 

necessarily considered the effect of the last clause of Code 

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§ 58.1-3703.1(A)(3)(a)(1): “unless the contractor is subject 

to the provisions of § 58.1-3715.” Citing our decision in 

Alger v. Commonwealth, 267 Va. 255, 259-60, 590 S.E.2d 563, 

565-66 (2004), the court applied the “last antecedent” rule of 

statutory construction, whereby “[r]eferential and qualifying 

words and phrases, where no contrary intention appears, refer 

solely to the last antecedent.” Id. The “last antecedent” is 

the immediately preceding word, phrase or clause “that can be 

made an antecedent without impairing the meaning of the 

sentence.” Id.

Applying that rule to the “unless” clause, the court held 

that it applied only to the clause immediately preceding it: 

“if his services are not performed at any definite place of 

business, then the definite place of business from which his 

services are directed or controlled.” Code § 58.1-

3703.1(A)(3)(a)(1). It follows from that holding that the 

“unless” clause has no effect upon the present case, because 

it is stipulated that all the gross receipts in issue were 

derived from English’s work done in localities in which it had 

a definite place of business, and Code § 58.1-3715 would apply 

only to receipts from localities in which the contractor had 

no definite place of business. For the reasons stated below, 

we agree with the circuit court’s reasoning. 

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The City argues on appeal that this was error, that the 

“unless” clause qualifies the entire subsection, that Code 

§ 58.1-3715 is a specific statute applicable to contractors 

that prevails over any general statutory rules, and that it 

makes no distinctions based upon the existence of a “definite 

place of business.” The City contends that Code § 58.1-3715 

permits the contractor only to deduct license taxes actually 

paid to other jurisdictions. The City further contends that 

English actually seeks an exemption from taxes on gross 

receipts derived from work done outside the City and points 

out that exemption provisions, like deduction provisions, are 

construed strictly against the taxpayer. 

 It is true that exemption and deduction provisions are 

strictly construed against the taxpayer, but those rules only 

apply when a local governing body has the clear statutory 

authority to impose a tax in the first place. In Commonwealth 

v. Carter, 198 Va. 141, 147, 92 S.E.2d 369, 373 (1956), we 

said that there was a “well-established principle that 

statutes imposing taxes are to be construed most strongly 

against the government and are not to be extended beyond the 

clear import of the language used . . . and the official who 

seeks to enforce a tax must be able to put his finger on the 

statute which confers such authority.” More recently, we 

said: “Taxing statutes must be construed strongly in the 

8
taxpayer’s favor, and will not be extended by implication 

beyond the clear import of the statutory language.” Shelor 

Motor Co. v. Miller, 261 Va. 473, 478, 544 S.E.2d 345, 348 

(2001). Our analysis is guided by those principles. 

 The statutes applicable to this appeal are contained in 

Chapter 37 (“License Taxes”) of Title 58.1 of the Code of 

Virginia (§§ 58.1-3700 through -3735). Code § 58.1-3702 

provides: “The provisions of this chapter shall be the sole 

authority for counties, cities and towns for the levying of 

the license taxes described herein” (emphasis added). As 

quoted above, the uniform ordinance provisions required by 

Code § 58.1-3703.1(A)(3) specify as a general rule that the 

gross receipts to be included in the taxable measure shall be 

only those attributable to “the exercise of a privilege 

subject to licensure at a definite place of business within 

[the City].” 

That section goes on to provide: 

The situs of gross receipts for different 

classifications of business shall be attributed to 

one or more definite places of business or offices 

as follows: 

(1) The gross receipts of a contractor shall 

be attributed to the definite place of business at 

which his services are performed. 

Code § 58.1-3703.1(A)(3)(a) (emphasis added). 

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Code § 58.1-3715, upon which the City relies, contains no 

language granting the City authority to levy a tax on gross 

receipts from services performed by a contractor in other 

localities in which he has a definite place of business. The 

City, however, seeks such authority by implication. Our 

holding in Shelor precludes that construction. 

It is the duty of the courts to construe statutory 

enactments so as to avoid repugnance and conflict between them 

and, if possible, to give force and effect to each of them. 

Sexton v. Cornett, 271 Va. 251, 257, 623 S.E.2d 898, 901 

(2006). Statutes should be construed as a whole, and the 

courts should adopt that interpretation that will carry out 

the legislative intent. Garrison v. First Federal Sav. & 

Loan, 241 Va. 335, 340, 402 S.E.2d 25, 28 (1991). No part of 

an act should be treated as meaningless unless absolutely 

necessary. Id. The City’s interpretation renders meaningless 

Code § 58.1-3703.1(A)(3)(a)(1) and ignores the clear 

legislative intent underlying the General Assembly’s 1996 

revision of the business license tax laws, of which that 

section is a part. That revision relies strongly on the 

importance of a “definite place of business” in determining 

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the taxable situs of gross receipts. See 1996 Acts chs. 715, 

720.4 

Application of the familiar principles of statutory 

construction cited above makes clear the propriety of the 

circuit court’s reasoning in applying the “last antecedent" 

rule when construing Code § 58.1-3703.1(A)(3)(a)(1). So 

construed, the applicable statutes operate in harmony and each 

is given effect. Thus, a locality may tax a contractor’s 

gross receipts from services performed in that locality if the 

contractor has a definite place of business there, and no 

other locality has authority to tax those receipts. If the 

contractor’s services are performed in a locality in which he 

has no definite place of business, gross receipts therefrom 

are attributed to the definite place of business from which 

the services were directed or controlled. If, however, the 

contractor received gross receipts in excess of $25,000 in any 

year from services performed in a locality in which he has no 

definite place of business, that locality may tax those 

receipts despite the lack of a definite place of business 

there, and the contractor may deduct those receipts from those 

 4

 The City presented the testimony of two Commissioners of 

the Revenue of other Virginia jurisdictions, both of whom 

testified that their practice was to tax the extraterritorial 

gross receipts of contractors whose principal office was 

located in their jurisdiction without any regard to whether 

11
reported to the locality from which the services were directed 

or controlled. 

Conclusion 

 Because the circuit court correctly construed and applied 

the applicable tax laws, we will affirm the judgments from 

which these appeals were taken. 

Affirmed.

 

the contractors had a definite place of business in the 

locality in which the work was done. 

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