Virginia Administrative Code › Title 23 - TAXATION › Agency 10 - DEPARTMENT OF TAXATION › Chapter 500 - BUSINESS, PROFESSIONAL AND OCCUPATIONAL LICENSE TAX REGULATIONS › Section 23VAC10-500-200 - Situs of a business performing services

Current through Register Vol. 40, No. 24, July 15, 2024
The gross receipts from the performance of services are
				  attributed to the definite place of business where the services are performed,
				  or if not performed at any definite place, then they are attributed to the
				  definite place of business where the services are directed or controlled.
				  Examples:
1. A law firm has an office
				in City A where all management decisions are made. Attorneys travel to all
				surrounding city and county court houses to perform legal services. The proper
				situs would be City A since management decisions are made from this
				location.
2. A real estate
				management company is headquartered in County B. Properties managed by the
				company are located in other Virginia localities as well as other states. Each
				rental property has an onsite office where rental, repair and management
				decisions may be made. Since each definite place of business is at the onsite
				rental office, gross receipts would be sourced to the localities where the
				rental offices are located. Further, if a locality in which any onsite office
				is located does not assess a BPOL tax, the gross receipts from such office
				would not be attributed back to County B where the company's headquarters are
				located.
3. Same facts as in
				Example 2, except that there are no onsite management offices. All rental,
				repair and management decisions are directed and controlled at the company
				headquarters. Gross receipts will be sourced to County B since it is the
				definite place of business where the rental activity is directed and
				controlled.
4. An individual works
				as a marketing consultant. This individual travels constantly throughout
				various cities and counties in the Commonwealth. She has no office, but keeps a
				cellular phone and her business records in her car. Her home is located in
				County C. Consulting income will be sourced to County C. Although she runs her
				business out of her car, a person's residence is deemed to be a definite place
				of business if there is no definite place of business maintained elsewhere.
				(§ 58.1-3703.1 of the Code of Virginia.)
5. Company XYZ has one truck that operates
				out of City A in southwest Virginia. Company XYZ picks up and delivers wares,
				loads and other goods for customers to and from locations in and outside of
				Virginia. Company XYZ has a telephone, desk, files and operating log books at
				its office in City A and controls, directs and conducts business out of this
				location. It has no other locations outside of this office in City A. Company
				XYZ has one truck which operates out of City A, with maintenance on the truck
				being performed at this location. Company XYZ is a service provider. Gross
				receipts from business services are attributed to the definite place of
				business where services are performed, or if not performed at any definite
				place of business, then to the definite place of business from which the
				services are directed or controlled. (§ 58.1-3703.1A 3 a (4) of the Code
				of Virginia.) Here, services are performed across a broad geographic range.
				Since services are not performed at any definite place of business, gross
				receipts are attributed to Company XYZ's office in City A where the services
				are directed or controlled.
6. Acme
				Pest Co., a pest control and extermination business, has its principal offices
				in City C, Virginia. Most of Acme's customers are located in City C; however,
				Acme has some customers in localities that surround City C. Acme provides its
				service by making on-site visits and performing inspections and pest control
				spraying and eradication at its customers' residences or places of business.
				Acme has ongoing contracts with some of its customers under which it makes
				bi-annual visits to their residences or places of business. Other service
				visits are made on an intermittent, as-ordered basis. Acme leaves no equipment
				at its regular customers' locations, with the exception of the placement of an
				occasional mouse trap. Gross receipts from business services are attributed to
				the definite place of business where services are performed, or if not
				performed at any definite place of business, then to the definite place of
				business from which the services are directed or controlled. (§
				58.1-3703.1A 3 a (4) of the Code of Virginia.) A definite place of business
				means an office or location at which occurs a regular and continuous course of
				dealing. (§ 58.1-3700.1 of the Code of Virginia.) Service is performed by
				Acme at each location on a regular but noncontinuous basis. Acme does not
				maintain a permanent presence at its customers' locations. Thus, Acme does not
				have a definite place of business at those locations, and its gross receipts
				from each place where service is rendered are attributed to City C where Acme
				has its principal office.
7. ABC
				CPA's LLP, a CPA firm, has its principal offices in City C, Virginia. Although
				most of ABC's customers are located in City C, it has some customers in
				localities that surround City C. ABC provides some of its service by making
				onsite visits and performing inspections, audits, consulting, tax and business
				advice at its customers places of business. ABC also has engagements with some
				of its customers under which it makes bi-annual visits to their places of
				business. Other services are also performed at ABC's principal offices on an
				ongoing as well as an intermittent, as ordered, basis. ABC has no equipment at
				its regular customers' locations. Gross receipts from business services are
				attributed to the definite place of business where services are performed, or
				if not performed at any definite place of business, then to the definite place
				of business from which the services are directed or controlled. (§
				58.1-3703.1A 3 a (4) of the Code of Virginia.) A definite place of business
				means an office or location at which occurs a regular and continuous course of
				dealing. (§ 58.1-3700.1 of the Code of Virginia.) Where a professional
				service provider performs services at other locations away from an established
				or principal office where its phone and mailing address is located and does not
				maintain a continuous presence for more than 30 consecutive days at these other
				locations, the location of its definite place of business remains its
				established or principal office. In this example, service is performed by ABC
				at each customer location on a regular but noncontinuous basis. Thus, ABC does
				not have a definite place of business at those customer locations, and its
				gross receipts from each place where service is rendered are attributed to City
				C where ABC has its principal office.
8. Corp. A is a financial services
				corporation headquartered in Town B, Virginia. Corp. A maintains a loan
				servicing office in State C and a portfolio maintenance office in State D.
				Receipts attributable to loan servicing activities and portfolio maintenance
				are not taxable in Town B.
Statutory Authority
§ 58.1-3701 of the Code of
					 Virginia.