Virginia Administrative Code › Title 23 - TAXATION › Agency 10 - DEPARTMENT OF TAXATION › Chapter 500 - BUSINESS, PROFESSIONAL AND OCCUPATIONAL LICENSE TAX REGULATIONS › Section 23VAC10-500-170 - Situs of gross receipts for a retailer

Current through Register Vol. 40, No. 24, July 15, 2024
The gross receipts of a retailer are attributed to the
				  definite place of business where sales solicitation activities occur. If sales
				  solicitation activities are not performed in any one locality, then they are
				  attributed to the definite place of business from which the sales solicitation
				  activities are initiated, directed or controlled. Unless a wholesaler is
				  subject to a license tax measured by purchases (23VAC10-500-180 ), its gross
				  receipts are also attributed to the definite place of business where sales
				  solicitation activities occur, or, if sales solicitation activities are not
				  performed in any one locality, then they are attributed to the definite place
				  of business from which the sales solicitation activities are initiated,
				  directed or controlled. For example:
1. A national retailer who sells clothing
				through a catalog has a sales office in County A where its sales staff receives
				telephone purchase orders and relays the orders to its warehouse is located in
				Pennsylvania. Retailer's sales office is a definite place of business since
				sales solicitations are directed there. Gross receipts are sourced to County
				A.
2. A national retailer's
				corporate headquarters are located in City B, Virginia. The retailer has stores
				throughout Virginia and the entire southeast. Each store maintains its own
				sales staff; however all accounting and operations management are performed at
				the corporate headquarters. Sales solicitation occurs at each store; therefore,
				the gross receipts from each store are sited to the localities in Virginia
				where each store is located.
3. A
				wholesaler, whose BPOL tax is based upon gross receipts, has a warehouse in
				County A. Solicitations for the sale of goods stored at the warehouse are made
				from City B. The situs of these gross receipts is City B.
4. A retailer sells goods over the Internet
				to customers who place their orders from home computers. The store, server, web
				page and customers are all in different localities in Virginia. The gross
				receipts of a retailer are attributed to the definite place of business where
				the sales solicitation activities occur. If sales solicitation activities are
				not performed in any one locality, then gross receipts are attributed to the
				definite place of business from which the sales solicitations are initiated,
				directed or controlled. The Internet page is not a definite place of business.
				Orders are filled at the retailer's store, and thus, under these facts, the
				sales solicitations are controlled at the store.
5. Corp. A maintains a "back-shop" processing
				office in County B, Virginia, where document specialists process requests for
				purchase proposals submitted to the office from sales representatives located
				throughout Virginia, including some in County B. An out-of-state office of
				Corp. A determines whether to submit a bid on the proposal, handles all aspects
				of the contract negotiation process, and has all authority to bind Corp. A by
				accepting proposals. The "back-shop" processing office in County B, Virginia
				has no authority to bind Corp. A and cannot accept any proposals. Gross
				receipts of a retailer, or a wholesaler that is taxed based upon gross
				receipts, are attributed to the definite place of business where sales
				solicitation occurs. If sales solicitation activities are not performed in any
				one locality, then they are attributed to the definite place of business from
				which the sales solicitation activities are initiated, directed or controlled.
				Sales solicitation relates to selling a particular product to a particular
				person. Generally, it does not include activities prior or subsequent to such
				activities. Whether sales solicitation takes place at one place or more is
				often a facts and circumstances test. In situations where multiple locations
				are involved, one such factor is which location had the authority to bind the
				seller in the transaction. In this example, the sales solicitation activity is
				under the full and sole control of Corp. A's out-of-state location; therefore,
				under these facts, gross receipts would not be attributed to County B,
				Virginia.
Statutory Authority
§ 58.1-3701 of the Code of
					 Virginia.