Chapter 98 BUSINESS, PROFESSIONAL AND OCCUPATIONAL LICENSING.

Section 98-4 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 exercise of a privilege subject to licensure at a definite place of business within the Town of Front Royal.  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 Virginia Code Section 58.1-3715;

2. The gross receipts of a retailer or wholesaler shall be  attributed to the definite place of business at which sales  solicitation activities occur, or if sales solicitation  activities do not occur at any definite place of business,  then the definite place of business from which sales  solicitation activities are directed or controlled;  however, a wholesaler or distribution house subject to a license tax measured by purchases shall determine the situs of its purchases by the definite place of business at which  or from which deliveries of the purchased goods, wares and  merchandise are made to customers.  Any wholesaler who is subject to license tax in two or more localities and who is  subject to multiple taxation because the localities use different measures, may apply to the Virginia Department of Taxation for a determination as to the proper measure of purchases and gross receipts subject to license tax in each  locality;

(Ord. No. 13-96 Amended 12-16-96-Effective Upon Passage)

3. The gross receipts of a business renting tangible personal  property shall be attributed to the definite place of  business from which the tangible personal property is  rented or, if the property is not rented from any definite  place of business, then to the definite place of business at which the rental of such property is managed; and

4. The gross receipts from the performance of services shall be attributed to the definite place of business at which the 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.

B. Apportionment.  If the licensee has more than one definite place of business and it is impractical or impossible to determine to which definite place of business gross receipts should be attributed under the general rule; and the affected jurisdictions are unable to reach an apportionment agreement, and except as to circumstances set forth in Virginia Code Section 58.1-3709; the gross receipts of the business shall be apportioned between the definite places of businesses in the basis of payroll.  Gross receipts shall not be apportioned to a definite place of business unless some activities under the applicable general rule occurred at, or were controlled from, such definite place of business. Gross receipts attributable to a definite place of business in another jurisdiction shall not be attributed to this jurisdiction solely because the other jurisdiction does not impose a tax on the gross receipts attributable to the definite place of business in such other jurisdiction.

(Ord. No. 13-96 Amended 12-16-96-Effective Upon Passage)

C.  Agreements.  The assessor may enter into agreements with any other political subdivisions of Virginia concerning the manner in which gross receipts shall be apportioned among definite places of business.  However, the sum of the gross receipts apportioned by the agreement shall not exceed the total gross receipts attributable to all of the definite places of business affected by the agreement.  Upon being notified by a taxpayer  that its method of attributing gross receipts is fundamentally  inconsistent with the method of one or more political  subdivisions in which the taxpayer is licensed to engage in  business and that the difference has, or is likely to, result in taxes on more than 100 percent of its gross receipts from all locations in the affected jurisdictions, the assessor shall  make a good faith effort to reach an apportionment agreement with the other political subdivisions involved.

If an agreement cannot be reached, either the assessor or taxpayer may seek an advisory opinion from the Virginia Department of Taxation pursuant to Virginia Code Section 58.1-3701; notice of the request shall be given to the other party.  Notwithstanding the provisions of Virginia Code Section 58.1-3993, when a taxpayer  has demonstrated to a court that two or more political subdivisions of Virginia have assessed taxes on gross receipts  that may create a double assessment within the meaning of  Virginia Code Section 58.1-3986, the court shall enter such orders pending resolution of the litigation as may be necessary  to ensure that the taxpayer is not required to pay multiple  assessments even though it is not then known which  assessment is correct and which is erroneous.

(Ord. No. 9-85 Amended (former “Applicability”) 9-30-85-Effective 7-1-86)

(Ord. No. 2-96 Amended Entire Section 2-12-96-Effective Upon Passage)

(Ord. No. 13-96 Amended (C) by Adding 2^nd Paragraph 12-16-96-Effective Upon Passage)