§ 4-7.1-1. Definitions and requirements.  


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  • (a)

    General definitions. Except as otherwise provided by Subsection (b) of this Section, the words and phrases defined in this Section when used in this Article shall have the following meanings, unless a different meaning clearly is required by the context:

    Gross purchases mean all costs incurred for the acquisition of property of any nature or description acquired (i) for resale to retail merchants or (ii) for sale at wholesale to other wholesale merchants, institutional, commercial or industrial users. "Gross purchases" does not mean any costs incurred for the acquisition of property of any nature or description which, when sold by a wholesale merchant, is subject to taxation by the Virginia Retail Sales and Use Tax Act, Code of Virginia, Sections 58.1-600 through 58.1-639, as amended, or by any similar retail sales and use tax.

    Gross receipts mean the gross receipts from any business, profession, trade, occupation or calling, including cash, credits, fees, commissions, brokerage charges and rentals, and property of any kind, nature or description from either sales made or services rendered without any deduction therefrom on account of cost of the property sold, the cost of material, labor or services or other costs, interest or any expense whatsoever, and such term shall include in case of merchants the amount of the retail value of supplies and goods furnished to or used by the licensee or his family or other person for which no charge is made. Gross receipts include receipts from all sales and services rendered or conducted from a place of business within the County to persons in the County or to persons outside the County and all other receipts from all activities having a taxable situs within the County for local license taxation authorized by Virginia law. For the purposes of this definition, receipts from rendering sales and services to persons include all gross receipts from government agencies, as well as those entities described within the definition of "person" provided by this Section.

    Person means any individual, firm, partnership, corporation, company, association or joint stock association. Person includes any trustee, receiver, assignee or personal representative thereof carrying on or continuing a business, profession, trade, occupation or calling, but shall not include a court-appointed trustee, receiver or personal representative in the liquidation of assets for immediate distribution or a sergeant or sheriff, or any deputy, selling under authority of process or writ of a court of justice.

    (b)

    Special definitions, exclusions and provisions. The general definitions provided by this Article shall be subject to the following limitations, unless a different meaning clearly is required by the context:

    (1)

    Exclusions from the definition of gross receipts:

    (A)

    Gross receipts do not include those receipts excluded by Virginia law pursuant to Code of Virginia, Section 58.1-3703(B).

    (B)

    Gross receipts do not include revenues that are attributable to taxable business activity conducted in another jurisdiction within the Commonwealth of Virginia and the volume attributable to that business activity is deductible pursuant to Code of Virginia, Sections 58.1-3707, 58.1-3708 and 58.1-3709.

    (C)

    Gross receipts do not include revenues that are attributable to business activity with a taxable situs in another jurisdiction not within the Commonwealth of Virginia. Taxable situs in another jurisdiction not within the Commonwealth of Virginia may be shown by evidence that such business activity is subject, in other states of the United States or in other countries, to forms of taxation which include, but are not limited to:(i) a net income tax; (ii) a franchise tax measured by net income; (iii) a franchise tax for the privilege of doing business; or (iv) a license tax based on gross receipts. In the case of a person claiming an exclusion for gross receipts derived from business activities in any foreign jurisdiction pursuant to this Subsection, only the volume attributable to those business activities with a taxable situs in other jurisdictions may be excluded. In the event that the gross receipts from foreign business activities cannot be determined, then the gross receipts shall be apportioned in accordance with formulas authorized by Code of Virginia, Section 58.1-406, mutatis mutandis. In claiming an exclusion pursuant to this Subsection, a person may propose an alternative method of allocation and apportionment. The Supervisor of Assessments may apply such an alternative in accordance with Code of Virginia, Section 58.1-421, mutatis mutandis.

    (D)

    Gross receipts do not include those receipts which are subject to a license tax on the same business activity imposed by a town government in accordance with Code of Virginia, Section 58.1-3711.

    (E)

    Gross receipts do not include any amounts paid for certain taxes set forth in Code of Virginia, Section 58.1-3732 or any amounts paid for computer hardware and software purchased for resale to the federal or state government in accordance with the provisions of Code of Virginia, Section 58.1-3732.

    (F)

    Gross receipts do not include licenses, admission taxes or pari-mutual wagering pools established under Code of Virginia, Section 59.1-392 or 59.1-393 in accordance with the provisions of Code of Virginia, Section 58.1-3732.1.

    (G)

    Gross receipts do not include any amounts received by a real estate broker which arise from real estate sales transactions to the extent that such amounts are paid to a real estate agent as a commission and the agent is subject to a business license tax on such gross receipts in accordance with the provisions of Code of Virginia, Section 58.1-3732.2. In addition, gross receipts, when used in connection with Section 4-7.1-34 of this Article, means all commissions received by real estate brokers with respect to the purchase, sale or purchase and sale of any real estate and the management fees paid by real estate agents to real estate brokers as established in accord with a contractual agreement between the broker and the agents of that broker. After December 31, 1995, gross receipts, when used in connection with Section 4-7.1-34 of this Article, do not include management fees paid by real estate agents to real estate brokers as established in accord with a contractual agreement between the broker and the agents of that broker. Such receipts are taxable in accordance with Section 4-7.1-23 of this Article.

    (H)

    Gross receipts do not include the value of any trade-in vehicle accepted in trade by a motor vehicle dealer who accepts a trade-in as part of a sale of a motor vehicle pursuant to Code of Virginia, Section § 58.1-3734.1.

    (I)

    Gross receipts do not include all amounts received in the course of conducting the state lottery by a lottery sales agent licensed by the State Lottery Board, but gross receipts do include the compensation actually paid to a lottery sales agent in accordance with the provisions of Code of Virginia, Section 58.1-4011.

    (J)

    Gross receipts do not include dues collected by trade, business, professional, service or civic associations, or other similar organizations.

    (K)

    Gross receipts do not include amounts paid by advertising agents and agencies for any customer for advertising space, radio time, television time, electrical transcription, pressing, art work, engraving, plate, mats, printing stock and postage.

    (L)

    Gross receipts do not include income which is exempt from the federal income tax pursuant to Internal Revenue Code Section 501(c)(6), as amended. However, this exclusion pertaining to organizations which are exempt from the federal income tax pursuant to Internal Revenue Code Section 501(c)(6) does not exempt unrelated business income received by those organizations which is taxable pursuant to Internal Revenue Code 501(b), as amended.

    (M)

    Gross receipts, when used in connection with or in respect to financial transactions involving the sale of notes, stocks, bonds or other securities or the loan, collection or advance of money or the discounting of notes, bills or other evidence of debt, mean the gross interest, gross discount, gross commission or other gross receipts earned by means of, or resulting from such financial transactions, but gross receipts do not include any amount received as payment of debt.

    (N)

    Gross receipts do not include the pass-through funds of any money lender duly organized, registered and doing business as a cooperative association under the Virginia Cooperative Association Act or any corresponding cooperative association act of any other state or the District of Columbia. However, all funds used for operating expenses, retained margins and reserves of any such cooperative association are gross receipts which are taxable in accordance with Section 4-7.1-31 of this Article. Any cooperative money lender whose gross receipts are subject to taxation in accordance with this subparagraph shall submit such documentary proof as required by the Supervisor of Assessments that the cooperative money lender is duly organized, registered and doing business as a cooperative association in the manner provided herein.

    (O)

    Gross receipts do not include gifts made without consideration to a person.

    (P)

    Gross receipts do not include any amounts received from the sale of capital assets or from dividends, interest or the investment income except in the case of a person engaged in a money lending or other financial services business the receipts of which are directly attributable to the exercise of the licensed privilege.

    (Q)

    Gross receipts do not include general and administrative intra-company receipts or intra-company reimbursements or transfer payments.

    (2)

    Exclusions from the definition of person:

    (A)

    Person does not include:(i) volunteer fire departments; (ii) volunteer rescue squads; or (iii) nonprofit charitable, cultural, educational or recreational organizations which are created to operate a community center, a swimming pool, a tennis court or some other facility or service for the exclusive benefit of the residents of Fairfax County.

    (3)

    Other special provisions:

    (A)

    Notwithstanding the provisions of Section 4-7-17, every person conducting or engaging in the occupation, business, trade or calling of leasing aircraft shall be taxed on the gross receipts of that activity at the annual license tax rate imposed on wholesale merchants by Section 4-7.1-30.

    (c)

    The calculation of gross purchases and gross receipts for annual license tax purposes shall be on a cash, a modified accrual or an accrual basis used for the preceding calendar year, but the basis used for such calculation of gross receipts for each person shall be the same system of accounts used by that person for federal income tax purposes.

    (d)

    Any person claiming the benefit of any exclusion, exemption, restriction or limitation to the taxes imposed by this Article shall bear the burden of showing that the exclusion, exemption, restriction or limitation is applicable to their claim. (33-94-4.)