Section 120. Multiple locations

The classification of a business generally depends on the nature of the goods or services offered to the customers of the business for consideration. In the case of a business that conducts different activities at multiple locations, proper classification of the business may require consideration of its activities at locations in addition to the licensed location, i.e., the overall nature of the business. For example:

1. A complex product is manufactured in stages at different locations. It is undisputed that the overall process is manufacturing. However, final assembly and processing occur at a separate location and, viewed in isolation, the activities at this location may not cause sufficient transformation to be considered manufacturing. The location will be considered a "place of manufacture" for purposes of classifying the gross receipts or purchases as arising from sales at wholesale at the place of manufacture.

2. A contractor maintains a staff of architects and engineers and bids on "design-build" contracts. The bids are for a lump sum and do not segregate design costs from building costs. The entire gross receipts are subject to license tax as a contractor in the locality in which the building is constructed. The design activities are ancillary to the contracting activities and the contractor will not be required to obtain a professional license for the architects and engineers.

Historical Notes

Derived from Volume 24, Issue 23, eff. October 6, 2008.

Statutory Authority

§ 58.1-3701 of the Code of Virginia.