State and Local Taxation

Virginia Local Government Wants to Tax PPP Loan Proceeds

Virginia Local Government…

In my last blog, I highlighted the fact that the City of Richmond has a tax revenue shortfall. Now thanks to an advisory opinion request, a Virginia local government has shown how far it is willing to go for tax revenue. A Virginia local government (only described as a “City”) requested an advisory opinion from the state Tax Commissioner about whether loan proceeds from the Payroll Protection Program are considered gross receipts for purposes of the business, professional, occupational, and license tax (“BPOL Tax”). Thankfully, the state Tax Commissioner said that these loan proceeds are not gross receipts. It is now soapbox time. How could any Virginia local government think of taxing loan proceeds meant to help businesses continue to exist during a pandemic? Frankly, the locality should be embarrassed. While we do not know which locality is so depraved to think of taxing these loan proceeds, it simply highlights that legal counsel is necessary to have in an audit with a potentially overly aggressive auditor.

Christian Tennant is a Virginia tax attorney and former employee of the Virginia Department of Taxation. Mr. Tennant regularly speaks and writes on Virginia taxation. In his private practice he advises and represents businesses and individuals on a range of tax matters.

Contact Us

  • This field is for validation purposes and should be left unchanged.

Tax Law Blog

2022 Virginia Legislation…
May 2nd, 2022
Even though the Virginia General Assembly is not done considering tax issues for the year, a number of bills have been enacted that make changes to the Code of Virginia in areas concerning taxes. A summary of the legislation can be found here. Most o…
2022 Virginia Tax Legisla…
March 18th, 2022
In January, I wrote about various pieces of tax legislation that were introduced in the 2022 session of the Virginia General Assembly. Now the session has adjourned and will be reconvened to handle the budget for the upcoming biennium as well as nume…
What is “use” for cor…
February 14th, 2022
The Supreme Court of Virginia issued an opinion in Virginia Department of Taxation v. R.J. Reynolds Tobacco Co., Record No. 201263 (February 10, 2022). This case concerned what is considered property for corporate income tax apportionment purposes. C…

Read More Blog Entries