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

Are Virginia Local Govern…
September 20th, 2021
In a request for an opinion of the Attorney General of Virginia, local governments might have given a preview of what they will try to do in the upcoming 2022 session of the Virginia General Assembly. The Commissioner of the Revenue and the Treasurer…
Why is the Supreme Court…
August 25th, 2021
A 2017 opinion of the Supreme Court of Virginia needs to be addressed.
BPOL Tax and Internet Tax…
July 21st, 2021
Previously, opinions were entered by the Circuit Court of Fairfax County, the Circuit Court of Norfolk, and in the Circuit Court of Chesapeake that Internet Tax Freedom Act (“ITFA”) applies to the BPOL tax imposed in those localities. These opini…

Read More Blog Entries