VIRGINIA, DEPARTMENT OF TAXATION
BLANKS OIL CO., INC.
February 27, 1998
Record No. 970938
COMMONWEALTH OF VIRGINIA,
DEPARTMENT OF TAXATION
BLANKS OIL CO., INC.
OPINION BY CHIEF JUSTICE HARRY L. CARRICO
FROM THE CIRCUIT COURT OF CAMPBELL COUNTY
J. Samuel Johnston, Jr., Judge
Present: All the Justices
The question for decision in this sales tax case is whether
the situs for the assessment of a local tax on sales of home
heating fuel is the place of delivery or the place of the
dealer’s business. The trial court ruled that the place of
delivery was the proper situs for such assessment. Finding this
ruling erroneous, we will reverse.
The levy of a local one percent general retail sales tax by
cities and counties is authorized by Code ? 58.l-605(B).
Such tax is administered and collected by the State Tax
Commissioner in the same manner as the state sales tax. Code
? 58.1-605(D). The local taxes so collected are paid into a
special fund of the state treasury and credited to the account of
each particular city or county levying a local sales tax. Code
? 58.1-605(E). The local sales tax applies to home heating
fuel unless exempted by a duly adopted ordinance of a local
governing body. Code ? 58.1-609.13.
In a motion for judgment filed against the Commonwealth of
Virginia Department of Taxation (the Department), Blanks Oil Co.,
Inc. (Blanks), whose place of business is located in Campbell
sought the correction of an allegedly erroneous assessment of a
one percent local sales tax on home heating fuel that Blanks
delivered to its customers in the counties of Pittsylvania and
Bedford. Pittsylvania and Bedford exempt the sale of such fuel
from the local sales tax; Campbell does not.
The trial court held that because the proper situs of the
assessment of the local tax on sales of home heating fuel was the
place of delivery and because such sales were exempt from the tax
in the counties of Pittsylvania and Bedford, where the deliveries
in question were made, the assessment against Blanks was
erroneous. Accordingly, the court ordered that the Department
refund to Blanks $2,536.40 for local sales taxes assessed in 1992
on deliveries Blanks made in such counties. We awarded the
Department this appeal.
Well-established rules govern the disposition of the question
presented by this appeal. "Any assessment of a tax by the
Department shall be deemed prima facie correct." Code
? 58.1-205(1). The burden is upon the taxpayer challenging
an assessment to show that the assessment is erroneous or
otherwise improper. Code ? 58.1-1825; Department of
Taxation v. Lucky Stores, Inc., 217 Va. 121, 127, 225 S.E.2d
870, 874 (1976); Union Tanning Co. v. Commonwealth, 123
Va. 610, 632-33, 96 S.E. 780, 786-87 (1918). The State Tax
Commissioner is empowered to issue regulations relating to the
interpretation and enforcement of the laws governing taxes
administered by the Department. Code ? 58.1-203. And the
Commissioner’s construction of a tax statute, while not binding
upon this Court, is entitled to great weight. Department of
Taxation v. Wellmore Coal Corp., 228 Va. 149, 154, 320 S.E.2d
509, 511 (1984); Webster v. Department of Taxation, 219
Va. 81, 84-85, 245 S.E.2d 252, 255 (1978).
In its final order, the trial court stated that City of
Richmond v. Petroleum Marketers, Inc., 221 Va. 372, 269
S.E.2d 389 (1980), supported the court’s ruling that Blanks’
assessment was erroneous. Blanks cites Petroleum Marketers
on appeal, but we find that the case is inapposite.
Petroleum Marketers did not involve a sales tax, and
Code ? 58.1-605, at issue here, was not implicated in any
way. That case determined whether a fuel oil dealer was engaged
in the business of a wholesale merchant in the City of Richmond
within the meaning of a provision of the City Code which imposed
a wholesale license tax upon such merchants.
The merchant in question maintained its place of business in
Henrico County, where all its customer contracts were made, but
delivered fuel oil to customers in the adjoining City of
Richmond. The section of the City Code imposing the wholesale
merchants license tax was silent on the issue of place of sale. Id.
at 373 n*, 269 S.E.2d at 390 n*. Accordingly, we looked to the
Uniform Commercial Code (UCC) for a definition of the terms
"sale" and "place of sale" as well as for
assistance in determining whether "there [was] a sufficient
nexus between the activities of Petroleum [Marketers] and the
City to justify the City classifying Petroleum [Marketers] as a
wholesale merchant subject to the City’s license tax." Id.
at 374, 269 S.E.2d at 390.
iting several provisions of the UCC, we held that "title
[to the fuel oil] passed when the product was pumped out of [the
merchant's] tanks and into whatever facility [in the City of
Richmond] its customer provided." Id. Accordingly, we
concluded that the merchant had made "wholesale sales within
the City of Richmond . . . and . . . was
a wholesale merchant within that jurisdiction for purposes of
[the wholesale merchants license tax]." Id. at 375,
269 S.E.2d at 390.
Here, unlike the Richmond City Code, the statute authorizing
the local sales tax in question is not silent on the issue of
place of sale. The statute fixes the place of business of the
dealer as the place of sale. Code ? 58.1-605(E) provides
that the basis of the credit to the cities and counties levying a
local sales tax "shall be the city or county in which the
sales were made . . ., namely, the city or county of
location of each place of business of every dealer paying the tax
to the Commonwealth without regard to the city or county of
possible use by the purchasers." (Emphasis added.)
Furthermore, consistent with the provisions of Code
? 58.1-605, a long-standing regulation promulgated by the
Department also fixes the place of business of the dealer as the
place of sale. Published in 23 Va. Admin. Code 10-210-630(E)(1),
the regulation provides as follows:
The local 1% sales tax will be allocated to the locality
in which the place of business from which the sale is made is
located. Place of business is defined as an established
business location at which orders are regularly received.
Therefore the situs of sale shall be the business location
that first takes the purchaser’s order, either in person, by
purchase order, or by letter or telephone, regardless of the
location of the merchandise or the point of acceptance of the
order or shipment.
Blanks maintains, however, that this regulation is
inconsistent with Code ? 8.2-401(2), a part of the Uniform
Commercial Code, and, therefore, violative of Code
? 58.1-203(A), which provides that the Department’s
regulations "shall not be inconsistent with the
Constitutions and applicable laws of this Commonwealth and of the
Code ? 8.2-401(2) provides that "title passes to
the buyer at the time and place at which the seller completes his
performance with reference to the physical delivery of the
goods." Here, Blanks argues, it completed its performance
and title passed when the home heating oil was delivered and
metered and invoices were rendered to its customers in
Pittsylvania and Bedford counties. Blanks asserts that we are
"bound by the UCC" and must recognize the place of
delivery as the place of sale in this case.
Blanks acknowledges that the General Assembly may override a
provision of the UCC by the enactment of other legislation. But,
Blanks says, the General Assembly’s enactment of the legislation
authorizing the assessment of a local sales tax did not override
the UCC’s ? 8.2-401(2).
We disagree with Blanks. Code ? 8.2-401(2) is a statute
of general application while Code ?? 58.1-605 and -609.13
are statutes of specific application. Code ? 8.2-401(2)
speaks to innumerable types of sales generally; Code
? 58.1-605 deals with the specific subject of local sales
taxes and Code ? 58.1-609.13 with the sale of a specific
commodity, viz., home heating fuel.
"[W]hen one statute speaks to a subject in a general way
and another deals with a part of the same subject in a more
specific manner . . . and . . . they
conflict, the latter prevails." Virginia Nat’l Bank v.
Harris, 220 Va. 336, 340, 257 S.E.2d 867, 870 (1979); see
also County of Fairfax v. Century Concrete Services,
Inc., 254 Va. 423, 427, 492 S.E.2d 648, 650 (1997); Dodson
v. Potomac Mack Sales & Service, Inc., 241 Va. 89, 94-95,
400 S.E.2d 178, 181 (1991). Hence, we conclude that the enactment
of Code ?? 58.1-605 and -609.13 did override Code
? 8.2-401(2) to the extent that the former sections fix the
place of sale of home heating fuel for the purpose of assessing
the local sales tax.
Blanks contends, however, that Code ? 58.1-605 is merely
"an administrative statute." Blanks argues that the
Code section serves only to enable the Commissioner to make the
ministerial determination of a place of sale for the purpose of
crediting the accounts of the localities levying the local sales
Again, we disagree with Blanks. In our opinion, Code
? 58.1-605 is a substantive measure, and it displays the
clear legislative intent to make the city or county of the
dealer’s place of business the situs for the assessment of the
local sales tax as well as the basis for the Commissioner to
credit the accounts of the localities levying the tax.
Accordingly, we will reverse the judgment of the trial court
and enter final judgment here in favor of the Commissioner.
Reversed and final judgment.
It is undisputed that Blanks’ place of business in Campbell
County is where orders for home heating oil are placed and
processed and where accounting functions are performed.