Present: All the Justices
COMMONWEALTH OF VIRGINIA,
DEPARTMENT OF TAXATION
OPINION BY
v. Record No. 970938 CHIEF JUSTICE HARRY L. CARRICO
February 27, 1998
BLANKS OIL CO., INC.
FROM THE CIRCUIT COURT OF CAMPBELL COUNTY
J. Samuel Johnston, Jr., Judge
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 County, * 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
*
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.
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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
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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.
he 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
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“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
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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 United
States.”
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).
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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
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purpose of crediting the accounts of the localities levying
the local sales tax.
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.
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