§ 58.1-3732. Exclusions and deductions from "gross receipts.".
A. Gross receipts for license tax purposes shall not include any amount notderived from the exercise of the licensed privilege to engage in a businessor profession in the ordinary course of business.
The following items are excluded:
1. Amounts received and paid to the United States, the Commonwealth or anycounty, city or town for the Virginia retail sales or use tax, for any localsales tax or any local excise tax on cigarettes, or amounts received for anyfederal or state excise taxes on motor fuels.
2. Any amount representing the liquidation of a debt or conversion of anotherasset to the extent that the amount is attributable to a transactionpreviously taxed (e.g., the factoring of accounts receivable created by saleswhich have been included in taxable receipts even though the creation of suchdebt and factoring are a regular part of its business).
3. Any amount representing returns and allowances granted by the business toits customers.
4. Receipts which are the proceeds of a loan transaction in which thelicensee is the obligor.
5. Receipts representing the return of principal of a loan transaction inwhich the licensee is the creditor, or the return of principal or basis uponthe sale of a capital asset.
6. Rebates and discounts taken or received on account of purchases by thelicensee. A rebate or other incentive offered to induce the recipient topurchase certain goods or services from a person other than the offeror, andwhich the recipient assigns to the licensee in consideration of the salegoods and services shall not be considered a rebate or discount to thelicensee, but shall be included in the licensee's gross receipts togetherwith any handling or other fees related to the incentive.
7. Withdrawals from inventory for purposes other than sale or distributionand for which no consideration is received and the occasional sale orexchange of assets other than inventory whether or not a gain or loss isrecognized for federal income tax purposes.
8. Investment income not directly related to the privilege exercised by abusiness subject to licensure not classified as rendering financial services.This exclusion shall apply to interest on bank accounts of the business, andto interest, dividends and other income derived from the investment of itsown funds in securities and other types of investments unrelated to thelicensed privilege. This exclusion shall not apply to interest, late fees andsimilar income attributable to an installment sale or other transaction thatoccurred in the regular course of business.
B. The following shall be deducted from gross receipts or gross purchasesthat would otherwise be taxable:
1. Any amount paid for computer hardware and software that are sold to aUnited States federal or state government entity provided that such propertywas purchased within two years of the sale to said entity by the originalpurchaser who shall have been contractually obligated at the time of purchaseto resell such property to a state or federal government entity. Thisdeduction shall not occur until the time of resale and shall apply to onlythe original cost of the property and not to its resale price, and thededuction shall not apply to any of the tangible personal property which wasthe subject of the original resale contract if it is not resold to a state orfederal government entity in accordance with the original contract obligation.
2. Any receipts attributable to business conducted in another state orforeign country in which the taxpayer (or its shareholders, partners ormembers in lieu of the taxpayer) is liable for an income or other tax basedupon income.
(Code 1950, § 58-266.1; 1950, p. 155; 1956, c. 242; 1964, c. 424; 1968, c.619; 1970, cc. 231, 547; 1974, cc. 196, 438; 1975, cc. 23, 621; 1976, cc.521, 719; 1977, c. 320; 1978, cc. 772, 799, 817; 1979, cc. 565, 568, 570;1980, cc. 318, 736; 1981, cc. 419, 636; 1982, cc. 348, 548, 552, 554, 558,633; 1983, c. 554; 1984, cc. 247, 675, 695; 1992, c. 632; 1996, cc. 715, 720;2002, c. 346; 2007, cc. 85, 834.)
§ 58.1-3732. Exclusions and deductions from "gross receipts.".
A. Gross receipts for license tax purposes shall not include any amount notderived from the exercise of the licensed privilege to engage in a businessor profession in the ordinary course of business.
The following items are excluded:
1. Amounts received and paid to the United States, the Commonwealth or anycounty, city or town for the Virginia retail sales or use tax, for any localsales tax or any local excise tax on cigarettes, or amounts received for anyfederal or state excise taxes on motor fuels.
2. Any amount representing the liquidation of a debt or conversion of anotherasset to the extent that the amount is attributable to a transactionpreviously taxed (e.g., the factoring of accounts receivable created by saleswhich have been included in taxable receipts even though the creation of suchdebt and factoring are a regular part of its business).
3. Any amount representing returns and allowances granted by the business toits customers.
4. Receipts which are the proceeds of a loan transaction in which thelicensee is the obligor.
5. Receipts representing the return of principal of a loan transaction inwhich the licensee is the creditor, or the return of principal or basis uponthe sale of a capital asset.
6. Rebates and discounts taken or received on account of purchases by thelicensee. A rebate or other incentive offered to induce the recipient topurchase certain goods or services from a person other than the offeror, andwhich the recipient assigns to the licensee in consideration of the salegoods and services shall not be considered a rebate or discount to thelicensee, but shall be included in the licensee's gross receipts togetherwith any handling or other fees related to the incentive.
7. Withdrawals from inventory for purposes other than sale or distributionand for which no consideration is received and the occasional sale orexchange of assets other than inventory whether or not a gain or loss isrecognized for federal income tax purposes.
8. Investment income not directly related to the privilege exercised by abusiness subject to licensure not classified as rendering financial services.This exclusion shall apply to interest on bank accounts of the business, andto interest, dividends and other income derived from the investment of itsown funds in securities and other types of investments unrelated to thelicensed privilege. This exclusion shall not apply to interest, late fees andsimilar income attributable to an installment sale or other transaction thatoccurred in the regular course of business.
B. The following shall be deducted from gross receipts or gross purchasesthat would otherwise be taxable:
1. Any amount paid for computer hardware and software that are sold to aUnited States federal or state government entity provided that such propertywas purchased within two years of the sale to said entity by the originalpurchaser who shall have been contractually obligated at the time of purchaseto resell such property to a state or federal government entity. Thisdeduction shall not occur until the time of resale and shall apply to onlythe original cost of the property and not to its resale price, and thededuction shall not apply to any of the tangible personal property which wasthe subject of the original resale contract if it is not resold to a state orfederal government entity in accordance with the original contract obligation.
2. Any receipts attributable to business conducted in another state orforeign country in which the taxpayer (or its shareholders, partners ormembers in lieu of the taxpayer) is liable for an income or other tax basedupon income.
(Code 1950, § 58-266.1; 1950, p. 155; 1956, c. 242; 1964, c. 424; 1968, c.619; 1970, cc. 231, 547; 1974, cc. 196, 438; 1975, cc. 23, 621; 1976, cc.521, 719; 1977, c. 320; 1978, cc. 772, 799, 817; 1979, cc. 565, 568, 570;1980, cc. 318, 736; 1981, cc. 419, 636; 1982, cc. 348, 548, 552, 554, 558,633; 1983, c. 554; 1984, cc. 247, 675, 695; 1992, c. 632; 1996, cc. 715, 720;2002, c. 346; 2007, cc. 85, 834.)
§ 58.1-3732. Exclusions and deductions from "gross receipts.".
A. Gross receipts for license tax purposes shall not include any amount notderived from the exercise of the licensed privilege to engage in a businessor profession in the ordinary course of business.
The following items are excluded:
1. Amounts received and paid to the United States, the Commonwealth or anycounty, city or town for the Virginia retail sales or use tax, for any localsales tax or any local excise tax on cigarettes, or amounts received for anyfederal or state excise taxes on motor fuels.
2. Any amount representing the liquidation of a debt or conversion of anotherasset to the extent that the amount is attributable to a transactionpreviously taxed (e.g., the factoring of accounts receivable created by saleswhich have been included in taxable receipts even though the creation of suchdebt and factoring are a regular part of its business).
3. Any amount representing returns and allowances granted by the business toits customers.
4. Receipts which are the proceeds of a loan transaction in which thelicensee is the obligor.
5. Receipts representing the return of principal of a loan transaction inwhich the licensee is the creditor, or the return of principal or basis uponthe sale of a capital asset.
6. Rebates and discounts taken or received on account of purchases by thelicensee. A rebate or other incentive offered to induce the recipient topurchase certain goods or services from a person other than the offeror, andwhich the recipient assigns to the licensee in consideration of the salegoods and services shall not be considered a rebate or discount to thelicensee, but shall be included in the licensee's gross receipts togetherwith any handling or other fees related to the incentive.
7. Withdrawals from inventory for purposes other than sale or distributionand for which no consideration is received and the occasional sale orexchange of assets other than inventory whether or not a gain or loss isrecognized for federal income tax purposes.
8. Investment income not directly related to the privilege exercised by abusiness subject to licensure not classified as rendering financial services.This exclusion shall apply to interest on bank accounts of the business, andto interest, dividends and other income derived from the investment of itsown funds in securities and other types of investments unrelated to thelicensed privilege. This exclusion shall not apply to interest, late fees andsimilar income attributable to an installment sale or other transaction thatoccurred in the regular course of business.
B. The following shall be deducted from gross receipts or gross purchasesthat would otherwise be taxable:
1. Any amount paid for computer hardware and software that are sold to aUnited States federal or state government entity provided that such propertywas purchased within two years of the sale to said entity by the originalpurchaser who shall have been contractually obligated at the time of purchaseto resell such property to a state or federal government entity. Thisdeduction shall not occur until the time of resale and shall apply to onlythe original cost of the property and not to its resale price, and thededuction shall not apply to any of the tangible personal property which wasthe subject of the original resale contract if it is not resold to a state orfederal government entity in accordance with the original contract obligation.
2. Any receipts attributable to business conducted in another state orforeign country in which the taxpayer (or its shareholders, partners ormembers in lieu of the taxpayer) is liable for an income or other tax basedupon income.
(Code 1950, § 58-266.1; 1950, p. 155; 1956, c. 242; 1964, c. 424; 1968, c.619; 1970, cc. 231, 547; 1974, cc. 196, 438; 1975, cc. 23, 621; 1976, cc.521, 719; 1977, c. 320; 1978, cc. 772, 799, 817; 1979, cc. 565, 568, 570;1980, cc. 318, 736; 1981, cc. 419, 636; 1982, cc. 348, 548, 552, 554, 558,633; 1983, c. 554; 1984, cc. 247, 675, 695; 1992, c. 632; 1996, cc. 715, 720;2002, c. 346; 2007, cc. 85, 834.)
