Virginia Law

Article 2. License Tax on Telegraph, Telephone, Water, Heat, Light, Power and Pipeline Companies.

The license tax levied pursuant to this article shall be paid annually for each tax year based upon the gross receipts received during the taxable year.

Code 1950, § 58-503.2; 1979, c. 153; 1984, c. 675.

Repealed by 1988, c. 899, effective for tax years 1990 and after.

A. Every corporation doing in the Commonwealth the business of furnishing water, heat, light or power, whether by means of gas or steam, except (i) a pipeline transmission company taxed pursuant to § 58.1-2627.1, (ii) a pipeline distribution company as defined in § 58.1-2600 and a gas utility and a gas supplier as defined in § 58.1-400.2, or (iii) an electric supplier as defined in § 58.1-400.2, shall, for the privilege of doing business within the Commonwealth, pay to the Commonwealth for each tax year an annual license tax equal to two percent of its gross receipts, actually received, from all sources.

B. The state license tax provided in subsection A shall be (i) in lieu of all other state license or franchise taxes on such corporation, and (ii) in lieu of any tax upon the shares of stock issued by it.

C. Nothing herein contained shall exempt such corporation from motor vehicle license taxes, motor vehicle fuel taxes, fees required by § 13.1-775.1 or from assessments for street and other local improvements, which shall be authorized by law, nor from the county, city, town, district or road levies.

D. Nothing herein contained shall annul or interfere with any contract or agreement by ordinance between such corporations and cities and towns as to compensation for the use of the streets or alleys by such corporations.

Code 1950, § 58-603; 1971, Ex. Sess., c. 41; 1972, c. 858; 1976, c. 778; 1978, c. 786; 1980, c. 668; 1982, c. 633; 1984, c. 675; 1985, c. 31; 1987, cc. 320, 364; 1999, c. 971; 2000, cc. 691, 706.

A. For the tax years beginning on and after January 1, 1988, but before January 1, 2022, every corporation in the Commonwealth doing the business of furnishing water, heat, light, or power to the Commonwealth or its citizens, whether by means of electricity, gas, or steam shall be allowed a credit against the tax imposed by § 58.1-2626 in the following amount: $1 per ton for each ton of coal purchased and consumed by such corporation in excess of the number of tons of Virginia coal purchased by such corporation in 1985, provided such coal was mined in Virginia as certified by the producer of such coal. This credit shall be prorated equally against the corporation's estimated payments made in September and December and the final payment.

B. For tax years beginning on and after January 1, 1989, but before January 1, 2022, every corporation in the Commonwealth doing the business of furnishing water, heat, light, or power to the Commonwealth or its citizens, whether by means of electricity, gas, or steam shall be allowed additional credit against the tax imposed by § 58.1-2626 in the following amount: $1 per ton for each ton of coal purchased and consumed by such corporation, provided such coal was mined in Virginia as certified by such seller. The credit shall be prorated equally against the corporation's estimated payments made in September and December and the final payment.

1986, c. 450; 1989, c. 429; 2000, c. 929; 2021, Sp. Sess. I, cc. 553, 554.

There shall be deducted from the gross receipts of any corporation engaged in the business of furnishing heat, light or power by means of gas, revenues billed on behalf of another person to the extent such revenues are later paid over to or settled with that person.

Code 1950, § 58-603; 1971, Ex. Sess., c. 41; 1972, c. 858; 1976, c. 778; 1978, c. 786; 1980, c. 668; 1982, c. 633; 1984, c. 675; 1986, c. 243; 1993, c. 522; 1998, c. 197; 1999, c. 971.

A. Every pipeline transmission company shall pay to the Department on its allocated and apportioned net taxable income, in lieu of a license tax, the tax levied pursuant to Chapter 3 (§ 58.1-300 et seq.) (State Income Tax) of this title. There shall be deducted from such allocated and apportioned net income an amount equal to the percentage that gross profit (operating revenues less cost of purchased gas) derived from sales in this Commonwealth for consumption by the purchaser of natural or manufactured gas is of the total gross profit in the Commonwealth of the taxpayer.

B. The annual report of such company required pursuant to § 58.1-2628 shall be made to the Department, on forms prepared and furnished by the Department, if the company is a pipeline transmission company or to the Commission if a pipeline distribution company. The Department shall assess the value of the property of each pipeline transmission company and the Commission shall assess the value of the property of each pipeline distribution company. The applicable county, city, town and magisterial district property levies shall attach thereto. The powers and duties granted to the Commission by §§ 58.1-2633 B and C and 58.1-2634 shall apply mutatis mutandis to the Department.

C. A company liable for the license tax under subsection A shall not be liable for the tax imposed by Chapter 28 (§ 58.1-2814 et seq.) of this title.

D. When a company qualifies as both a pipeline transmission company and a pipeline distribution company, it shall for property tax valuation purposes be considered a pipeline distribution company.

Code 1950, §§ 58-588, 58-590, 58-597; 1956, c. 69; 1964, c. 217; 1968, c. 637; 1971, Ex. Sess., c. 1; 1972, c. 813; 1980, cc. 82, 371; 1983, c. 570; 1984, c. 675; 2000, cc. 691, 706.

A. Each telegraph company and telephone company shall report annually, on April 15, to the Commission all real and tangible personal property of every description in the Commonwealth, owned, operated or used by it, except leased automobiles, leased trucks or leased real estate, as of January 1 preceding, showing particularly the county, city, town or magisterial district wherein such property is located.

The report shall also show the total gross receipts for the 12 months ending December 31 next preceding and the interstate revenue, if any, attributable to the Commonwealth. Such revenue shall include all interstate revenue from business originating and terminating within the Commonwealth and a proportion of interstate revenue from all interstate business passing through, into or out of the Commonwealth.

B. Every corporation doing in the Commonwealth the business of furnishing water, heat, light and power, whether by means of gas or steam, except (i) pipeline transmission companies taxed pursuant to § 58.1-2627.1 or (ii) an electric supplier as defined in § 58.1-400.2, shall report annually, on April 15, to the Commission all real and tangible personal property of every description in the Commonwealth, belonging to it as of January 1 preceding, showing particularly, as to property owned by it, the county, city, town or magisterial district wherein such property is located. The report shall also show the total gross receipts for the 12 months ending December 31 next preceding.

C. Every corporation in the Commonwealth in the business of furnishing heat, light and power by means of electricity shall report annually, on April 15, to the Commission all real and tangible personal property of every description in the Commonwealth, belonging to such corporation, leased by such corporation for a term greater than one year, or operated by such corporation as of the preceding January 1, showing particularly the county, city, town or magisterial district in which such property is located, unless reported to the Commission by another corporation or electric supplier in the Commonwealth in the business of furnishing heat, light and power by means of electricity. Real and tangible personal property of every description in the Commonwealth leased by such corporation for a term greater than one year or operated by such corporation shall mean only those assets directly associated with production facilities and shall not mean real estate or vehicles. The report shall also show the total gross receipts less sales to federal, state and local governments for their own use. Electric suppliers organized as cooperatives shall report annually their gross receipts received from nonmembers.

D. Every electric supplier as defined in § 58.1-2600 shall report annually, on April 15, to the Commission all real and tangible personal property owned by such electric supplier, leased by such electric supplier for a term greater than one year, or operated by such electric supplier in the Commonwealth and used directly for the generation, storage, transmission, or distribution of electricity for sale as of the preceding January 1, showing particularly the county, city, town, or magisterial district in which such property is located, unless reported to the Commission by another corporation or electric supplier in the Commonwealth in the business of furnishing heat, light, and power by means of electricity. Real and tangible personal property of every description in the Commonwealth leased by such electric supplier for a term greater than one year or operated by such electric supplier shall mean only those assets directly associated with production facilities and shall not mean real estate or vehicles. The report shall also show the total gross receipts less sales to federal, state, and local governments for their own use. Electric suppliers organized as cooperatives shall report annually their gross receipts received from nonmembers.

E. Every pipeline transmission company shall report annually, on April 15, to the Department all of its real and tangible personal property of every description as of the beginning of January 1 preceding, showing particularly in what city, town or county and magisterial district therein the property is located.

F. The report required by subsections A through E shall be completed on forms prepared and furnished by the Commission. The Commission shall include on such forms such information as the Commission deems necessary for the proper administration of this chapter.

G. The report required by this section shall be certified by the oath of the president or other designated official of the corporation or person.

Code 1950, §§ 58-581, 58-607 through 58-609; 1956, c. 69; 1968, c. 637; 1972, c. 813; 1979, c. 284; 1984, c. 675; 1987, c. 376; 1988, c. 899; 1998, c. 197; 1999, c. 971; 2002, cc. 444, 502; 2004, cc. 661, 716; 2021, Sp. Sess. I, cc. 49, 50.

A. Companies or persons otherwise taxable under § 58.1-2626 but that begin business on or after the beginning of the tax year shall pay a license tax, the measure of which shall be an estimate of the gross receipts of such company or person for the year or for that part of the year in which it begins business. Such estimate shall be reported to the Commission on forms furnished by the Commission within thirty days after beginning business and the license tax measured thereby and assessed by the Commission shall be paid into the state treasury within thirty days after such assessment is made or by June 1 of the year if such assessment is made more than thirty days prior to June 1.

B. Any company or person subject to the provisions of subsection A shall, for the immediately following tax year, pay the license tax measured by an estimate of the gross receipts for the year beginning January 1 of the year following the year in which it began business. Such estimate of gross receipts shall be reported to the Commission within the time requirements prescribed by § 58.1-2628.

C. Every estimate made under this section shall be subject to review by the Commission after the close of the year for which such estimate is made and any variance between the estimate and the actual gross receipts shall be adjusted by the Commission by order of refund or the assessment of additional license tax depending upon whether such estimate was in excess of or less than the actual gross receipts of such taxpayer for such year.

Code 1950, §§ 58-504, 58-505; 1956, c. 69; 1984, c. 675; 1988, c. 899; 2002, c. 502.

A. Any taxpayer liable for a license tax required by this chapter or liable for the special regulatory revenue tax required by Article 6 (§ 58.1-2660 et seq.) of this chapter that acquires, by purchase or otherwise, the business or any part thereof of another taxpayer also liable for such taxes but which would not be otherwise subject to the taxes following such sale or disposition shall, for the purpose of determining the amount of its taxes for the year following the year in which such business was so acquired, include as a part of its gross receipts for the taxable years, the gross receipts of the business so acquired for that portion of the taxable year as such business was not operated by the acquiring taxpayer.

B. The provisions of subsection A shall not apply to any taxpayer whose license tax for the year involved is measured by an estimate of gross receipts for such year as prescribed in § 58.1-2629.

Code 1950, § 58-506; 1984, c. 675; 2002, c. 502.

Whenever there is a consolidation or merger of corporations taxable under § 58.1-2626 or taxable under Article 6 (§ 58.1-2660 et seq.) of this chapter, liability for the taxes shall attach to the corporation thus formed and the gross receipts which shall be used for measuring the license tax or special regulatory revenue tax of the corporation thus formed shall include the gross receipts of the corporations which were consolidated or merged.

Code 1950, § 58-507; 1984, c. 675; 1988, c. 899; 2002, c. 502.

All provisions of this article applicable to the license tax of any corporation subject to §§ 58.1-2629, 58.1-2630 or § 58.1-2631, including such provisions relating to the assessment, payment and collection of the tax and the method and time of reporting, except as may be otherwise provided, shall be applicable to the license tax of such corporation for the year covered by such sections.

Code 1950, § 58-509; 1984, c. 675.

A. The Commission shall assess the value of the reported property subject to local taxation of each telegraph, telephone, water, heat, light and power company and electric supplier, except a pipeline transmission company taxed pursuant to § 58.1-2627.1, and shall assess the license tax levied hereon if such company is subject to the license tax under this article.

B. Should any such person fail to make the reports required by this article on or before April 15 of each year, the Commission shall assess the value of the property of such person, and its gross receipts upon the best and most reliable information that can be obtained by the Commission.

C. In making such assessment, the Commission may require such person or its officers and employees to appear with such documents and papers as the Commission deems necessary.

Code 1950, §§ 58-582, 58-610; 1956, c. 69; 1968, c. 637; 1972, c. 813; 1984, c. 675; 1988, c. 899; 1999, c. 971.

A certified copy of the assessment made pursuant to § 58.1-2633, when made, shall be immediately forwarded by the clerk of the Commission to the Comptroller and to the president or other proper officer of each company, and to the governing body of each county, city and town wherein any property belonging to such company is situated and to each commissioner of the revenue.

The assessment shall show the type of property and its value and location.

Code 1950, §§ 58-583, 58-584, 58-592, 58-611, 58-612; 1968, c. 637; 1972, c. 813; 1983, c. 570; 1984, c. 675.

Every taxpayer assessed a license tax under any of the provisions of this article shall pay such tax into the state treasury by June 1 of each year.

Code 1950, §§ 58-586, 58-591, 58-613; 1956, c. 69; 1984, c. 675.

A. 1. Any locality may by ordinance assess a revenue share of (i) up to $1,400 per megawatt, as measured in alternating current (AC) generation capacity of the nameplate capacity of the facility based on submissions by the facility owner to the interconnecting utility, on any solar photovoltaic (electric energy) project, or (ii) up to $1,400 per megawatt, as measured in alternating current (AC) storage capacity, on any energy storage system.

2. Except as prohibited by subdivision 3, the maximum amount of the revenue share that may be imposed shall be increased on July 1, 2026, and every five years thereafter by 10 percent.

3. The provisions of subdivision 2 shall not apply to solar photovoltaic projects or energy storage systems for which an application has been filed with the locality, as defined by subsection D of § 58.1-3660, and such application has been approved by the locality prior to January 1, 2021. The provisions of subdivision 2 shall apply to all such projects and systems for which an application is approved by the locality on or after January 1, 2021.

B. For purposes of this section, "solar photovoltaic (electric energy) project" shall not include any project that is (i) described in § 56-594, 56-594.01, 56-594.02, or 56-594.2; (ii) 20 megawatts or less, as measured in alternating current (AC) generation capacity, for which an initial interconnection request form has been filed with an electric utility or a regional transmission organization on or before December 31, 2018; or (iii) five megawatts or less.

2020, cc. 1224, 1270; 2021, Sp. Sess. I, cc. 49, 50, 429.