                                 CODE OF VIRGINIA

LIMITATION ON GROSS RECEIPTS; STAFFING FIRMS (§ 58.1-3732.4)

A. Gross receipts for license tax purposes under this chapter shall not include
employee benefits paid by a staffing firm to, or for the benefit of, any
contract employee for the period of time that the contract employee is actually
employed for the use of the client company pursuant to the terms of a PEO
services contract or temporary help services contract. The taxable gross
receipts of a staffing firm shall include any administrative fees received by
such firm from a client company, whether on a fee-for-service basis or as a
percentage of total receipts from the client company.

B. For the purpose of this section:
			&#8220;Client company&#8221; means a person that enters into a contract with
a staffing firm by which the staffing firm, for a fee, provides PEO services or
temporary help services.
			&#8220;Contract employee&#8221; means an employee performing services under a
PEO services contract or temporary help services contract.
			&#8220;Employee benefits&#8221; means wages, salaries, payroll taxes, payroll
deductions, workers&#8217; compensation costs, benefits, and similar expenses.
			&#8220;PEO services&#8221; or &#8220;professional employer organization
services&#8221; means an arrangement whereby a staffing firm assumes employer
responsibility for payroll, benefits, and other human resources functions with
respect to employees of a client company with no restrictions or limitations on
the duration of employment.
			&#8220;PEO services contract&#8221; means a contract pursuant to which a
staffing firm provides PEO services for a client company.
			&#8220;Staffing firm&#8221; means a person that provides PEO services or
temporary help services.
			&#8220;Temporary help services&#8221; means an arrangement whereby a staffing
firm temporarily assigns employees to support or supplement a client
company&#8217;s workforce.
			&#8220;Temporary help services contract&#8221; means a contract pursuant to
which a staffing firm provides temporary help services for a client company.

HISTORY: 1998, c. 347; 2005, c. 839.