Tax Type
Retail Sales and Use Tax
Description
Nursery; Plastic film; Agriculture; Greenhouse
Topic
Exemptions
Property Subject to Tax
Date Issued
12-04-2000
December 4, 2000
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear ****
This will reply to your letter in which you seek correction of the retail sales and use tax audit assessment issued to * * * (the "Taxpayer"), for the period of April 1996 through December 1998. I apologize for the delay in responding to your appeal.
FACTS
The Taxpayer is a nursery in the business of growing plants, shrubs and trees for sale. The Taxpayer was audited and assessed tax on plastic film used to protect the plants during the winter months. The Taxpayer is taking exception to the taxing of the plastic film based on a reading of Title 23 of the Virginia Administrative Code (VAC) 10210-50, Agriculture, copy enclosed, and Public Document 96-68 (4/26/96), also enclosed.
DETERMINATION
Title 23 VAC 10-210-50.A provides that structural construction materials used by an entity producing agricultural production for market are taxable. This regulation includes greenhouses and their plastic coverings as being taxable construction materials. This regulation provides that the term "structural construction materials" shall specifically exclude "shade cloth".
According to the auditor, the plastic covering at issue in this audit is stretched over the greenhouse piping structure and is actually a part of the greenhouse. If this is the case, the plastic covering was correctly held taxable in the audit. On the other hand, if the film is a ground covering used to protect plants from the winter weather, it may be purchased exempt of the tax in accordance with VAC 10-210-50 and P.D. 96-68, copy enclosed.
I am referring this audit back to the * * * to determine the nature of the plastic film covering at issue in this appeal. Once that determination is made, the application of tax will be reviewed in accordance with the policies set forth above. If you should have any questions, please contact * * * Office of Tax Policy, at * * *
Danny M. Payne
Tax Commissioner
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear ****
This will reply to your letter in which you seek correction of the retail sales and use tax audit assessment issued to * * * (the "Taxpayer"), for the period of April 1996 through December 1998. I apologize for the delay in responding to your appeal.
FACTS
The Taxpayer is a nursery in the business of growing plants, shrubs and trees for sale. The Taxpayer was audited and assessed tax on plastic film used to protect the plants during the winter months. The Taxpayer is taking exception to the taxing of the plastic film based on a reading of Title 23 of the Virginia Administrative Code (VAC) 10210-50, Agriculture, copy enclosed, and Public Document 96-68 (4/26/96), also enclosed.
DETERMINATION
Title 23 VAC 10-210-50.A provides that structural construction materials used by an entity producing agricultural production for market are taxable. This regulation includes greenhouses and their plastic coverings as being taxable construction materials. This regulation provides that the term "structural construction materials" shall specifically exclude "shade cloth".
According to the auditor, the plastic covering at issue in this audit is stretched over the greenhouse piping structure and is actually a part of the greenhouse. If this is the case, the plastic covering was correctly held taxable in the audit. On the other hand, if the film is a ground covering used to protect plants from the winter weather, it may be purchased exempt of the tax in accordance with VAC 10-210-50 and P.D. 96-68, copy enclosed.
I am referring this audit back to the * * * to determine the nature of the plastic film covering at issue in this appeal. Once that determination is made, the application of tax will be reviewed in accordance with the policies set forth above. If you should have any questions, please contact * * * Office of Tax Policy, at * * *
Danny M. Payne
Tax Commissioner
Related Documents
Rulings of the Tax Commissioner