Tax Type
Retail Sales and Use Tax
Description
Hazardous waste removal/disposal billed to customers in other transactions
Topic
Assessment
Exemptions
Taxability of Persons and Transactions
Date Issued
10-02-2004
October 1, 2004
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear *************:
This will reply to your letter in which you request correction of a retail sales and use tax assessment issued to ***** (the "Taxpayer") for the period September 1997 through August 2000. I apologize for the delay in responding to your letter.
FACTS
The Taxpayer operates an automotive paint and body shop. The Taxpayer was audited and assessed sales tax on charges for hazardous waste removal and disposal billed to customers in transactions involving the sale of tangible personal property. The Taxpayer maintains that the charges in question were treated as an exempt service based on oral advice received from the Department of Taxation.
DETERMINATION
Virginia Tax Bulletin 94-10 (12/1/94) explains the Department's policy with respect to charges for the disposal of hazardous waste and materials. When a disposal fee is charged in connection with the sale of tangible personal property, the charge is subject to sales and use tax. Tax Bulletin 94-10 explains that the basis for this policy is the definition of "sales price" in Va. Code § 58.1-602. The term "sales price" includes charges for services provided in connection with the sale of tangible personal property. The Taxpayer does not dispute the fact that the disposal charges were made in connection with sales of tangible personal property
My concern with the information you received orally is that it is often difficult to determine what specific question was asked. The taxability of some charges, such as the waste disposal fee, depends on the specific circumstances surrounding the transaction. For example, the waste disposal fee is taxable if charged in connection with the sale of tangible personal property. If waste disposal is provided solely as a service to customers and there is no sale of tangible personal property, the fee is exempt. In either case, the application of the tax to such transactions is clearly set out in the tax bulletin and other public documents.
Based on this determination, the assessment is correct. The Taxpayer should remit the balance of the assessment totaling *********** to: Virginia Department of Taxation, Office of Policy and Administration, Appeals and Rulings, P. O. Box 1880, Richmond, Virginia, 23218-1880, Attention: *****. No further interest will accrue provided the outstanding assessment is paid within 30 days from the date of this letter.
The Code of Virginia section and Tax Bulletin cited, along with other reference documents, are available on-line in the Tax Policy Library section of the Department's web site, located at www.tax.state.va.us. If you have any questions concerning this determination, please contact ***** at *****.
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- Sincerely,
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- Kenneth W. Thorson
Tax Commissioner
- Kenneth W. Thorson
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AR/32417S
Rulings of the Tax Commissioner