Tax Type
Retail Sales and Use Tax
Description
Exemption applicable to the sale of small quantities of propane gas
Topic
Clarification
Definitions
Exemptions
Date Issued
04-15-2014
April 15, 2014
Re: Request for Ruling: Retail Sales and Use Tax
Dear *****:
This is in response to your letter in which you request clarification of the retail sales and use tax exemption applicable to the sale of small quantities of propane gas used for domestic consumption.
The Taxpayer poses two questions which are set out below and followed by my responses.
Question 1
How does the tax commission define "small quantity' as related to propane/LP gas?
Response: Subsection D of Title 23 of the Virginia Administrative Code 10-210-630 provides the following:
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- Dealers will not be required to obtain a certificate of exemption on sales of small quantities of kerosene, firewood, or other fuels, provided sales receipts or daily sales records are available which clearly indicate the number of gallons (or other measure) of the specific type of fuel sold and the number of purchasers. [Emphasis added.]
The Department recently issued Public Document 14-3 (1/13/14). It clarified the "small quantities" phrase in the above cited regulation by setting out the following: "While the regulation does not indicate exactly what amount is considered a small amount, I would generally deem a small portable propane gas cylinder (such as a 20 or 34 pound tank or smaller) that is filled to capacity to contain a small quantity of propane gas."
Question 2
Once defined, how does the tax commission apply the small quantity definition? To each sale or to an average of sales units divided by the total number of sales for the month/quarter/year? Another method?
Response: The small quantity definition is applied to each sale. As noted by the above cited regulation, each sale should be supported either by a sales receipt or a daily sales record that clearly indicates the number of gallons (or other measure) of the specific type of fuel sold and the number of purchasers.
The regulation and public document cited are available on-line at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department's web site. If you have any questions about this ruling, please contact ***** in the Department's Office of Tax Policy, Appeals and Rulings, at *****.
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- Sincerely,
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Craig M. Burns
Tax Commissioner
AR/1-5623298141.R
Rulings of the Tax Commissioner