ST-11A Requirements
November 14, 2024
RE: § 58.1-1821 Refund Application: Sales and Use Tax
Dear *****:
This is in response to your letter submitted on behalf of ***** (the “Taxpayer”) requesting correction of a denied refund request for retail sales and use tax for the period April 2019 through December 2020.
FACTS
The Taxpayer, a brewery in Virginia that produces a variety of beverages for consumption, requested a refund on use tax accrued on a number of items of tangible personal property used in its facilities. The Department reviewed the request and approved a partial refund. The Taxpayer appeals the remainder of the claim asserting that the purchases qualify for the pollution control exemption and that the documentation provided was sufficient to support its claim.
DETERMINATION
Virginia Code § 58.1-609.3 9 provides an exemption from the retail sales and use tax for “[c]ertified pollution control equipment and facilities as defined in § 58.1-3660, except for any equipment that has not been certified to the Department of Taxation by a state certifying authority pursuant to such section.” Title 23 of the Virginia Administrative Code 10-210-2090 addresses the sales and use tax exemption for pollution control equipment and facilities. Subsection B defines “pollution control equipment and facilities” as “any real or tangible personal property, equipment, facilities or devices used primarily for the purpose of abating or preventing air or water pollution in Virginia.” The regulation goes on to say that “[a]ny property which is certified as used for these purposes is not subject to the tax…” [Emphasis added.] Thus, within the context of examining the books and records for purchases by a business, property or facilities are exempt from the retail sales and use tax if it is used directly to abate pollution or has been certified as pollution control equipment by a certifying agency. See Public Document (P.D.) 10-262 (12/14/2010), P.D. 18-112 (6/8/2018), and P.D. 23-6 (1/11/2023).
The auditor denied the refund for the pollution control equipment because Form ST-11A had not been provided. In its refund request, the Taxpayer provided a federal operating permit issued by the Virginia Department of Environmental Quality (DEQ) that states “this permit is issued consistent with the Administrative Process Act, and Title 9 of the Virginia Administrative Code (VAC) 5-80-50 through Title 9 VAC 5-80-300 of the State Air Pollution Control Board Regulations for the Control and Abatement of Air Pollution of the Commonwealth of Virginia.”
DEQ is one of the state agencies authorized to verify pollution control equipment for purposes of the exemption. As such, DEQ is responsible for evaluating and issuing the appropriate certification. The Department’s position is that any property certified by the appropriate state certifying authority as pollution control equipment and facilities qualify for exemption from the tax. See P.D. 91-5 (1/23/1991), P.D. 04-108 (9/14/2004), P.D. 12-73 (5/9/2012), and P.D. 23-2 (1/6/2023).
With regard to the Form ST-11A, the Department currently requires consumers to issue this certificate to make exempt purchases of qualifying pollution control equipment, machinery, and other tangible personal property from vendors. Consumers must apply to the Department for the Form ST-11A. In order to obtain this certification of exemption, an applicant should submit a written request to the Department on its business letterhead and provide the required information. See the Department’s website for more information.
In accordance with this determination, the Taxpayer’s refund request will be returned to audit staff in order to issue a refund for purchases that qualified for the pollution control exemption.
The Code of Virginia sections and regulation cited are available online at law.lis.virginia.gov. The public documents cited are available at tax.virginia.gov in the Laws, Rules, and Decisions section of the Department’s website. If you have any questions about this response, you may contact ***** in the Department’s Office of Tax Policy, Appeals and Rulings, at (804) ***** or *****@tax.virginia.gov.
Sincerely,
James J. Alex
Tax Commissioner
Commonwealth of Virginia