Tax Type
Retail Sales and Use Tax
Description
Medical Supplies and Drugs
Topic
Exemptions
Date Issued
09-02-1982
September 2, 1982
Re: 58-1118 Application: Sales and Use Tax
Dear ************************************
Reference is made to your letter of June 1, 1982 and our meeting of August 23, 1982 in which you apply for correction of sales tax assessed as the result of a recent audit.
Facts
*********** is a retailer and ..wholesaler of medical supplies, equipment, and drugs, .with offices located in Maryland. ******** makes deliveries into Virginia on more than twelve occasions annually and is therefore liable to Virginia for collection of the sales tax under the provisions of § 58-441.12(2)(d), effective July 1, 1979. Prior to July 1, 1979, ***** had been collecting and reporting sales tax to Virginia under the account number of an affiliated corporation located in Virginia.
****** was audited and contests the assessment of sales tax on certain devices (principally birth control devices) which are included within the definitions of Virginia Drug Control Act (Virginia Code § 54-524.84:1 et. seq.).
Determination
In interpreting the sales and use tax exemptions set forth in the Virginia Code, the department must strictly construe such exemptions against the taxpayers. This doctrine has been espoused repeatedly by the courts. (See Winchester TV Cable Co. v. State Tax Commissioner 216 Va. 286, 217 S.E. 2d 885; WTAR Radio-TV Corp. v. Commonwealth, 217 VA. &77, 234 S.E.2d 245; Jefferson Publishing Corp. v. Forst, 217 VA. 988, 234 S.E. 2d 297.) In the instant case, the statute in question (Virginia Code § 58-441.6(S), exempts from the sales and use tax:
-
- controlled drugs purchased by a licensed physician for use in his professional practice (emphasis added).
- controlled drugs purchased by a licensed physician for use in his professional practice (emphasis added).
It should be noted that legislation as introduced at the 1980 General Assembly which would have exempted birth control devices. However, this legislation, carried over to the 1981 session, was defeated in the Senate. A copy of this legislation and the comments on the bill furnished to the legislature by the department are enclosed.
Based upon the foregoing, I must deny your application for correction. However, that portion of the assessment representing interest accrued between June 17, 1981 and March 5, 1982 will be abated. Upon receipt of the revised assessment, if you wish to arrange a payment schedule you may do so by contacting our ***********************
Sincerely.,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner