Tax Type
Retail Sales and Use Tax
Description
Dealer/distributors
Topic
Basis of Tax
Property Subject to Tax
Date Issued
11-08-1982
November 8, 1982
Re: Request for Ruling: Sales and Use Tax
Dear **************
This will reply to your correspondence of August 24, 1982 in which you requested a ruling on the applicability of sales and use tax to certain dealer/distributors of products of the ***********.
FACTS
*********** produces solar hot water system component parts which are in turn sold to dealer/distributors who provide a complete solar hot water system to their customers on a furnished and installed basis. When paying invoices, certain dealer/distributors deduct sales and use tax from their bill, and provide a resale exemption certificate.
******* requests a ruling on the applicability of sales and use tax to the purchase of these systems by such dealer/distributors.
RULING
Under § 58-441.15(a) of the Code of Virginia, any person who contracts orally, in writing, or by purchase order, to perform construction, reconstruction, installation, repair, or any other service with respect to real estate or fixtures thereon, and in connection therewith to furnish tangible personal property, shall be deemed to have purchased such tangible personal property for use or consumption. Therefore, your dealer/distributors are liable for sales and use tax on purchases of component parts manufactured and supplied by ***********. Further, dealer/distributors may not pass the sales and use tax on to anyone else as a tax, but should instead take the amount of tax into consideration when submitting bids for the installation of the system.
If further information or clarification is needed, please do not hesitate to let me know.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner