Tax Type
Retail Sales and Use Tax
Description
Glue down carpet sales and installation
Topic
Taxability of Persons and Transactions
Date Issued
10-15-1985
October 15, 1985
Re: § 58.1-1821 Application/ Sales and Use Tax
Dear ****
This will reply to your letter of September 13, 1985, requesting relief from an, assessment issued in the above referenced case.
Facts
In connection with its carpet sales and installation business, ***** (Taxpayer), was assessed use tax on the cost price of certain carpeting sold to various customers pursuant to certificates of exemption. Taxpayer contends that, all of such sales involved sales of glued down carpet. However, according to Taxpayer, the carpet in question can be easily removed from the floor after installation, without material damage to the carpet or the underlying floor itself. In addition, Taxpayer states that such easily removed carpet can often be reused in another location.
Accordingly, Taxpayer maintains that it should be considered to be a retailer in connection with its carpet sales and installation business and therefore should not be liable for sales and use tax on its sales of carpet pursuant to valid certificates of exemption.
Determination
§ 630-10-27(G) of the Virginia Sales and Use Tax Regulations provides:
[a] person selling and installing tangible personal property that becomes real property after installation is generally considered a contractor, except that a retailer selling and installing... floor coverings...is not classified as a using or consuming contractor.
For purposes of the above referenced subsection, a retailer means, "any person who maintains a retail or wholesale place of business, and inventory of [floor coverings] and/or materials which enter into or become a component part of [floor coverings] and who performs installation as part of or incidental to the sale of [floor coverings]." Ibid.
Furthermore, floor coverings, as distinct from floors themselves are defined to include, "rugs, mats, padding, wall-to-wall carpets, when installed by the tack strip or stretch-in methods...which are not glued, cemented, or otherwise permanently attached to the floor below." Ibid.
Therefore, the subsection, concludes, anyone "selling and installing floor coverings which become permanently attached to floors are deemed to be using or consuming contractors." Ibid.
All of the above establish the distinction between floor coverings and floors themselves. Since the carpeting in the present case is affixed is such a way as to be easily removable, it cannot be deemed to be the floor itself.
Based on all of the foregoing, I find basis for granting the relief requested in this case.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner