Tax Type
Retail Sales and Use Tax
Description
Auction conducted on behalf of nonprofit organization; Auctioneer servcies free of charge
Topic
Taxability of Persons and Transactions
Date Issued
04-30-1985
April 30, 1985
RE: Request for Ruling/Sales and Use Tax
Dear ****
This will reply to your letter of February 5, 1985 in which you request a ruling on the applicability of the sales and use tax to tangible personal property sold by an auctioneer at an auction conducted on behalf of a nonprofit organization to which the auctioneer has donated his services free of charge.
While I understand that auctioneers in the situation described above receive no compensation for their services, the sales and use tax law makes no distinction between auctions conducted gratis and auctions conducted for compensation. The Virginia sales tax is imposed under Section 58.1-603 of the Code of Virginia upon "every person who engages n the business of selling at retail or distributing tangible personal property" and the definition of "person" found in Virginia Code Section 58.1-602.13 specifically includes "any...auctioneer." Since an auctioneer in engaged in the business of selling tangible personal property and since an exemption from the sales and use tax does not exist for sales made by an auctioneer on behalf of nonprofit organizations, the sales tax should be collected by auctioneers at all such events.
I have enclosed a copy of Section 630-10-9 of the Virginia Retail Sales and Use Tax Regulations which explains how the tax applies to auctioneers generally. Please feel free to contact us if you have any questions.
Sincerely.
W. H. Forst
Tax Commissioner
RE: Request for Ruling/Sales and Use Tax
Dear ****
This will reply to your letter of February 5, 1985 in which you request a ruling on the applicability of the sales and use tax to tangible personal property sold by an auctioneer at an auction conducted on behalf of a nonprofit organization to which the auctioneer has donated his services free of charge.
While I understand that auctioneers in the situation described above receive no compensation for their services, the sales and use tax law makes no distinction between auctions conducted gratis and auctions conducted for compensation. The Virginia sales tax is imposed under Section 58.1-603 of the Code of Virginia upon "every person who engages n the business of selling at retail or distributing tangible personal property" and the definition of "person" found in Virginia Code Section 58.1-602.13 specifically includes "any...auctioneer." Since an auctioneer in engaged in the business of selling tangible personal property and since an exemption from the sales and use tax does not exist for sales made by an auctioneer on behalf of nonprofit organizations, the sales tax should be collected by auctioneers at all such events.
I have enclosed a copy of Section 630-10-9 of the Virginia Retail Sales and Use Tax Regulations which explains how the tax applies to auctioneers generally. Please feel free to contact us if you have any questions.
Sincerely.
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner