Tax Type
Retail Sales and Use Tax
Description
Mirror sales and installation
Topic
Taxability of Persons and Transactions
Date Issued
06-03-1986
June 3, 1986
Re: Ruling Request/ Sales and Use Tax
Dear ******************
This will reply to your letter of January 23, 1986 seeking a ruling on the correct application of the sales and use tax in two situations involving the sale and installation of mirrors.
Facts
Taxpayer is a seller and installer of mirrors and glass for use in businesses and homes. Taxpayer requests a ruling as to whether it is required to separately state charges for the sale and installation of mirrors and collect the 4% sales and use tax thereon from customers, which are installed as part of a larger contract job; or whether it may include such mirrors in its contract bid and pay sales and use tax on the cost of the mirrors, as with the cost of other materials to be used in completing the job.
In addition taxpayer requests a ruling as to whether it is required to collect the 4' sales and use tax on all materials in a large "mirror only" contract job. It is our understanding that taxpayer install& all of its mirrors, whether as part of a larger contract job or in "mirror only" contract situations, by the use of glue or adhesive which permanently bonds such mirrors to the underlying realty.
Ruling
§630-10-27(G) of the Virginia Sales and Use Tax Regulations, provides that:
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- [a] person selling and installing tangible personal property that becomes real property after installation is generally considered to be a contractor. [However], a retailer selling and installing fences, venetian blinds, window shades, awnings, storm windows and doors, floor coverings ... cabinets ... or other like or comparable items is not classified as a using or consuming contractor with respect to them.
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- [Furthermore], persons who are not classified as retailers ... and who sell and install fences, venetian blinds, etc., are deemed to be contractors and must pay the sales tax on such items at the time of purchase.
- [Furthermore], persons who are not classified as retailers ... and who sell and install fences, venetian blinds, etc., are deemed to be contractors and must pay the sales tax on such items at the time of purchase.
Assuming that taxpayer's mirrors are installed in the manner represented (i.e., by gluing or adhesive which permanently bonds them to the underlying realty), and cannot be removed without permanent damage to the mirrors themselves or the underlying realty, taxpayer should consider itself a using and consuming contractor with respect to such mirrors and pay the sales tax on such mirrors at the time of purchase from suppliers. In addition, §630-10-27(A) of the regulations provides, "[i]f a supplier of a contractor doing work in Virginia does not collect the Virginia tax from the contractor, the contractor will be liable for the use tax on his purchases from the supplier."
Therefore, taxpayer is not required to collect the tax from customers but may include its costs for such mirrors in submitting bids or quoting prices to customers. Of course retail sales of mirror, or other glass on an uninstalled basis are subject to the tax.
I hope all of the above has answered your questions, but please let me know if we can be of further assistance.
Sincerely
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner