Tax Type
Retail Sales and Use Tax
Description
Sign installation
Topic
Taxability of Persons and Transactions
Date Issued
07-15-1986
July 15, 1986
Re: 58.1-1821 Application/Sales and Use Tax
Dear ****************
This will refer to your letter of September 6, 1985, in which you submitted an application for correction of sales and use tax assessed to********** and to the November 1, 1985 and March 7, 1986 letters of ************** of this department, in which additional information relative to your appeal was requested.
From your letter, I understand the primary basis of your appeal to be the fact that certain signs produced by your client were erected on real estate. Section 630-10-100 of the Virginia Retail Sales and Use Tax Regulations provides that "[n]o tax is applicable to the charge for constructing and installing a sign which becomes attached to realty, but the person constructing and installing the item must pay the tax on all property used in the construction and installation." Therefore, if your client produced and erected a sign that became a part of realty, the charge made to his customer for the sign should not have been included in the department's audit. Rather, your client would have been operating as a contractor with respect to real estate. Regulation Section 630-10-100 also treats the maintenance and repair of signs affixed to realty in a similar manner, stating that "[p]ersons maintaining or repairing signs which are real property are acting as contractors...and...must pay the tax on all property used in the maintenance or repair."
In this case, however, I have not been provided with any information upon which to base a determination. Without specific information on the types of signs in question, it is unknown whether they became affixed to realty or retained their classification as tangible personal property after installation. Therefore, I must deny your application for correction.
I am willing to reconsider this matter if you will provide the information necessary to determine whether your client's signs constituted real estate or tangible personal property. If you wish to contest the assessment on any other grounds, that information should be presented at the same time.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner