Tax Type
Retail Sales and Use Tax
Description
Vehicles used to carry milk and poultry
Topic
Taxability of Persons and Transactions
Date Issued
10-17-1986
October 17, 1986
Re: Ruling Request / Exempt Commodities
Sales and Use Tax
Dear **********************
This is in reply to your letter of May 27, 1986 in which you request a ruling regarding the applicability of the Virginia Retail Sales and Use Tax to the purchase of certain tangible personal property used by **************** (Corporation). Specifically, you have asked if there should be a difference between the Virginia Retail Sales and Use Tax treatment of purchases of vehicle parts and repairs for vehicles used to carry milk and vehicles used to carry poultry.
RULING
The exemption you question is granted under Virginia Code §58.1-608.10 and further explained under Virginia Sales and Use Tax Regulation §630-10-24.3. which states in part:
-
- A common carrier must be authorized to operate under a certificate of convenience and necessity issued by the State Corporation Commission or the Interstate Commerce Commission in order to qualify for this exemption. This regulation applies to common carriers of property by motor vehicle, including restricted common carriers, and has no application to contract or other carriers...
The applicability of the sales and use tax exemption for tangible personal property purchased by a common carrier operation depends on the use rather than the type of property. The same item may be taxable in one instance and exempt in another, depending entirely upon its usage ...
- A common carrier must be authorized to operate under a certificate of convenience and necessity issued by the State Corporation Commission or the Interstate Commerce Commission in order to qualify for this exemption. This regulation applies to common carriers of property by motor vehicle, including restricted common carriers, and has no application to contract or other carriers...
Under 49 USCA §10526 (a) (6) (for the ICC) and Virginia Code §56-274 (7) (for the SCC) both milk and poultry are considered exempt commodities; as such, not subject to the authority of either the ICC or SCC. Because these two items are exempt from the authority of the ICC and the SCC, the hauling of these two items does not constitute part of Corporation's common carrier operation. Subsequently, purchases of vehicle parts and repairs for vehicles used to carry milk and vehicles used to carry poultry do not come under the exemption granted under Virginia Code §58.1-608.10.
Since it is possible for an item of tangible personal property to be used in both a taxable and an exempt manner, the tax due on such an item should be prorated between the percentage of time the property is used in a taxable manner and the percentage of time the property is used in an exempt manner.
I hope that this ruling clarifies this area for you. If you have any further questions, please do not hesitate to contact this office.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner