Tax Type
Retail Sales and Use Tax
Description
Motor vehicle extended warranty plans
Topic
Taxability of Persons and Transactions
Date Issued
06-02-1987
June 2, 1987
Re: Ruling Request/ Sales and Use Tax
Dear **********************
This will reply to your letter of April 28. 1987 on behalf of ******************(taxpayer) seeking clarification of my March 30, 1987 letter in the above referenced case.
The department's records indicate that the sales and use tax assessment for the audit period February, 1982 through December 1984, which initially held all sales by the taxpayer of extended warranty plans taxable, was adjusted in March of 1986 to remove sales of extended warranty plans issued by the taxpayer through*************** based on a March 18, 1986 ruling of the department to another taxpayer which was subsequently found to be in error.
However, the March 18, 1986 ruling made no mention of sales of extended warranty plans by automobile dealers through ************************.
Furthermore, §630-10-62.1(F) of the Virginia Retail Sales and Use Tax Regulations provides that the tax does not apply to "[e]xtended warranty plans issued by an insurance company regulated by the Bureau of Insurance of the State Corporation Commission." The extended warranty plans sold by the taxpayer in this case through *********** do not qualify for exemption from the tax under this regulation section since neither the taxpayer, which was identified as the issuer of the plans, nor*************** the company through which such plans were administered, were " insurance companies" regulated by the Bureau of Insurance of the State Corporation Commission at the time of the audit.
Therefore, the March 18, 1986 ruling is inapplicable to the taxpayer's sales of extended warranty plans issued through**********************. Accordingly, there exists no further basis for adjustment of the instant assessment.
Sincerely,
W. H Forst
Tax Commissioner
Rulings of the Tax Commissioner