Tax Type
Retail Sales and Use Tax
Description
Ceramic kiln firing fees
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
11-24-1987
November 24, 1987
Re: Ruling Request / Firing Charges
Retail Sales and Use Tax
Dear ******************
This is in reply to your letter of February 5, 1987 in which you request a ruling regarding the applicability of the Virginia Retail Sales and Use Tax to the charges made by your firm for ceramic firing. I apologize for the delay in responding to your letter and I hope that the delay has not caused you any inconvenience.
FACTS
********** (Firm) is a ceramic shop, which like many ceramic shops, both sells and fires pieces of dried clay (greenware). At the time the greenware is purchased, customers may elect to pay for the process of firing or they may elect to fire the greenware in their own kilns. Also, customers may create their own greenware and arrange to have it fired by the Firm. The firing process consists of taking the dried clay after being decorated by the customer and placing it in an electric kiln. The firing process permanently hardens the greenware into a finished product.
You have requested a ruling regarding the applicability of the Virginia Retail Sales and Use Tax to this firing process.
DETERMINATION
Virginia Code §58.1-603 imposes the sales tax on "... the gross sales price of each item or article of tangible personal property when sold or distributed in this Commonwealth." As defined under Virginia Code §58.1-602, "Sales price" is:
-
- ...the total amount for which tangible personal property or services are sold, including any services that are a part of the sale, ...(Emphasis added)
Based upon the above statutes, when the Firm sells greenware and as a part of the sale furnishes the service of firing, sales tax must be computed on the total charge made to the customer even though the fee for firing may be separately stated. However, when firing is provided separate from the sale of greenware, the Firm is providing a nontaxable service. As such, the sales tax would not be applicable if the customer returns the greenware for subsequent firings or brings in greenware acquired from another source for firing.
The department is in the process of taking the appropriate steps to advise other ceramic dealers of this ruling. We hope that this will ensure a consistent application of the department's policy in this area.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner