Tax Type
Motor Vehicle Fuel Sales Tax
Description
Fuel sales through cardlock system
Topic
Collection of Tax
Date Issued
02-26-1987
February 26, 1987
Re: Request for Ruling/Motor Vehicle Fuel Sales Tax
Dear*********************
This will reply to your letter of July 16, 1986, in which you request a ruling on the application of Virginia fuel taxes to sales of motor fuel made through your client's cardlock system.
First, I would like to note that this ruling will discuss the application of the motor vehicle fuel sales tax only inasmuch as all other Virginia motor fuel taxes are administered by the Department of Motor Vehicles. The motor vehicle fuel sales tax at present is imposed in only two transportation districts in Virginia, which encompass the cities of Alexandria, Fairfax, Falls Church, and Manassas, and the counties of Arlington, Fairfax, Prince William, and Stafford.
As described in your letter, a series of motor fuel dealers nationwide are linked through a computerized system that will allow each dealer's customers to obtain fuel through the use of a special card from any dealer in the system. Regardless of where a cardholder obtains fuel, the payment for the transaction will be billed and collected by the "home" dealer of the cardholder. Thus, a cardholder from Virginia would be billed by his hometown dealer even though he obtained fuel from a location in another state.
In reviewing the application of the motor vehicle fuel sales tax to this situation, it is important to note that the tax is administered in the same manner as the retail sales and use tax. Therefore, any retail sale of motor vehicle fuel within the above listed localities is subject to the tax, unless specifically exempted from the tax by virtue of §58.1-608 of the Code of Virginia. This principle applies regardless of whether the sale will be credited to a Virginia or a non-Virginia dealer under the cardlock system.
As such, procedures will be necessary to guarantee the collection of the tax, based on the retail sales price of the fuel, from all cardholders who obtain fuel from Virginia sites within the system. Based on the information you have furnished, the Virginia dealer from whose location cardholders obtain fuel is the party responsible for the collection and payment of the tax. Thus, out-of-state dealers to whom sales are credited and the clearing house that serves the member dealers would not be required to register for collection of the tax. of course, out-of-state dealers will need to bill the retail sales tax to their customers and the tax will need to be transmitted to the Virginia dealer from whom fuel was obtained.
For your information. I have enclosed a copy of the Motor Vehicle Fuel Sales Tax Regulations. It should be noted, however, that these regulations have not been updated to account for the imposition of the tax in the Potomac and Rappahannock Transportation District, which consists of the city of Manassas and the counties of Prince William and Stafford.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner