Tax Type
Retail Sales and Use Tax
Description
Construction equipment; Occasional sale
Topic
Exemptions
Date Issued
07-29-1988
July 29, 1988
Re: Va. Code §58.1-1821 Application/Sales and Use Tax
Dear**************
This will reply to your letter of June 13, 1988, seeking the correction of an assessment issued in the above referenced case for the period December 1984, through November 1987.
FACTS
********** ("The Taxpayer"), a highway construction contractor, contests the application of sales tax to the sale of an item of heavy equipment known as a Bros Mixer ("mixer"). The Taxpayer is also in the business of leasing radio equipment.
DETERMINATION
Virginia Code §58.1-608(15), exempts from the sales and use tax occasional sales of tangible personal property. Interpreting Va. Code §58.1-608(15), §630-10-75 of the Virginia Retail Sales and Use Tax Regulations states that:
-
- The tax does not apply to an occasional sale provided the sale or exchange is not one of a series of sales or exchanges sufficient in number, scope and character to constitute an activity requiring the holding of certificate of registration.
The term "occasional sale" means...[a] sale of tangible personal property not held or used by a seller in the course of an activity for which he is required to hold a certificate of registration. The words "not held or used by a seller in the course of registration" mean that a registered dealer is not entitled to an occasional sale exemption solely by virtue of the fact that the article sold may be of a different class from the merchandise he/she regularly sells....
- The tax does not apply to an occasional sale provided the sale or exchange is not one of a series of sales or exchanges sufficient in number, scope and character to constitute an activity requiring the holding of certificate of registration.
While the Taxpayer holds a certificate of registration for its radio leasing business, the Taxpayer contends that the mixer is not used in the course of activity for which he is required to hold a certificate of registration (radio leasing) and therefore, the sale of the mixer is an occasional sale not subject to the tax. The Department agrees and a Revised Notice of Assessment will be issued.
If I can be of further assistance, please contact the Department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner