Tax Type
Retail Sales and Use Tax
Description
Dried bone service fee
Topic
Taxability of Persons and Transactions
Date Issued
03-24-1989
March 24, 1989
Dear ***************
This will reply to your letter dated January 17, 1989 in which you seek the correction of sales and use tax assessed * * * as the result of a result of a recent audit.
FACTS
* *********** ("The Taxpayer") was held liable for sales and use tax on various untaxed purchases as the result of an audit for the period August 1985 through July 1988. The Taxpayer is in agreement with the audit findings except for the tax assessed on charges made by the *** * * for freeze dried bone for human transplantation. The Taxpayer contends that the * ** * is not selling human tissue and organs, but charges a service fee based on the costs of recovering, processing, and distributing these items.
DETERMINATION
The sale or purchase of any natural body part is prohibited under Virginia Code § 32.1-289.1. However, this section does provide for there reimbursement of expenses associated with the removal and preservation of any natural body part for medical and scientific purposes.
The ******** * * has attested to the fact that the organs and tissues it receives are donated by the family of the deceased and never purchased or sold. The fees charged for the tissue are strictly a service charge for preparing the donated tissue for human transplantation.
Based on the foregoing, I must conclude that the charge made by the * ***** * in this case represent nontaxable service charges. The service fees attributable to the ********** * * will be removed from the audit and the assessment will adjusted accordingly.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner