Tax Type
Retail Sales and Use Tax
Description
Third party gifts purchased in Virginia
Topic
Taxability of Persons and Transactions
Date Issued
04-10-1989
April 10, 1989
Re: Ruling Request/ Sales and Use Tax
Dear***************
This will reply to your letters of December 22, 1988 and January 25, 1989 concerning the application of the sales and use tax to your purchase of a gift from a Virginia retailer using a credit card from outside the state.
FACTS
From your Maryland residence, you recently placed an order by telephone with a Virginia retailer for a gift to be shipped directly to your son located in a third state. The total charge for the gift, including sales tax and shipping charges was paid for by credit card. You contend that no sales tax should be due on the above transaction since you never came into Virginia to place the order or physically take delivery of the item purchased. Therefore, you ask whether the sales tax was appropriately charged on this gift purchase.
RULING
Virginia Code §58.1 -608(20) exempts from the sales and use tax, the "[d]elivery of tangible personal property outside the Commonwealth for use or consumption outside of the Commonwealth." However, Virginia Retail Sales and Use Tax Regulation (VR) 630-10-51, (copy enclosed), provides that, "a sale in interstate or foreign commerce occurs only when title or possession to the property being sold passes to the purchaser outside of Virginia and no use of the property is made within Virginia." (Emphasis added)
The gift purchase in this case did not meet the criteria for exemption stated above, since title to the property being sold did not pass to you, the purchaser, outside of Virginia. When you instructed the Virginia retailer to ship the gift to your son located in another state, you made a use of the property in Virginia, sufficient to subject the purchase to Virginia sales and use taxation. Therefore, you were properly charged Virginia sales tax on your gift purchase. See also, VR 630- 10-44.1, regarding gift purchases, enclosed.
I hope that this has responded to your question, but let us know if you have any further questions.
Sincerely.
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner