Tax Type
Retail Sales and Use Tax
Description
Collection of tax by confectionery products manufacturer
Topic
Taxability of Persons and Transactions
Date Issued
11-07-1989
November 7, 1989
Re: Ruling Request / Sales and Use Tax
Dear*****************
This is in response to your letter dated August 9, 1989 in which you requested clarification of Virginia sales and use tax regulations as they apply to your company.
FACTS
The taxpayer is a manufacturer of confectionery products purchased for resale by fund raising organizations such as schools, churches and youth organizations. Non-confectionery items (i.e. gift wrap) are purchased from vendors.
The taxpayer is requesting the following information:
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- 1. Whether the taxpayer is responsible for the payment of sales and use taxes on any of its products.
2. If the collection and payment of taxes is the responsibility of the fund raising organization, what documentation, if any, the taxpayer is required to obtain from the organization.
3. Sales tax rates.
- 1. Whether the taxpayer is responsible for the payment of sales and use taxes on any of its products.
RULING
Items purchased for resale are exempt from Virginia sales and use tax. The resale exemption extends to any tangible personal property that will pass to the ultimate purchaser, including product packaging materials. The taxpayer, however, will be relieved of its responsibility to collect and pay sales tax only if the purchaser provides a resale exemption certificate (Form ST-10).
Also, under Va. Code §58.1-608(4)(h) the tax will not apply to certain fund raising activities of elementary and secondary schools. A recent ruling setting forth the application of the tax to these sales is enclosed.
A uniform sales tax rate of 4.5% (3.5%-state and 1%-local) is administered statewide.
I hope the foregoing information has answered your questions. However, please contact the department if you need additional information.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner