Tax Type
Retail Sales and Use Tax
Description
Horse training
Topic
Taxability of Persons and Transactions
Date Issued
09-27-1990
September 27, 1990
Re: Request for Ruling/ Sales and Use Tax
Dear******************
This will reply to your letter of February 8, 1990, requesting a ruling on the application of the sales and use tax to charges for the training of horses.
Facts
You state that you have horses at a breeding farm which also trains horses in its training barn and on its race track located on the farm. You ask whether the charges for such training is subject to the retail sales and use tax.
Ruling
Va. Code §58.1-608(5)(a) provides an exemption from the sales and use tax for "[p]rofessional, insurance, or personal service transactions which involve sales as inconsequential elements for which no separate charges are made..."
The training of horses represents the provision of a nontaxable service. As such, the provider of such services would not collect the sales and use tax from its customers. Rather, the provider would pay the tax to its suppliers or remit the use tax directly to the department on any tangible personal property purchased in connection with providing the training services. The provider would take the amount of the tax into consideration when setting its fees to customers for the provision of its services .
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner