90-99 | Virginia Tax

Tax Type

Retail Sales and Use Tax

Tire Tax

Description

Bus and truck tires

Topic

Taxability of Persons and Transactions

Date Issued

06-18-1990

June 12, 1990

Re: Request for Ruling: Sales and Use Tax

Dear******************

This will reply to your letter of May 1, 1990, regarding the application of the sales and use tax to tangible personal property used in the repair of elevators.

Va. Code §58.1-610 provides that:

- Any person who contracts ... to perform construction, reconstruction, installation, repair, or any other service with respect to real estate or fixtures thereon, and in connection therewith to furnish tangible personal property, shall be deemed to have purchased such tangible personal property for use or consumption. Emphasis added

As such, your company is considered to be a using or consuming contractor both when it installs elevators which become affixed to realty and when it repairs or performs maintenance on such elevators. Rather than collecting sales tax from customers on repair and maintenance transactions with respect to real estate, your company should instead pay tax at the time of purchase on the materials furnished to customers in such transactions.

I trust that this will answer the question posed in the department's recent audit.

Sincerely,

W. H. Forst
Tax Commissioner

Rulings of the Tax Commissioner