Tax Type
Retail Sales and Use Tax
Description
Sales of Dietary Supplements
Topic
Exemptions
Property Subject to Tax
Date Issued
07-30-1991
July 30, 1991
Re: § 58.1-1821 Application: Sales and Use Tax
Dear********************
This will reply to your letter of March 21, 1991 in which you seek reconsideration of the department's February 21, 1991 determination denying correction of a recent sales and use tax assessment of your client, the **************(the "Taxpayer").
You contend that the Taxpayer's sales of its dietary supplements do not constitute "retail sales" as they are sales for resale to physicians. As P.D. 90-61, enclosed with the February 21, 1991 determination and herein, indicates, physicians purchasing weight loss supplements to be provided as part of a weight loss program are considered the users and consumers of all items purchased for use in providing weight management services, including supplements. They, thus, are required to pay the tax to their suppliers at the time of making such purchases.
You maintain that when physicians resell the Taxpayer's products, the charges for such are separately stated and that the products constitute the essence of the patients' relationship with the physicians. Any services offered to the consumer are merely ancillary to the sale of the product and to ensure that the consumer does not have an adverse reaction to the product. However, information to the contrary was provided by the auditor.
In addition, had the Taxpayer been selling products for resale, it would have had on file, and the auditor would have picked up, resale exemption certificates (with registration numbers) from the physicians reselling the products.
Accordingly, I find no basis for revising my original determination, unless the Taxpayer can provide documentation supporting its contentions. Such information should be remitted to the department at the following address within 45 days of the date of this letter: Department of Taxation, office Services Division, Technical Services Section, P. O. Box 6-L, Richmond, Virginia 23282.
If you continue to desire a meeting in light of my second denial of a refund to the Taxpayer, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner