Tax Type
Retail Sales and Use Tax
Description
Sales for Resale; Motor Oil Used in Maintenance of Rental Vehicles
Topic
Taxability of Persons and Transactions
Date Issued
02-15-1991
February 15, 1991
Re: Request for Ruling: Retail Sales and Use Tax
Dear********************
This will reply to your letter of ********* in which you request a ruling on behalf of********* (the Taxpayer) regarding the applicability of the Virginia retail sales and use tax on various activities dealing with the rental or leasing of vehicles.
Generally, sales, leases and rentals of motor vehicles and the charges relating to these transactions are not subject to the Virginia retail sales and use tax provided they are subject to the Virginia motor vehicle sales and use tax administered by the Virginia Department of Motor Vehicles. I am referring your letter to the Virginia Department of Motor Vehicles for a response to your questions except the query on the purchase of motor oil.
FACTS
The Taxpayer purchases motor oil from private vendors to be used in the maintenance of rental cars. The motor oil becomes a component part of the car. The oil is currently purchased under a Resale Exemption Certificate. The Taxpayer requests a ruling on whether the current procedure of purchasing the oil under a resale certificate is valid.
RULING
Virginia Regulation (VR) 630-10-67(C) (copy enclosed) provides that repair and replacement parts, accessories and oil and grease installed in a motor vehicle before or at the time of sale, lease, or rental are exempt from the tax if the cost is included in measuring the sales, lease or rental price of the car. If the Taxpayer includes the cost of the oil in the computation of the lease or rental price of the vehicle, the oil may be purchased under a Resale Exemption Certificate.
If you have any questions regarding this matter, please contact the department.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner