Tax Type
Retail Sales and Use Tax
Description
Occasional Sales; Information Services Equipment
Topic
Taxability of Persons and Transactions
Date Issued
07-31-1991
July 31, 1991
Re: Request for Ruling: Retail Sales and Use Tax
Dear*****************
This will reply to your letter of June 11, 1991 in which you request a ruling on behalf of*********(the Taxpayer) regarding the applicability of the Virginia retail sales and use tax on the sale of assets.
FACTS
The Taxpayer is a bank offering a full range of financial services to its customers. The Taxpayer entered into an agreement with a company to provide certain data processing, telecommunications, and related information technology services that the Taxpayer had previously been performing itself. Additionally, the Taxpayer sold the company certain fixed assets previously used in the processing of informational services. The bulk of the Taxpayer's services involve services not subject to the sales or use tax. However, the Taxpayer is registered as a dealer for purposes of selling checks to its customers for use in the checking account services. The Taxpayer requests a ruling on the applicability of the sales and use tax on the sale of the assets used in the processing and production of its information services.
RULING
Va. Code § 58.1-608(A)(10)(b) exempts an occasional sale from the retail sales and use tax. An "occasional sale" is defined in Va. Code § 58.1-602 as:
-
- a sale of tangible personal property not held or used by a seller in the course of an activity for which he is required to hold a certificate of registration, including the sale or exchange of all or substantially all the assets of any business and the reorganization or liquidation of any business, provided such sale or exchange is not one of a series of sales and exchanges sufficient in number, scope and character to constitute an activity requiring the holding of a certificate of registration.
In the present case, the Taxpayer is not of the business of selling its assets on a regular basis and does not hold a certificate of registration for any activity of its operation other than one for the selling of checks as a convenience for its customers.
Based on the facts presented, the Taxpayer's sale of certain fixed assets relating to its information services processing will not be subject to the tax.
If you have any further questions regarding this matter, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner