Tax Type
Retail Sales and Use Tax
Description
Sales for Resale; Beer Wholesalers
Topic
Taxability of Persons and Transactions
Date Issued
04-14-1992
April 14, 1992
Re: Request for Ruling: Sales and Use Tax
Dear *************
This will reply to your letter of December 10, 1991, in which you request a ruling on the records that beer wholesalers must keep to document exempt sales for resale.
General Rule
Virginia Code §58.1-623 provides that "[t]he burden of proving that a sale ... of tangible personal property is not taxable is upon the dealer unless he takes from the taxpayer a certificate to the effect that the property is exempt."
Application to Beer Wholesalers
Although exemption certificates are virtually always required to demonstrate exempt sales for resale, the laws and regulations governing beer wholesaling in Virginia in many cases make it possible for individual wholesalers to verify exempt sales without obtaining exemption certificates.
Specifically, Virginia Code §4-25 (A)(6) grants the Department of Alcoholic Beverage Control (ABC) the authority to issue licenses to beer wholesalers to:
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- acquire and receive deliveries and shipments of beer and to sell and deliver or ship the same ... to persons licensed . to sell the same at wholesale or retail for the purpose of resale, and to owners of boats registered under the laws of the United States sailing for ports of call of a foreign country or another state, and to persons outside of Virginia for resale outside of Virginia.
To the extent that a beer wholesaler sells to retailers licensed by ABC or to other licensed wholesalers, and complete and accurate records of these transactions are kept by the wholesaler, he will not be required to obtain resale exemption certificates.
Exceptions
Sales to boat owners under Virginia Code §4-25 (A) (6) may or may not be for resale. As such, beer wholesalers must either obtain an exemption certificate or collect the tax from such customers at the time of sale.
The same rule also applies to persons holding "banquet" licenses under Virginia Code §4-25 (A) (20) and any other licensee who may have the option under current or future ABC law or regulations not to resell the beer purchased from a wholesaler.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner