Tax Type
Retail Sales and Use Tax
Description
Lease and rentals; Personal property taxes
Topic
Exemptions
Date Issued
10-11-2000
October 11, 2000
Re: Request for Ruling: Retail Sales and Use Tax
Dear ****
This is in response to your letter of September 27, 2000, to a member of my Tax Policy staff, requesting a formal ruling on the application of the sales and use tax to personal property tax billings. Copies of cited sources are enclosed.
You indicate that **** (the "Taxpayer") has been charging sales tax on personal property taxes assessed in connection with the lease or rental of tangible personal property. You indicate that you have received conflicting information from the department, and ask for a final written determination on this matter.
Effective July 1, 1999, the definition of "sales price" was amended to exclude "separately stated local property taxes collected" from the application of the retail sales and use tax. See the definition of "sales price" set out in Code of Virginia § 58.1-602. Accordingly, the Taxpayer need not apply sales tax to its separately stated charges for personal property taxes.
As sales tax has been erroneously collected on personal property tax charges, such tax must be remitted to the department unless the Taxpayer can show that such tax has been refunded to the customer or credited to the customer's account. For sales tax erroneously collected and previously remitted to the department, no refund can be issued by the department to the Taxpayer, unless the Taxpayer can prove that it has refunded the erroneously collected sales tax to its customers or has credited the erroneously collected sales tax to their accounts, if the accounts are still active. See Title 23 of the Virginia Administrative Code (VAC) 10-210-340(C) and 10-210-3040.
If you should have any questions about this matter, please contact **** in the department's Office of Tax Policy at ****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/31145R
Re: Request for Ruling: Retail Sales and Use Tax
Dear ****
This is in response to your letter of September 27, 2000, to a member of my Tax Policy staff, requesting a formal ruling on the application of the sales and use tax to personal property tax billings. Copies of cited sources are enclosed.
FACTS
You indicate that **** (the "Taxpayer") has been charging sales tax on personal property taxes assessed in connection with the lease or rental of tangible personal property. You indicate that you have received conflicting information from the department, and ask for a final written determination on this matter.
RULING
Effective July 1, 1999, the definition of "sales price" was amended to exclude "separately stated local property taxes collected" from the application of the retail sales and use tax. See the definition of "sales price" set out in Code of Virginia § 58.1-602. Accordingly, the Taxpayer need not apply sales tax to its separately stated charges for personal property taxes.
As sales tax has been erroneously collected on personal property tax charges, such tax must be remitted to the department unless the Taxpayer can show that such tax has been refunded to the customer or credited to the customer's account. For sales tax erroneously collected and previously remitted to the department, no refund can be issued by the department to the Taxpayer, unless the Taxpayer can prove that it has refunded the erroneously collected sales tax to its customers or has credited the erroneously collected sales tax to their accounts, if the accounts are still active. See Title 23 of the Virginia Administrative Code (VAC) 10-210-340(C) and 10-210-3040.
If you should have any questions about this matter, please contact **** in the department's Office of Tax Policy at ****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/31145R
Rulings of the Tax Commissioner