July 6, 2023
Re: Retail Sates & Use Tax: Request for Ruling
Dear *****:
This letter is in reply to your request for a ruling on behalf of ***** (the “Taxpayer”), regarding the application of the Virginia Disposable Plastic Bag Tax to the Taxpayer’s sales at federal military installations located in Virginia. I apologize for the delay in responding to your request.
FACTS
The Taxpayer is a non-profit corporation located in Virginia under contract with the Department for the Blind and Vision Impaired (the “DBVI”) to provide assistance in the daily management of vending facilities under the Business Enterprise Program, pursuant to the Randolph-Sheppard Act, 20 U S C § 107 et seq. This Act provides qualified blind persons the opportunity to operate businesses on federal property. The Taxpayer operates facilities at Fort Belvoir, Virginia, a U.S. Army post located within Fairfax County, Virginia. The Taxpayer requests a ruling as to whether its operations at Fort Belvoir must collect and remit the Virginia Disposable Plastic Bag Tax.
RULING
Virginia Code § 58.1-1 745 permits any county or city in Virginia to adopt an ordinance imposing a tax in the amount of five cents for each disposable plastic bag provided, whether free of charge or not, to a consumer of tangible personal property by retailers in grocery stores, convenience stores, or drugstores. Fairfax County, Virginia, adopted the Virginia Disposable Plastic Bag Tax under Virginia Code § 58.1-1745, effective January 1, 2022.
Generally, Title 4 U.S.C. § 1D5 permits a state to levy sales and use tax within a federal area. Virginia Code § 58.1-1745 states the Virginia Disposable Plastic Bag Tax shall be collected by retailers in grocery stores, convenience stores, and drugstores from the consumer along with the purchase price and all other fees and taxes.
Virginia Code § 58.1-1746 does not provide a specific exemption for the Taxpayer from the Virginia Disposable Plastic Bag Tax. Virginia Code § 51.5-98 B exempts vending stands and other business enterprises operated by blind or vision impaired persons under the jurisdiction of the DBVI from the Virginia retail sales tax and local meals tax if the stand or business is located on U.S. military or naval property with a post exchange or tax exempt concession. Virginia Code § 51.5-98 C states “[n]othing in this section shall be construed to relieve any blind person operating vending stands or other business enterprises under the jurisdiction of the Department [DBVI] from the imposition of (i) local income taxes, (N) state income taxes or (iii) other taxes imposed that are unrelated to the operation of such vending stands or other business enterprises.” The Virginia Disposable Plastic Bag Tax meets the description of the “other taxes” stated in Virginia Code § 51.5-98 C.
In accordance with Virginia Code § 58.1-1745 and 51.5-98 C, the Taxpayer must collect and remit the Virginia Disposable Plastic Bag Tax if operating a grocery store, convenience store, or drugstore on the U.S Army post Fort Belvoir, Virginia. Any vending stand or other business enterprise operated by a blind or vision impaired person under the jurisdiction of the DBVI that is not a grocery store, convenience store, or drugstore on Fort Belvoir, Virginia is not required to collect and remit the Virginia Disposable Plastic Bag Tax.
This ruling is based on the facts presented as summarized above. Any change in facts or the introduction of new facts may lead to a different result.
The of Code of Virginia sections cited are available on-line at www.tax.virginia.gov in the Laws, Rules & Decisions section of the Department’s web site. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/4074.W