Tax Type
Retail Sales and Use Tax
Description
March 12, 1966 Cut-Off Date for Taxability of Contracts.
Topic
Taxability of Persons and Transactions
Date Issued
12-13-1966
This will acknowledge receipt of your letter of November 30, relating to the imposition of the sales tax which has been demanded by the Winebarger Corporation upon the sale of furniture to the St. Paul's Methodist Church. Whether or not the tax should be imposed depends upon the date of contract of the purchase and, if such date is prior to March 12, 1966, the date of delivery of the property. It appears from the copy of your letter of November 16, to the Department of Taxation that the property involved consists of church pews and chancel furniture and that the order for this property was finally placed on March 29, 1966, at which time a down payment of $2500 was made. It was contemplated that delivery would be made the last of August or the first of September of this year, but due to delays delivery had not been made on November 16. However, the critical date in determining tax liability is the time the contract was entered into.
Section 58-441.6(b) of the Code provides for an exemption of "Tangible personal property delivered pursuant to bona fide written contracts entered into before the date of the enactment of this chapter, provided delivery is made within ninety days after June twenty-seven, nineteen hundred sixty-six; . . .'
The statute in question was enacted on March 12, 1966, but the contract was not entered into until subsequent to that date. It would seem, therefore, that the exemption would not apply and that the seller is required under the statute to account for the State and local sales tax.
With respect to the advanced payment of $2500 made in April, 1966, I cannot find anything in the statute to justify your suggestion that this amount would not be subject to the tax.
I can sympathize with your situation, but we see no escape from the above interpretation of the law as passed by the General Assembly.
Attorney General's Opinion