Tax Type
Retail Sales and Use Tax
Description
BLOOMINGDALE'S, INC., v VIRGINIA DEPARTMENT OF TAXATION
Topic
Court Case
Date Issued
08-09-2007
VIRGINIA:
IN THE CIRCUIT COURT FOR THE CITY OF RICHMOND
John Marshall Courts Building
BLOOMINGDALE'S, INC., )
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VIRGINIA DEPARTMENT OF TAXATION, )
an agency of the Commonwealth of Virginia, )
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ORDER
This matter came to be tried before this Court on July 11, 2006. Upon consideration of the witness testimony, exhibits, argument of counsel and briefs filed, for the reasons stated in the Court's letter opinion of July 12, 2007, it is hereby ORDERED as follows:
1. Defendant Virginia Department of Taxation's Assessment against Applicant Bloomingdale's, Inc. for the period January 1, 1998 through December 31, 2001 is hereby declared erroneous because it is based on collecting sales tax on interstate commerce transactions not occurring in Virginia in which the merchandise either (i) never entered Virginia or (ii) was delivered outside of Virginia, with risk of loss passing outside Virginia, for use or consumption outside of Virginia; and
2. Specifically, the following sample transactions reflected as Plaintiff's Exhibit 1 and Plaintiff's Exhibit 5 were not subject to Virginia sales tax, for the following reasons:
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- Transaction #43 The merchandise in this transaction was delivered to a recipient in the District of Columbia, with sales/use tax remitted by Bloomingdale's, Inc. to the District of Columbia. Payment for the goods was made in cash in Virginia, but the goods were shipped directly from a warehouse outside Virginia to a recipient outside Virginia. Risk of loss remained with Bloomingdale's, Inc. until delivery in the District of Columbia. There was no transfer of title or possession in the Commonwealth of Virginia. The transaction is not taxable under Virginia Code § 58.1-603, and is exempt under Virginia Code § 58.1-609.10(4).
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- Transaction #45: The merchandise in this transaction was delivered to a recipient in New York, with sales/use tax remitted by Bloomingdale's, Inc. to New York. The goods were paid for by credit card by a person who was not at the point of sale at the time of payment but who had a Virginia telephone number. The goods were shipped from Virginia and delivered to a recipient outside Virginia. Risk of loss remained with Bloomingdale's, Inc. until delivery in New York. There was no transfer of title or possession in the Commonwealth of Virginia. The transaction is not taxable under Virginia Code § 58.1-603, and is exempt under Virginia Code § 58.1-609.10(4).
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- Transaction #58: The merchandise in this transaction was delivered to a recipient in North Carolina. No sales/use tax was collected or remitted by Bloomingdale's, Inc. which is not registered to collect sales/use taxes in that state. The goods were paid for by credit card by a Virginia business which was not represented at the point of sale at the time of payment but which had a Virginia telephone number. The goods were shipped from Virginia and delivered outside Virginia. Risk of loss remained with Bloomingdale's, Inc. until delivery in North Carolina. There was no transfer of title or possession in the Commonwealth of Virginia. The transaction is not taxable under Virginia Code § 58.1-603, and is exempt under Virginia Code § 58.1-609.10(4).
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- Transaction #59: The merchandise in this transaction was delivered to a recipient in Florida, with Florida sales/use tax remitted by Bloomingdale's, Inc. to Florida. The goods were paid for by credit card by a person who was not at the point of sale at the time of payment but who had a Virginia telephone number. The customer paid for the goods in Virginia, and the goods were shipped from Virginia and delivered to a recipient outside Virginia. Risk of loss remained with Bloomingdale's, Inc. until delivery in Florida. There was no transfer of title or possession in the Commonwealth of Virginia. The transaction is not taxable under Virginia Code § 58.1-603, and is exempt under Virginia Code § 58.1.-609,10(4).
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- Transaction #60: The merchandise in this transaction was delivered to a recipient in Massachusetts, with sales/use tax remitted by Bloomingdale's, Inc. to Massachusetts. Payment for the goods was made by credit card by a person who was present at the point of sale at the time of payment. The goods were shipped from Virginia and delivered to a recipient outside Virginia. Risk of loss remained with Bloomingdale's, Inc. until delivery in Massachusetts. There was no transfer of title or possession in the Commonwealth of Virginia. The transaction is not taxable under Virginia Code § 58.1-603, and is exempt under Virginia Code § 58.1.-1609.10(4).
3. Defendant Virginia Department of Taxation's Assessment against Applicant Bloomingdale's, Inc. for the period January 1, 1998 through December 31, 2001 is hereby corrected to reflect that no Virginia sales or use tax is due related to goods (i) never entering the Commonwealth of Virginia or (ii) delivered to out of state recipients, whether the recipient is the purchaser of the goods or another person. ENTER this 7 day of August, 2007.
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Judge
Seen:
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William L. S. Rowe (VSB No. 13728)
Mark C. Van Deusen (VSB No. 43673)
Eric H. Feiler (VSB No. 44048)
HUNTON & WILLIAMS LLP
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
phone: (804) 788-8410
fax: (804) 788-8218
Counsel for Applicant Bloomingdale's, Inc.
Seen and Objected To:
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Flora T. Hezel (VSB No. 47482)
Office of the Attorney General
900 East Main Street
Richmond, Virginia 23219
phone: (804) 786-8816
fax: (804) 786-1904
Counsel for Defendant Virginia Department of Taxation
A Copy,
Teste: BEVILL M. DEAN, CLERK
BY: _____________________D.C.
Rulings of the Tax Commissioner