Tax Type
Retail Sales and Use Tax
Description
The fuels exemption does not apply to the Taxpayer's sale of corn for home fuel
Topic
Exemptions
Date Issued
10-17-2007
October 17, 2007
Re: Request for Ruling: Retail Sales and Use Tax
Dear *****:
This is in response to your letter submitted on behalf of ***** (the "Taxpayer"), in which you request a ruling on the application of the retail sales and use tax to the sale of corn, wheat, barley and rye to individuals for domestic consumption in home heating. I apologize for the delay in responding to your correspondence.
FACTS
The Taxpayer is a retailer of farm supplies. The Taxpayer's customers are requesting to purchase corn (typically packaged and sold as feed for animals) exempt of the tax. The customers are purchasing the corn to be burned as a fuel source in a corn-burning stove. The heat generated by burning the corn serves as a heat source for the customers' homes. The corn-burning stove functions similarly to a wood-burning stove. Because wheat, barley and rye can also be used as a fuel source for home heating, the Taxpayer requests that this ruling also address those products.
RULING
Virginia Code § 58.1-609.10 1 provides that the retail sales and use tax does not apply to:
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- Artificial or propane gas, firewood, coal or home heating oil used for domestic consumption. Domestic consumption means the use of artificial or propane gas, firewood, coal or home heating oil by an individual purchaser for other than business, commercial or industrial purposes. The Tax Commissioner shall establish by regulation a system for use by dealers in classifying individual purchases for domestic or nondomestic use based on the principal usage of such gas, wood, coal or oil.
Title 23 of the Virginia Administrative Code (VAC) 10-210-630 further defines the types of fuels used for domestic consumption that are covered by the exemption.
The Virginia courts have consistently required strict construction of tax exemptions. Based on principles established by the courts, Title 23 VAC 10-210-540 provides that exemptions from the retail sales and use tax are strictly construed, i.e., where there is any doubt as to the application of an exemption, the doubt is resolved against the one claiming the exemption.
The statutory language and the regulation very specifically state the types of fuels that are subject to the exemption and do not provide for the exemption to apply to other products used as fuel for home heating purposes. Accordingly, the exemption that applies to fuels for domestic consumption does not apply to the Taxpayer's sale of corn, wheat, barley and rye to its customers for home fuel consumption.
The determination of the Tax Commissioner in Public Document 95-141 (6/2/95), cited in your letter, does not apply in this instance. The pellets that qualified for exemption in that case were derived from wood, which is listed in the statute as a fuel qualifying for the exemption.
You should note that 2007 House Bill 1640 (Chapter 84, 2007 Acts of Assembly) provides an exemption from the retail sales and use tax for multifuel heating stoves purchased for use in heating an individual's residence. A multifuel heating stove is a stove capable of burning a wide variety of alternative fuels, including, but not limited to, shelled corn, wood pellets, cherry pits and olive pits. The exemption, which became effective July 1, 2007 and expires July 1, 2012, applies to qualifying heating stoves but not to the alternative fuels used in such stoves. See Va. Code § 58.1-609.10 18.
This response is based on the facts provided as summarized above. Any change in facts or the introduction of new facts may lead to a different result.
The Code of Virginia section, regulations and public document cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site. If you have any questions about this response, you may contact ***** in the Department's Office of Policy and Administration, Appeals and Rulings, at *****.
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- Sincerely,
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- Janie E. Bowen
Tax Commissioner
- Janie E. Bowen
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AR/1-1055135870P
Rulings of the Tax Commissioner