Document Number
08-196
Tax Type
Retail Sales and Use Tax
Description
Electronic music, sold via the Internet, shower chair as durable medical equipment are statutorily exempt sales
Topic
Durable Medical Equipment Exemption
Exemptions
Internet Sales
Date Issued
12-19-2008


December 19, 2008


Re: § 58.1-1821 Application: Retail Sales and Use Tax

Dear *****:

This is in response to your letter submitted on behalf of ***** (the "Taxpayer") in which you seek correction of the retail sales and use tax assessment issued for the period February 2004 through January 2007.

FACTS


The Taxpayer operates as a seller of products via the Internet. Relying on Va. Code § 58.1-609.5 1, the Taxpayer contends that sales of electronic music, sold via the Internet, are statutorily exempt sales that are incorrectly assessed tax in the audit. Relying on Va. Code § 58.1-609.10 10, the Taxpayer further contends that the sale of a shower chair as durable medical equipment is statutorily exempt from the retail sales and use tax as well.

DETERMINATION


Downloaded Music

Virginia Code § 58.1-609.5 1 provides that the retail sales and use tax does not apply to "... services not involving an exchange of tangible personal property which provide access to or use the Internet and any other related electronic communication service, including software, data, content and other information services delivered via the Internet."

Pursuant to Public Document (P.D.) 08-43 (4/17/08), music downloaded via the Internet constitutes a nontaxable service transaction. In this instance, the Taxpayer has provided documentation demonstrating that the sales at issue are for music downloaded to its customers via the Internet. Pursuant to Va. Code § 58.1-609.5 1, and consistent with P. D. 08-43, these transactions were properly made exempt of the tax. Accordingly, these transactions will be removed from the audit assessment.

Durable Medical Equipment

Virginia Code § 58.1-609.10 10 provides, in pertinent part, that the retail sales and use tax does not apply to "... other durable medical equipment and devices..., when such items or parts are purchased by or on behalf of an individual for use by such individual. Durable medical equipment is equipment that (i) can withstand repeated use, (ii) is primarily and customarily used to serve a medical purpose, (iii) generally is not useful to a person in the absence of illness or injury, and (iv) is appropriate for use in the home."

Pursuant to Title 23 of the Virginia Administrative Code 10-210-940 F, shower seating is an example of durable medical equipment that is exempt of the tax. The documentation provided with respect to this sale indicates that the shower chair was sold to an individual. Based on the statute and regulation the shower chair may be sold exempt of the tax as durable medical equipment. Therefore, this transaction was properly made exempt of the tax and will be removed from the audit assessment.

CONCLUSION


The audit will be returned to the audit staff and adjusted based on this determination. Once the adjustments have been made, the Taxpayer will receive a revised bill with interest accrued to date. No additional interest will accrue provided the outstanding assessment is paid within thirty days of the date of the bill.

The Code of Virginia sections, regulation and public document cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's website. If you have any questions about this determination, you may contact ***** in the Department's Office of Tax Policy, Appeals and Rulings, at *****.
                • Sincerely,

                • Janie E. Bowen
                  Tax Commissioner



AR/1-2739931718.P


Rulings of the Tax Commissioner

Last Updated 08/25/2014 16:46