Document Number
21-157
Tax Type
Retail Sales and Use Tax
Description
True Object Test, Art on Canvas
Topic
Appeals
Date Issued
12-29-2021

December 28, 2021

Re:  Request for Ruling:  Retail Sales and Use Tax

Dear *****:

This is in response to your letter submitted on behalf of ***** (the “Taxpayer”) requesting a ruling on the application of the retail sales and use tax to mural work installed in a refurbished train station. I apologize for the delay in responding to your correspondence.

FACTS

The Taxpayer is an artist specializing in framed works and murals and seeks a ruling on the taxability of a mural painted for a train station. The mural in question was painted on three separate canvasses and installed into the subframe of the train station upon completion. 

RULING

When determining whether a transaction involving both the sale of tangible personal property and the provision of a service represents a sale of tangible personal property or an exempt service, the "true object" test is used. Title 23 of the Virginia Administrative Code 10-210-4040 D states that "[i]f the object of the transaction is to secure a service and the tangible personal property which is transferred to the customer is not critical to the transaction, then the transaction may constitute an exempt service. However, if the object of the transaction is to secure the property which it produces, then the entire charge, including the charge for any services provided, is taxable."

In the present case, the "true object" of the transactions between the Taxpayer and its customer (the train station) must be determined. Based on the information provided, the mural work would be of no value to the customer without the transfer of the canvasses that will be installed in the subframe. Therefore, based on the above regulation, the entire charge for the mural work, including the services rendered in creating the work, would be subject to the Virginia retail sales and use tax. 

I hope the foregoing will respond to your inquiry. 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 regulation cited is available on-line at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department’s web site. If you have any questions about this response, you may contact ***** in the Department’s Office of Tax Policy, Appeals and Rulings, at *****. 

Sincerely,

 

Craig M. Burns
Tax Commissioner

AR/2140L

Rulings of the Tax Commissioner

Last Updated 01/18/2022 07:56