Tax Type
Retail Sales and Use Tax
Description
Construction equipment form another state
Topic
Property Subject to Tax
Date Issued
05-13-1982
May 13, 1982
Re: §58-1118 Application/Use Tax
Dear *****************
This will reply to your letter of September 4, 1980, and your subsequent correspondence applying for correction of use tax assessed against ********* as the result of an audit.
Facts
********* as general contractor, contracted with the Department of the **********for the construction of the at *********. As part of this contract, purchased a girder crane and monorail hoist, together with electrification for these, from********* in Pennsylvania who also installed these items in the ********* facility. ******* is not registered to collect Virginia sales or use tax.
The girder crane and monorail hoist are classified as tangible personal property, while the craneway electrification is a fixture to realty.
Determination
Virginia Code §58-441.15 provides that any person who contracts to perform construction with respect to real estate and in connection therewith to furnish tangible personal property shall be deemed to have purchased such tangible personal property for use or consumption.
§58-441.5 of the Code of Virginia imposes a tax upon the "use or consumption of tangible personal property in this State." This provision applies to purchases on which no sales tax is paid to the seller. As general contractor and purchaser of tangible personal property used in a facility located in Virginia, you are liable for either payment of the Virginia tax to your supplier at the time the property is purchased or remittance of the use tax on the property directly to the Department of Taxation.
In this situation your supplier, ************* is not registered to collect Virginia tax, and no tax is listed on their invoice to you for the overhead crane equipment. Therefore, as general contractor, you are liable for payment of the use tax on all tangible personal property involved in this contract. While the proposal for the crane, which you obtained from************* does specify 4% sales tax, the proposal has no bearing on the factual situation of this case since billing was not sent nor payment received by *********.
We find no evidence that the tax was paid on the purchase of the crane and monorail hoist and therefore find no basis for granting relief from the use tax assessed. The audit has been adjusted to remove the charge from ******** for runway electrification since this electrification represents a fixture to realty which is taxable to the installer.
You will receive a revised assessment reflecting the adjustment to the audit. Payment should be made at that time.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner