Tax Type
Retail Sales and Use Tax
Description
Delivery charges
Topic
Taxability of Persons and Transactions
Date Issued
09-03-1985
September 3, 1985
Dear ****
This will reply to your letter of August 5, 1985, requesting a ruling on the correct application of the sales and use tax to the following transaction.
FACTS
Taxpayer's franchisees operate pizza restaurants in Virginia. In connection with such restaurants, some of its franchisees are about to begin home delivery of pizzas and are considering the possibility of adding a delivery charge to such home delivered pizzas. Taxpayer seeks a ruling on whether such delivery charges would be subject to Virginia sales and use tax.
RULING
§58.1-603 of the Virginia Code imposes a sales tax on the "gross sales price of each item or article of tangible personal property when sold at retail or distributed in this state.' § 58.1-602(17) of the Code provides however that "Sales Price' "shall not include . . . transportation charges separately stated.'
§630-10-107 of the Virginia Sales and Use Tax Regulations, a copy of which is hereby enclosed , also provides that, "The tax does not apply to transportation or delivery charges added to a taxable sale provided such transportation charges are separately stated on the invoice to the customer.' Conversely, the regulation states, "If the transportation or delivery charges are not separately stated on the invoice, they will become part of the sales price of the property and will be subject to the tax.'
Therefore, so long as Taxpayer's franchisees separate the delivery charges from the sales price of their products in their records and on their invoices to customers, such delivery charges will not be subject to the tax.
I hope this has answered your questions, but please let me know if I can be of further assistance.
W. H. Forst
Tax Commissioner
Dear ****
This will reply to your letter of August 5, 1985, requesting a ruling on the correct application of the sales and use tax to the following transaction.
FACTS
Taxpayer's franchisees operate pizza restaurants in Virginia. In connection with such restaurants, some of its franchisees are about to begin home delivery of pizzas and are considering the possibility of adding a delivery charge to such home delivered pizzas. Taxpayer seeks a ruling on whether such delivery charges would be subject to Virginia sales and use tax.
RULING
§58.1-603 of the Virginia Code imposes a sales tax on the "gross sales price of each item or article of tangible personal property when sold at retail or distributed in this state.' § 58.1-602(17) of the Code provides however that "Sales Price' "shall not include . . . transportation charges separately stated.'
§630-10-107 of the Virginia Sales and Use Tax Regulations, a copy of which is hereby enclosed , also provides that, "The tax does not apply to transportation or delivery charges added to a taxable sale provided such transportation charges are separately stated on the invoice to the customer.' Conversely, the regulation states, "If the transportation or delivery charges are not separately stated on the invoice, they will become part of the sales price of the property and will be subject to the tax.'
Therefore, so long as Taxpayer's franchisees separate the delivery charges from the sales price of their products in their records and on their invoices to customers, such delivery charges will not be subject to the tax.
I hope this has answered your questions, but please let me know if I can be of further assistance.
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner