Tax Type
Retail Sales and Use Tax
Description
Vending Machine Sales.
Topic
Returns/Payments/Records
Date Issued
03-04-1985
March 4, 1985
Dear*****
This will reply to your letter of December 18, 1984, in which you request permission to report the sales tax on vending machine sales based on an alternative method involving a percentage of gross receipts.
The Department of Taxation is aware that not all dealers are able to maintain satisfactory records to determine the cost of wholesale purchases. Virginia Code Section 58.1-614 and Virginia Sales and Use Tax Regulation Section 630-10-110 provide that the Tax Commissioner may authorize dealers who are unable to maintain satisfactory records to compute the tax via an alternative method. This alternative method requires that total gross receipts be divided by 1.04 to determine the tax base, and that this base be multiplied by .04 to determine the tax due. The alternative method that you propose to use differs from this approved alternative substantially.
Inasmuch as we have recognized the difficulty some dealers may have in determining a cost figure and have provided an alternative method for computing the sales tax, we cannot authorize any additional computational variations.
Therefore, in the instant case, I cannot agree to a tax base computation in the manner which you set forth. The facts which you have presented are sufficient to allow you to use the approved alternative method of computation based upon a tax rate of four percent upon a tax base of total gross receipts. Should you wish to utilize this reporting method, please advise me, and I will issue the appropriate authorization. Otherwise, you must report the five percent tax on the actual wholesale purchases of the property sold through vending machines.
Dear*****
This will reply to your letter of December 18, 1984, in which you request permission to report the sales tax on vending machine sales based on an alternative method involving a percentage of gross receipts.
The Department of Taxation is aware that not all dealers are able to maintain satisfactory records to determine the cost of wholesale purchases. Virginia Code Section 58.1-614 and Virginia Sales and Use Tax Regulation Section 630-10-110 provide that the Tax Commissioner may authorize dealers who are unable to maintain satisfactory records to compute the tax via an alternative method. This alternative method requires that total gross receipts be divided by 1.04 to determine the tax base, and that this base be multiplied by .04 to determine the tax due. The alternative method that you propose to use differs from this approved alternative substantially.
Inasmuch as we have recognized the difficulty some dealers may have in determining a cost figure and have provided an alternative method for computing the sales tax, we cannot authorize any additional computational variations.
Therefore, in the instant case, I cannot agree to a tax base computation in the manner which you set forth. The facts which you have presented are sufficient to allow you to use the approved alternative method of computation based upon a tax rate of four percent upon a tax base of total gross receipts. Should you wish to utilize this reporting method, please advise me, and I will issue the appropriate authorization. Otherwise, you must report the five percent tax on the actual wholesale purchases of the property sold through vending machines.
Rulings of the Tax Commissioner