Tax Type
Retail Sales and Use Tax
Description
Rental of durable medical equipment
Topic
Taxability of Persons and Transactions
Date Issued
03-20-1985
March 20, 1985
RE: §58.1-1821 Application/Sales and Use Tax
Dear ****
This will reply to your letter of February 11, 1985 in which you submit an application for correction of sales and use tax assessed to ***** as the result of a recent audit.
You note in your letter that ***** ("Taxpayer") was advised by a departmental representative that it need not collect the sales tax on its rentals of durable medical equipment. Instead, the taxpayer remitted the tax when it initially purchased such equipment. I regret that the taxpayer may have been furnished with such erroneous information as such information clearly was in conflict with established departmental policy.
Prior to July 1, 1984, the department traditionally held that sales or leases of durable medical equipment (except purchases for resale or leasing to customers) were. subject to the sales and use tax unless specifically exempted from the tax by law. Accordingly, the assessment issued to the taxpayer was correct; however, I find basis for the removal of oxygen concentrators from the instant audit as a significant segment of Virginia's durable medical equipment dealers have relied on 1978 letter from a departmental representative in which oxygen concentrators were deemed exempt from the tax.
As the instant assessment will be revised to delete oxygen concentrators, the taxpayer's check numbered 760 is being returned with this determination. After revisions, the balance of the assessment, including tax assessed upon regulators, will be due and payable. To assist the taxpayer in the future, I have enclosed a copy of Section 630-10-63 of the Virginia Retail Sales and Use Tax Regulations which explains the statutory tax exemption provided for durable medical equipment effective July 1, 1984.
Sincerely,
W. H. Forst
Tax Commissioner
Enclosure
RE: §58.1-1821 Application/Sales and Use Tax
Dear ****
This will reply to your letter of February 11, 1985 in which you submit an application for correction of sales and use tax assessed to ***** as the result of a recent audit.
You note in your letter that ***** ("Taxpayer") was advised by a departmental representative that it need not collect the sales tax on its rentals of durable medical equipment. Instead, the taxpayer remitted the tax when it initially purchased such equipment. I regret that the taxpayer may have been furnished with such erroneous information as such information clearly was in conflict with established departmental policy.
Prior to July 1, 1984, the department traditionally held that sales or leases of durable medical equipment (except purchases for resale or leasing to customers) were. subject to the sales and use tax unless specifically exempted from the tax by law. Accordingly, the assessment issued to the taxpayer was correct; however, I find basis for the removal of oxygen concentrators from the instant audit as a significant segment of Virginia's durable medical equipment dealers have relied on 1978 letter from a departmental representative in which oxygen concentrators were deemed exempt from the tax.
As the instant assessment will be revised to delete oxygen concentrators, the taxpayer's check numbered 760 is being returned with this determination. After revisions, the balance of the assessment, including tax assessed upon regulators, will be due and payable. To assist the taxpayer in the future, I have enclosed a copy of Section 630-10-63 of the Virginia Retail Sales and Use Tax Regulations which explains the statutory tax exemption provided for durable medical equipment effective July 1, 1984.
Sincerely,
W. H. Forst
Tax Commissioner
Enclosure
Rulings of the Tax Commissioner