Tax Type
Retail Sales and Use Tax
Description
Nexus; Restaurant supplier
Topic
Collection of Tax
Date Issued
04-29-1986
April 29, 1986
Re: Request for Ruling/Sales and Use Tax
Dear ******************
This will reply to your letter of April 9, 1986, in which you request a ruling as to your client's liability for the collection of the Virginia sales tax from its customers.
FACTS
Your client is engaged in supplying restaurants with various food products, cleaning supplies, paper products, plates, and similar items. Your client does not maintain a place of business in Virginia and its salesmen do not enter the state to solicit business. On occasion, however, representatives of your client may enter the state in order to observe restaurant operations and receive suggestions about the products it sells. Your client makes deliveries to its customers in its own vehicles.
RULING
Section 58.1-612 of the Code of Virginia sets forth the various activities which require an out-of-state dealer to register and collect the sales tax. Under the statute, registration is required if a dealer:
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- 1. Maintains or has within this State, directly or through an agent or subsidiary, an office, warehouse, or place of business of any nature;
2. Solicits business in this State by employees, independent contractors, agents or other representatives;
3. Advertises in newspapers or other periodicals printed and published in this State, or through materials distributed in this State by means other than the United States mail; or
- 1. Maintains or has within this State, directly or through an agent or subsidiary, an office, warehouse, or place of business of any nature;
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- 4. Makes regular deliveries of tangible personal property by means other than common carrier. A person shall be deemed to be making regular deliveries hereunder if vehicles other than those operated by a common carrier enter this State more than twelve times during a calendar year to deliver goods sold by him.
- 4. Makes regular deliveries of tangible personal property by means other than common carrier. A person shall be deemed to be making regular deliveries hereunder if vehicles other than those operated by a common carrier enter this State more than twelve times during a calendar year to deliver goods sold by him.
Provided that your client is furnished with valid resale exemption certificates by its customers, food items may be purchased exclusive of the tax by restaurants. In addition, Section 630-10-64.F of the Virginia Retail Sales and Use Tax Regulations (copy enclosed) provides that "[p]aper doilies, paper placements, plastic silverware, bags and similar items furnished with meals and which are disposed of after use by only one customer are...considered a part of a meal and can be purchased exempt under a Resale Certificate of Exemption." The regulation also provides, however, that "[o]ther items purchased by a restaurant for its own use in preparing and serving meals, such as kitchen equipment, plates, glasses, silverware, tablecloths, and similar items are taxable and may not be purchased under a Certificate of Exemption.
Based upon the foregoing, restaurants may purchase food for resale and disposable items that are to be provided to customers in connection with the sale of food under resale exemption certificates. However, sales of cleaning supplies and other items will be taxable.
A sales and use tax registration form is enclosed for use by your client if necessary. In addition, your client may be subject to local business license taxes in the localities in which it conducts business and may be subject to entrance and registration fees imposed by the State Corporation Commission,
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner