Tax Type
Retail Sales and Use Tax
Description
Materials stored in Virginia for an out-of-state construction job
Topic
Taxability of Persons and Transactions
Date Issued
08-19-1987
August 19, 1987
Re: Request for Ruling/Sales and Use Tax
Dear **********************
This will reply to your letters of May 8 and June 16, 1987, in which you request a ruling on the application of the sales and use tax to materials stored in Virginia prior to their incorporation in a bridge spanning the Potomac River between Virginia and Maryland.
§58.1-610.A of the Code of Virginia makes your corporation the taxable user or consumer of all tangible personal property purchased, used, or stored in Virginia in connection with its real estate construction contracts. As such, whenever your corporation purchases or takes delivery of tangible personal property in Virginia for use in a real. estate construction contract, the tax will be due. This includes instances in which the tangible personal property will ultimately be affixed to real estate located outside of Virginia.
The only exception to this general rule is set forth in §58.1-610.F of the Code of Virginia:
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- Personal property purchased by a contractor which is used solely in another state or foreign country, which could have been purchased by such contractor for such use free from the sales tax in such other state or in such foreign country, and which is stored temporarily in Virginia pending shipment to such state or country, shall not be subject to the sales or use tax.
- Personal property purchased by a contractor which is used solely in another state or foreign country, which could have been purchased by such contractor for such use free from the sales tax in such other state or in such foreign country, and which is stored temporarily in Virginia pending shipment to such state or country, shall not be subject to the sales or use tax.
Lastly, I would note that Virginia's combined state and local sales and use tax rate increased from 4 % to 4 1/2 % effective January 1, 1987. For your information, I have enclosed a copy of the emergency regulations promulgated by the department to implement the rate increase. In the event that your contract was entered into prior to the enactment of the rate increase, October 27, 1986, your corporation may be entitled to a refund of the additional 1/2 % tax paid on and after January 1, 1987 on materials for use in the contract. Detailed information on these refund provisions may be found in Emergency Virginia Regulation 630-10-106.
If you have any questions, please do not hesitate to contact the department.
Sincerely
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner