Tax Type
Retail Sales and Use Tax
Description
Contractors; Replacement windows and doors
Topic
Taxability of Persons and Transactions
Date Issued
06-14-1988
June 14, 1988
Re: Request for Ruling/Sales and Use Tax - Contractors.
Dear****************
This is in response to your letter of April 4, 1988, in which you requested a ruling on the application of sales and use tax to replacement windows and doors installed.
FACTS
****** ("The Taxpayer") installs replacement windows and doors for customers on a contractual basis.
RULING
§58.1-610(A) of the Code of Virginia sets forth the general rule that "[a]ny person who contracts...to...perform installation...or any other service with respect to real estate" is deemed to be the taxable user or consumer of any property furnished in connection with the work. As such, the contractor or subcontractor performing the installation work is liable for payment of tax on the purchase of all materials used in the construction. However, Virginia Code §58.1-610(D), sets forth an exception to this general rule:
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- Any person selling...storm windows and doors...or other like or comparable items, shall be deemed to be a retailer of such items and not a using or consuming contractor with respect to them, whether he sells to and installs such items for contractors or other customers....
Interpreting §58.1-610(D), §630-10-27(G) of the Virginia Retail Sales and Use Tax Regulations provides that "[a] person selling and installing tangible personal property that becomes real property after installation is generally considered a contractor, except that a retailer selling and installing storm windows and doors...or other like or comparable items...is not classified as a using consumer contractor with respect to them." Therefore, to fall within the exception of the general rule, the contractor must install one of the enumerated items and be considered a retailer of such items.
A storm window or door is considered tangible personal property which is an addition to the existing window or door upon the structure. The storm window or door cannot stand alone; there must be another window or door for the storm window or door to be functional and accomplish its intended purpose.
A replacement window or door is tangible personal property that is used as a substitute to the already existing door or window. A replacement window or door can stand alone; they accomplish their intended purpose without other materials. Therefore, replacement windows and doors are not "like" or "comparable" to storm windows and storm doors.
Based upon the facts provided, Taxpayer installs replacement windows and doors, not storm windows and doors, and does not fall within the exception to Virginia Code §58.1-610(A). Taxpayer should not collect the sales tax from customers. Taxpayer, as the ultimate consumer, is liable either for payment of the sales tax to the supplier/manufacturer of the replacement windows and doors or for remittance of the use tax directly to the Department of Taxation.
If I can be of further assistance, please contact me.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner