Tax Type
Retail Sales and Use Tax
Description
Federal excise tax
Topic
Taxability of Persons and Transactions
Date Issued
12-07-1988
December 7, 1988
Re: Request for Ruling: Sales and Use Tax
Dear*****************
This will reply to your letter of November 17, 1988, in which you request a ruling on whether federal retailers' excise taxes are excluded from the base for computing the Virginia sales and use tax.
§58.1-603 of the Code of Virginia imposes the sales tax upon the gross sales price or each item of tangible personal property sold in Virginia. However, Virginia Code §68.1-602.5 excludes from gross sales "the federal retailers' excise tax ... if the excise tax is billed to the purchaser separately from the selling price or the article." This statute does not provide an exclusion, however, for federal manufacturers' excise taxes (except for the federal diesel fuel excise tax).
Based upon the above statute, the federal retailers' excise tax need not be included in the base for computing the Virginia sales tax, provided that the excise tax is separately listed on the invoice or other record of the sale.
Based upon my review or Virginia Code §58.1-2401, federal retailers' excise taxes apparently are not excluded from the definition or "sale price" for purposes or the motor vehicle sales and use tax. Rather, the statute excludes only federal manufacturers' excise taxes. However, the motor vehicle sales and use tax is administered by the Department of Motor Vehicles and you may wish to contact that agency at P.O.Box 27412, Richmond, Virginia 23269 for verification of its policy in this regard.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner