Tax Type
Retail Sales and Use Tax
Description
Out-of-state mail order business
Topic
Collection of Tax
Taxability of Persons and Transactions
Date Issued
05-22-1989
May 22, 1989
Re: Request for Ruling: Sales and Use Tax
Dear***********
This will reply to your letter of March 27, 1989, in which you requested a ruling on the application of the sales and use tax to your business.
FACTS
*********("The Taxpayer") is currently in the process of organizing a business in Idaho to import Third World handicraft products ("the products") into the United States. The products will be offered for sale in the Commonwealth through direct mail order catalogs. The Taxpayer asks under what conditions is it necessary to register as a dealer for collection and remittance of the tax.
RULING
§58.1-612 of the Code of Virginia and Virginia Regulation 630-10-29.1, copies enclosed, set forth the "nexus" requirements which give the Commonwealth the authority to require dealers to register for collection and remittance of the sales tax. If the Taxpayer meets one or more of the nexus requirements as set forth in the above cited statute or regulation, it must register as a dealer for collection and payment of the tax, forms enclosed. If the Taxpayer does not meet any of the nexus requirements, it may as a service to its customers voluntarily register as a dealer for collection and remittance of the tax.
It should be noted that legislation is now before Congress to expand the ability of states to require the collection of the tax by out-of-state mail order businesses. If enacted, this legislation may impact tax collection requirements in Virginia and other states.
If you have any questions, please contact us.
Sincerely.
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner