Tax Type
Retail Sales and Use Tax
Description
Fish processing and packaging operation
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
08-24-1989
August 24, 1989
Re: Ruling Request/Sales and Use Tax
Dear***********
This is in reply to your letter of July 19, 1989 requesting a ruling on the sales and use tax application to your aquaculture operation and your fish processing and packaging operation.
FACTS
***********is in the aquaculture (fish farming) business. In addition to farming fish for resale,********* also has a processing operation in which the fish are filleted and packaged. ********** understands that its aquaculture operation would enjoy the exemption allowed by §630-10-4 of the Virginia Retail Sales and Use Tax Regulations which deals with agricultural production for market. Fish farming is specifically addressed in §630-10-4(D). ***********would like clarification on the sales tax application to its processing and packaging operation.
RULING
*********processing and packaging operation would enjoy the industrial manufacturing exemption provided by §58.1-608(1) of the Code of Virginia and §630-10-63 of the Regulations (copies enclosed). §630-10-63(B) of the regulation defines industrial processors as "...establishments engaged in the treatment of materials, substances, or other products in such a manner as to render such products more useful or marketable. Products need not undergo a change in state or form in order for an establishment to be classified as an industrial processor." This section goes on to say that only those items used directly in the manufacturing process would be exempt. §630-10-63(B)(2) of the regulation defines "used directly" and outlines to what extent the exemption applies.
If you should have any further questions, please feel free to contact this department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner