Tax Type
Retail Sales and Use Tax
Description
Graphics computer
Topic
Taxability of Persons and Transactions
Date Issued
09-11-1989
September 21, 1989
Dear ***********
This will reply to your letter of July 7, 1989, on behalf of ************* ("the Taxpayer"), seeking reconsideration of the department's November 7, 1988, ruling issued to the Taxpayer.
The department's ruling determined that the Taxpayer's purchase of a Dicomed graphics computer did not qualify for the industrial exemption set forth in Virginia Code §58.1-608(3)(b) and that such computer was properly included in the department's audit. The Taxpayer is requesting reconsideration based on its reading of §630-10-49.2 of the Virginia Retail Sales and Use Tax Regulations (Innovative high technology industries and research). The Taxpayer asserts that it produces "high technology" products (customized transparencies), and should be deemed an industrial manufacturer based on the aforementioned regulation.
I have reviewed my November 7, 1988 determination in light of your recent comments and do not find basis to revise my original determination. Inasmuch as the Taxpayer's production of transparencies is not industrial in nature as explained in my prior ruling, the industrial manufacturing exemption referenced in VR 630-10-49.2 and set forth in Virginia Code §58.1-608(3)(b) does not apply to the Taxpayer's purchase of the Diacomed graphics computer.
VR 630-10-49.2 sets forth the availability in general of the industrial manufacturing and research and development exemptions to businesses that manufacture high technology products and/or that conduct research activities in technologically innovative fields. The regulation does not change the requirements to qualify for the industrial manufacturing exemption.
Rather, it interprets the existing industrial manufacturing and processing and basic research and research and development exemptions found in §58.1-608 of the Virginia Code, as well as other statutes contained in the Virginia Retail Sales and Use Tax Act. Further, the regulation references existing departmental policy as reflected in VR 630-10-63 (Manufacturing and processing) and VR 630-10-92 (Research).
I trust this will answer your questions; however, please contact the department if you require additional information.
Sincerely.
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner