Tax Type
Retail Sales and Use Tax
Description
Carpet installation methods
Topic
Taxability of Persons and Transactions
Date Issued
09-21-1989
September 21, 1989
Re: Ruling Request/Sales and Use Tax
Dear***************
This will reply to your letter of April 27, 1989 requesting a ruling on the sales tax application to various methods of carpet installation.
The application of the tax to floor covering dealers is set forth in Virginia Retail Sales and Use Regulation 630-10-27(G) (copy enclosed). Persons selling and installing floor covering which becomes permanently affixed to the floors below are considered to be the using or consuming contractor with respect to such items.
A person who installs floor coverings may be either a contractor or a retailer. Floor coverings, as distinguished from the floors themselves, include rugs, mats, padding, wall-to-wall carpet and any other floor covering not permanently affixed to the floor below. A retailer shall be deemed to be any person who maintains a retail or wholesale place of business, an inventory of the aforementioned and/or materials which enter into or become a component part of the aforementioned items, and who perform installation as part of the sale of such items. I will now address the specific situations as outlined in your letter.
Permanent "Double-Stick" Broadloom Carpet Installation: Due to the fact that both the cushion and the carpet are permanently glued down, this would be classified as contract work.
Releasable "Double-Stick" Broadloom Carpet Installation: Due to the fact that the carpet is attached to the cushion using a releasable adhesive, this would be considered a floor covering.
Permanent Modular Carpet Installation: Due to the fact that the carpet tiles are permanently glued down and the entire substrate is covered with permanent adhesive, this would be considered contract work.
Releasable Full Spread Modular Carpet Installation: If the carpet can be removed without material injury to the carpet or to the real estate, this would be considered a floor covering.
Releasable Grid System Modular Carpet Installation: From the information provided, it appears that the carpet can be removed with no damage to the substrate. If this is the case, this would be classified as a floor covering.
Releasable Perimeter Glue Broadloom Carpet Installation: The fact that this is a loose lay installation with only releasable adhesive used on the perimeter of the carpet, this would be classified as a floor covering.
In answer to your question concerning the invoicing to your customers, no sales tax would be shown on the invoice for contract work. Instead your corporation would be responsible for the sales or use tax on all material used to perform contract work. This tax may be taken into account when bidding on contract jobs. When making retail sales, the tax does not apply to installation charges when separately stated on the invoice. If the installation charge is not separately stated, the tax must be computed on the total charge.
I hope this has answered all of your questions. 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