Tax Type
Retail Sales and Use Tax
Description
Contractor special use tax for equipment brought into Virginia
Topic
Taxability of Persons and Transactions
Date Issued
10-25-1989
October 25, 1989
Dear*****************
This will reply to your letter of May 5, 1989, in which you wish to determine the application to your corporation of the special use tax imposed upon contractors by Va. Code §§58.1-604.1 - 58.1-604.3.
Under Va. Code §58.1-604.1, the tax is applicable only to property brought into Virginia for use in instate contracts. The tax is based on the original purchase price of the property, the amount of time the property is used in Virginia, and the overall useful life of the property. In determining the amount of time that the property will be used in Virginia, the statute provides that "[i]n the absence of satisfactory evidence as the period of use intended in this Commonwealth, it will be presumed that such property will remain in this Commonwealth for the remainder of its useful life."
Based on the foregoing, the tax does not apply to property that was never brought into Virginia. Similarly, where property has been removed from Virginia, the tax will apply only to the period of use here (see the enclosed ruling dated March 9, 1989). However, if a contractor is unable to provide evidence as to the removal of property from the state, it will be assumed that the property will remain in Virginia for the remainder of its useful life.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner