Tax Type
Retail Sales and Use Tax
Description
Farmer purchase of storage tanks, machinery parts and tobacco barns
Topic
Taxability of Persons and Transactions
Date Issued
10-27-1989
October 27, 1989
Re: Request for Ruling/ Sales and Use Tax
Dear*************
This will reply to your letter of August 2, 1989, concerning the proper application of sales and use tax to purchases of storage tanks, parts for machinery and tobacco barns by farmers.
§58.1-608(2) of the Code of Virginia and §630-10-4 of the Virginia Retail Sales and Use Tax Regulations, copies enclosed, set forth the proper application of the sales and use tax to various purchases by farmers. Under VR 630-10-4, the tax does not apply to farm machinery and agricultural supplies sold to farmers for use in agricultural production for market. The tax also does not apply to parts for such farm machinery. However, the tax does apply to structural construction materials when sold to or purchased by a farmer to be affixed to real property owned or leased by a farmer.
VR 630-10-4(A) provides in part that,
-
- The term "structural construction materials" includes but is not limited to the following: silos; barns and sheds; storage bins(not portable) . . . fuel oil storage tanks . . . plumbing, except as part of special purpose equipment(e.g., water feeding system in poultry house) . . . and bulk tobacco curing barns. These items are therefore subject to tax. (Emphasis added).
Permanent storage tanks, tobacco barns, and parts to be affixed to such property are thus taxable in accordance with the above regulation.
I trust this will answer the question posed in your letter; however, please contact the department if you require additional information.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner