Tax Type
Retail Sales and Use Tax
Description
Out-of-state vendor; Collection of local portion of sales tax
Topic
Collection of Tax
Local Taxes Discussion
Returns/Payments/Records
Date Issued
11-20-1989
November 20, 1989
Dear**************
Thank you for letter of April 6, 1989, concerning your client's request to register for collection of the Virginia retail sales and use tax. We regret the delay in responding to your inquiry and that we were unable to reach you by telephone to discuss your letter.
You indicated in your letter that you represent an out-of-state direct mail merchandiser who solicits orders via mailed catalogs, and fills orders via common carrier. Your client wishes to voluntarily apply for a Certificate of Registration for the collection and remittance of the Virginia retail sales and use tax as a service to its Virginia customers. However, it wishes to collect only the state portion of the tax, or to have the state to allocate the local tax among the localities.
Every county and city in Virginia imposes a uniform local sales and use tax rate of 1%. The 1% local tax is administered and collected by the Department of Taxation in the same manner as the state sales and use tax and is subject to all of the provisions governing the state tax. §§58.1-606(E) of the Virginia Code and 630-10-60 of the Virginia Retail Sales and Use Tax Regulations, copies enclosed, set forth certain requirements governing the collection of the local tax by out-of-state dealers.
Virginia law does not authorize the registration of a dealer to collect only the state tax or only the local tax. An out-of-state dealer must collect both the state and local tax and, to the extent reasonably practicable in filing their sales and use tax returns, break down shipments into Virginia according to the city or county of destination. However, the law does provide that where it is not reasonably practicable to break down such shipments, the dealer may pay the local tax to the State without attempting to assign such shipments to a specific city or county.
Enclosed is an application form to apply for a Certificate of Registration. The date which you enter on line 23 of this form will determine the initial period for which a return will be due, assuming your client does not meet any of the nexus requirements set forth in §58.1-612 of the Code of Virginia and Virginia Regulation 630-10-29.1, copies enclosed.
I trust this addresses the concerns expressed in your letter; however, please contact the department if you have additional questions or if we may be of any further assistance.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner