Tax Type
Retail Sales and Use Tax
Description
Dealers; Dealer With Representatives in Virginia
Topic
Taxability of Persons and Transactions
Date Issued
11-08-1991
November 8, 1991
Dear*********************
This will reply to your letter of September 27, 1991 in which you seek a ruling on applicability of the sales and use tax to sales made by one of your clients in Virginia.
FACTS
Effective October 1, 1991, one of your clients will have a representative making sales in Virginia. While the first sale to each facility will be made by the representative, subsequent sales/orders will be phoned in by customers to a toll-free number in Pennsylvania.
You seek a ruling on the taxability of the sales/orders phoned in.
RULING
Va. Code §58.1-612, copy enclosed, sets forth the "nexus" requirements which give the Commonwealth the authority to require dealers to register for collection and remittance of the sales tax. The statute provides in part that a dealer shall be deemed to have sufficient activity within the state to require registration if he "[s]olicits business in this State by employees, independent contractors, agents or other representatives." Thus, as you indicated in your letter, the first sale is taxable to Virginia for sales tax purposes since your client will have a representative making sales in Virginia.
In addition, once a dealer has subjected itself to tax collection, due to having sales representatives solicit business in Virginia or otherwise, it is required to collect the tax on all Virginia sales regardless of the manner in which sales orders are placed. As such, subsequent sales phoned in by customers to a toll-free number in Pennsylvania would be taxable.
If you have any further questions about this matter, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
TPD/5677H
Rulings of the Tax Commissioner