Tax Type
Retail Sales and Use Tax
Description
Services; Trash Bags for Garbage Collection
Topic
Taxability of Persons and Transactions
Date Issued
04-01-1992
April 1, 1992
Re: Request for Ruling: Sales and Use Tax
Dear****************
This will reply to your letter of February 12, 1992 in which you request a ruling as to the sales and use tax application to a refuse collection system being implemented by the (the Taxpayer).
FACTS
The Taxpayer is requesting a ruling to determine whether the sale of trash bags would be subject to the sales tax as the sale of tangible personal property, or simply a charge for providing the service of refuse collection and disposal. Residents of the locality must purchase these bags and place their refuse in them in order for it to be collected. The price of the trash bags will replace the monthly fee now being charged to all residents.
RULING
Virginia Regulation (VR) 630-10-97.1 provides that for purposes of distinguishing whether a particular transaction which involves both the rendering of a service and the provision of tangible personal property constitutes an exempt service or a taxable retail sale, the "true object" of the transaction must be examined.
Based on the fact presented, the "true object" in purchasing the bags is the actual refuse service provided by the Taxpayer. Therefore, the sale of such bags is exempt from the tax.
If you should have any questions, please feel free to contact the department.
Sincerely,
W. H. Forst
State Tax Commissioner
TPD/5976K
Rulings of the Tax Commissioner