Tax Type
Retail Sales and Use Tax
Description
Services; Professional or Personal; Monogramming
Topic
Taxability of Persons and Transactions
Date Issued
12-21-1992
December 21, 1992
Re: §58.1-1821 Application: Retail Sales and Use Tax
Dear**************
This will reply to your letter dated September 10, 1992 in which you seek correction of sales and use tax assessed to**********(the Taxpayer), for the period September, 1989 through August, 1992.
FACTS
The Taxpayer is engaged in personalizing tangible personal property by providing monogramming and like services. The property may be offered for sale by the Taxpayer or furnished by the customer. The Taxpayer protests the application of tax to labor charges associated with the provision of its services when making sales of tangible personal property.
DETERMINATION
Va. Code §58.1-603, copy enclosed, imposes the sales tax on "...the gross sales price of each item or article of tangible personal property when sold or distributed in this Commonwealth." As defined under Va. Code §58.1-602, copy enclosed, "Sales price" means:
-
- the total amount for which tangible personal property or services are sold, including any services that are a part of the sale,.., (Emphasis added)
- the total amount for which tangible personal property or services are sold, including any services that are a part of the sale,.., (Emphasis added)
Based on the above statutes and regulation, when the Taxpayer sells tangible personal property and as a part of the sale provides its monogramming or like services, the sales tax must be computed on the total charge made to the customer even though the labor charge may be separately stated. However, when the monogramming or like services are without the sale of tangible personal property, then the Taxpayer is providing a nontaxable service. As such, the auditor was correct in applying the tax to labor charges attributed to services provided in connection with the sale of tangible personal property. The department's policy is established and longstanding concerning this issue as evidenced by VR §1-95 of the Virginia Retail Sales and Use Tax Regulations issued in 1969 and 1979, copies enclosed.
The Taxpayer also seeks information regarding partial payment plans and should direct its inquiries to the Collections Section, Office of Compliance, P.O. Box 1880, Richmond, Virginia 23282-1880.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/6453J
Rulings of the Tax Commissioner