Tax Type
Retail Sales and Use Tax
Description
Nonindustrial processing; Engraving and embroidery
Topic
Taxability of Persons and Transactions
Date Issued
09-14-1993
September 14, 1993
Re: §58.1-1821 Application: Retail Sales and Use Tax
Dear*************
This will respond to your recent letters seeking reconsideration of the department's position as stated in my February 9, 1993 letter with respect to certain aspects of your business.
You continue to maintain that the Taxpayer is entitled to exemption from the retail sales and tax as an industrial processor pursuant to subdivision 2 of Va. Code §58.1-609.3. Virginia Regulation (VR) 630-10-63 provides that an "industrial manufacturer...shall include but not be limited to businesses classified or substantially similar to other businesses classified in codes 20 through 38 of the Standard Industrial Classification (SIC) Manual." You suggest that your business falls within SIC code 34 - Fabricated Metal Products, Except Machinery and Transportation Equipment, and particularly Industry No. 3479 - Coating, Engraving, and Allied Services, Not Elsewhere Classified. The description of businesses falling within this category states that "[e]stablishments primarily engaged in performing the following types of services on metals...."
It is my understanding, however, that while the Taxpayer cuts and engraves metal plates for attachment to plaques and trophies, and embroiders sport jackets and other items, it is primarily a retailer of such trophies, awards, plaques and jackets, shirts and caps. Accordingly, it falls within SIC code 59 - General Merchandise Stores, and particularly Industry 5999 - Miscellaneous Retail Stores, Not Elsewhere Classified.
Furthermore, as explained in my February 9, 1993 letter, the engraving of plates and embroidering of clothing is deemed to be nonindustrial in nature as explained in VR 630-10-63 and incidental to the retail sales of such items.
Accordingly, I find no basis for concluding that the Taxpayer is an industrial processor. Thus, my prior determination to you is correct.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/6799H
Rulings of the Tax Commissioner