Tax Type
Retail Sales and Use Tax
Description
Funeral services; Tangible personal property
Topic
Taxability of Persons and Transactions
Date Issued
10-13-1993
October 13, 1993
Re: Request for Ruling: Retail Sales and Use Tax
Dear********************
This will reply to your letter of August 23, 1993 in which you indicated that the has received inquiries from funeral homes as the result of recent audits regarding the application of the retail sales and use tax to funeral goods and services. You request information on what items sales tax is to be charged the consumer among the many goods and services provided by funeral homes. Specifically, you request clarification on the application of the tax to services which may include the provision of tangible personal property, such as protective tents, chairs, lowering devices, artificial grass and gravedigging equipment.
RULING
Virginia Regulation 630-10-41 (copy enclosed) sets forth the application of the tax to charges made by funeral homes. When funeral homes, as prescribed under Va. Code §54.1-2812, issue an itemized statement of charges to include merchandise sold to the public in connection with funeral services, such as caskets, vaults, clothing, flowers, acknowledge cards, etc., the sales tax must be collected. Funeral homes, however, may purchase these items exempt of the tax under the resale exemption.
Charges for professional services, preparation of remains, funeral home facilities, etc. are not subject to the tax. However, any tangible personal property purchased for use or consumption by the funeral home to provide these services are taxable at the time of purchase. Likewise, in instances where tangible personal property is provided as part of professional services rendered and invoiced as a flat charge to funeral homes, the tax shall not apply to any portion of that charge as the true object is to secure services for the proper burial of the remains. The tangible personal property used in the provision of these services is subject to the tax at the time of purchase by the party providing the services.
Accordingly, since equipment such as chairs, tents, grass, lowering devices, gravedigging equipment, etc. are used to provide professional services, no sales tax should be added to the charge made by/to funeral homes for the use of these items in conjunction with the provision of funeral services. The sales tax should be paid at the time such equipment is purchased or rented. Therefore, the department will shortly contact those funeral homes which may have been erroneously held liable for the tax and issue revised assessments.
I hope the foregoing has responded to your inquiry. If you have additional questions, please do not hesitate to contact me.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/7299J
Rulings of the Tax Commissioner