Tax Type
Retail Sales and Use Tax
Description
Irrigation controllers
Topic
Collection of Tax
Date Issued
04-02-1993
April 2, 1993
Re: Request for Ruling: Sales and Use Tax
Dear****************
This will reply to your letter of February 10, 1993 regarding the application of the tax to the sale of irrigation controllers by**************(the Taxpayer).
FACTS
The Taxpayer, located in North Carolina, plans to sell and install computer operated irrigation controllers in Virginia. The product, which is used to control the timing and flow of irrigation systems, is sold primarily to nurseries and farmers with secondary sales to landscape-intensive developments, including residential and commercial customers, golf courses, etc.
DETERMINATION
Each of the issues raised in your correspondence will be addressed below:
Application of the tax: The Virginia sales and use tax is imposed on tangible personal property sold in Virginia or purchased for use or consumption in Virginia. The tax must be separately stated on each invoice and is calculated on the total sales price as defined in Virginia Regulation (VR) 630-10-95. However, the tax does not apply to separately stated installation charges.
The Virginia sales and use tax rate is a uniform 4.5% (3.5% state and 1% local). Registered dealers charge and collect the combined 4.5% tax on sales to Virginia customers and remit the entire amount to the department. When filing monthly sales and use tax returns, an out-of-state dealer is requested, but not required, to indicate in which Virginia locality the sale was made.
Exemptions from the tax: VR 630-10-20 mandates that all sales are subject to the tax unless the vendor takes, in good faith, a certificate of exemption from the customer indicating that the property is exempt under the law.
The Taxpayer's irrigation controller may be sold exempt of the tax to the following customers provided that the transaction is documented with the proper certificate of exemption. I have also referenced the regulation section governing such sales and the applicable exemption certificate:
Governmental Sales: Sales to the United States, the Commonwealth of Virginia and subdivisions of the Commonwealth are exempt if the purchases are pursuant to official purchase orders to be paid for out of public funds. VR 630-10-45; Certificate of Exemption ST-12.
Nonprofit Organizations: Certain nonprofit organizations in Virginia may purchase tangible personal property exempt of the tax. VR 630-10-74; Certificate of Exemption ST-13.
Agricultural Customers: The tax does not apply to tangible personal property sold to farmers for use in agricultural production for market. This exemption also extends to nurseries. VR 630-10-4; Certificate of Exemption ST-18.
Registration: In order to collect the tax from Virginia customers, and remit that tax to the department, the Taxpayer will be required to register as an out-of-state dealer. Upon receipt of the registration application, the Taxpayer will be assigned an account registration number. Shortly thereafter, Out-of-State Dealer's Use Tax Returns, Form ST-8, including instructions, will be sent to the Taxpayer.
A registration application as well as copies of the regulations noted above are enclosed, and a complete copy of the Virginia Sales and Use Tax Regulations will be mailed to you as soon as practicable.
Please contact the department if you need any additional information
Sincerely,
W. H. Forst
Tax Commissioner
OTP/6843I
Rulings of the Tax Commissioner