Tax Type
Retail Sales and Use Tax
Description
Dental supplies sold to dentist and dental laboratories
Topic
Exemptions
Property Subject to Tax
Date Issued
04-25-1994
April 25, 1994
Re: Request for Ruling: Retail Sales and Use Tax
Dear*************
This will reply to your request for information concerning the application of sales and use tax to the sale of metal alloys, porcelain, and machinery and equipment for use in the manufacture of dentures.
FACTS
Company A sells metal alloys and porcelain to dental laboratories and dentists for use in the manufacturer of dentures. The dental laboratories manufacture for resale while the dentists produce dentures for use in their professional practice. You question whether the manufacturing exemption applies to purchases by dental laboratories and dentists for use in manufacturing dentures.
RULING
Virginia Regulation (VR) 630-1 0-33(B), copy enclosed, provides that "[d]ental laboratories engaged in the production of dentures and the prosthetic items are deemed to be industrial manufacturers and qualify for the exemption set out in §630-10-63," copy enclosed. VR 630-10-63 exempts machinery, tools or repair parts, fuel, power, energy or supplies used directly in manufacturing or processing. Therefore, Company A may sell metal alloys, porcelain, machinery and equipment to dental laboratories for use in the manufacturer of dentures exempt of the tax.
However, a dentist producing dentures and supplying those dentures to his patients is deemed to be fabricating primarily for his own use and consumption and not primarily for sale or resale and as such is not entitled to any of the production exemptions. (See VR 630-10-37, copy enclosed.) In accordance with VR 630-10-33, dentists are deemed to be the consumers of all tangible personal property purchased for use in their practice except controlled drugs which may be purchased exempt of the tax. Therefore, sales by Company A to dentists for use in manufacturing dentures are subject to the tax.
I hope the foregoing has responded to your inquiry and if you need additional information please contact the department.
Sincerely,
Danny M. Payne
Acting Tax Commissioner
OTP/7001J
Rulings of the Tax Commissioner