Tax Type
Retail Sales and Use Tax
Description
ANTIQUE PURCHASES
Topic
Collection of Tax
Exemptions
Taxability of Persons and Transactions
Date Issued
01-19-1994
Virginia Department of Taxation
January 19, 1994 94-1
RETAIL SALES AND USE TAX: ANTIQUE PURCHASES
Law change: Effective January 1,1994, Virginia dealers are prohibited from accepting a resale exemption certificate from the purchaser of tangible personal property which is more than 50 years old if the purchaser does not have a Virginia sales and use tax registration number. The purchaser must pay the sales tax and apply for a refund of the tax after the property is resold. See Va. Code §58.1-602.1.
Under the new law, every Virginia dealer is required to separately report gross sales of tangible personal property more than 50 years old to purchasers who:
(1) offer a resale exemption certificate, and
(2) have no Virginia sales and use tax registration number.
In an effort to keep the administrative burden on Virginia dealers to a minimum, while satisfying the separate reporting requirement mandated in the statute, the department has incorporated current reporting and refund procedures wherever possible.
Compliance: Because this Tax Bulletin has been issued subsequent to the effective date of the law change, the department will audit for compliance for taxable periods beginning February 1, 1994 and after.
Schedule ST-51 and instructions will be mailed to dealers by March 1, 1994. Schedules may also be obtained by contacting the department.
Filing Requirements: Schedule ST-51 has been developed for separate reporting purposes and must be filed with Form ST-9 (Dealer's Retail Sales and Use Tax Return) for any period in which the dealer has such transactions to report. This schedule must also be used to report refunds issued and credits taken as a result of claims made by purchasers to the dealer (see below).
Refund Procedures: An out-of-state dealer who pays the tax and subsequently resells the item(s) purchased within 18 months of the purchase date may apply to the dealer who sold the property for a refund or credit of the sales tax paid.
Evidence of a bona fide sales transaction must be presented to the Virginia dealer to validate the refund/credit claimed by the out-of-state dealer (purchaser). A copy of the sales invoice showing the item(s) sold and the date of the sale are required to be presented to the Virginia dealer, along with a copy of the original purchase invoice.
As provided under current department procedures, a purchaser may request a refund directly from the department if the Virginia dealer is no longer in business when the purchaser's right to a refund arises.
The purchaser must provide the department with evidence of a bona fide sales transaction, as set forth above, along with proof of the month the sales tax on the purchase was reported to the department.
Bond: In lieu of providing a Virginia sales and use tax registration number, a purchaser may post bond in accordance with Va. Code §§58.1-630 and 16.1-107 to secure collection of the tax. In such a case, the Virginia dealer shall accept the resale exemption certificate offered by the purchaser and report the transaction on Form ST-9 only (not on Schedule ST-51).
EXAMPLE: In June of 1994 Company X, a Virginia furniture dealer, sold $7,500 in furniture and also sold an antique oak washstand for $300 to an out-of-state antique dealer (Purchaser 1). Purchaser 1 presented a resale exemption certificate but did not have a Virginia sales and use tax registration number. During the same month, merchandise with a sales price of $700 was returned to Company X, and a refund of $18 was issued to an out-of-state dealer (Purchaser 2) who purchased an antique coffee table for $400 (excluding tax) in February 1994 and paid the tax after his resale exemption certificate was not accepted because he did not have a Virginia sales and use tax registration number. Purchaser 2 resold the coffee table in May.
In order to comply with the new law (Va. Code §58.1-602.1), Company X must
-
- (1) Refuse to accept Purchaser's resale exemption certificate and charge $13.50 for Virginia sales tax on the purchase of the antique oak washstand for $300.
-
- (2) Report gross sales and deductions for February on Form ST-9 and Schedule ST-51
A - Gross sales reported on Form ST-9: $7,800 ($7,500 furniture plus $300 for the antique washstand) B - Gross sales reported on Schedule ST-51 $300 C - Deductions reported on Form ST-9 $1,100 ($700 sale price for returned merchandise plus the $400 sales price of the coffee table for which a refund was issued) D - Deductions reported on Schedule ST-51 $400
NOTE: Amounts entered on Schedule ST-51 are included in the figures reported on the Virginia dealer's ST-9. The schedule is for information purposes only and separate payments should not accompany this schedule. Dealers should maintain records of these transactions for verification of the deductions claimed.
For additional information: Contact the Office of Taxpayer Services, Virginia Department of Taxation, P.O. Box 1880, Richmond, Virginia 23282-1880, (804) 367-8037.
Rulings of the Tax Commissioner