Tax Type
Retail Sales and Use Tax
Description
Application of sales and use taxes; Furniture purchased by serviceman
Topic
Taxability of Persons and Transactions
Date Issued
06-14-1994
June 14, 1994
Re: §58.1-1821 Application: Retail Sales and Use Tax
Dear*************
This will reply to your letter of November 4, 1993 and subsequent correspondence in which you (the "Taxpayer") seek a refund of use tax and interest paid on a particular transaction.
FACTS
The Taxpayer is a military officer stationed in Virginia, maintaining his legal residence in another state. The Taxpayer purchased furniture from an out-of-state dealer not registered to collect Virginia sales tax. The furniture was delivered to the Taxpayer's home in Virginia via common carrier. The department assessed use tax on the amount of the purchase.
The assessment has been paid, and the Taxpayer seeks a refund on two grounds. First, the Taxpayer claims that §574 of the Soldiers' and Sailors' Civil Relief Act of 1940 (50 U.S.C. §501 et seq.) prohibits Virginia from imposing its use tax on personal property of a service member who is not a legal resident of the Commonwealth. Second, the Taxpayer contends that Va. Code § 58.1-604(4) makes the use tax inapplicable to the Taxpayer's situation.
DETERMINATION
Va. Code §58.1-604 imposes the use tax on the purchase of tangible personal property used on consumed in Virginia. The term "use" is defined in Va. Code §58.1-602 as "the exercise of any right or power over tangible personal property incident to the ownership thereof." In this case, the Taxpayer clearly made use of the tangible personal property in Virginia.
The United States Supreme Court addressed a state's authority to impose its use tax on nonresident military personnel in Sullivan v. United States, 395 U.S 169 (1969) (copy enclosed). The court ruled that the Soldiers' and Sailors' Civil Relief Act (the "Act") does not exempt servicemen from state sales and use taxes. The only taxes on the use of property from which servicemen are exempted are the annually recurring taxes on the same item of property, e.q., real estate and tangible personal property taxes. By contrast, the use tax is only imposed one time, after the purchase of tangible personal property. Accordingly, the use tax assessment on the Taxpayer's furniture purchase made outside Virginia for use in Virginia is not invalidated by the Act.
Va. Code § 58.1-604(4) provides that the "use tax shall not apply with respect to the use of any article of tangible personal property brought into this Commonwealth by a nonresident individual, visiting in Virginia, for his personal use, while within this Commonwealth." While the Taxpayer may be a nonresident individual for income tax purposes, the tangible personal property in question was not brought into Virginia while visiting the Commonwealth. The property was purchased outside Virginia and delivered to a Virginia address the Taxpayer had established prior to the purchase of the property. Va. Code §58.1-604(4) is not applicable to the Taxpayer's situation.
Based on the foregoing, the use tax was properly assessed on the Taxpayer's purchase. Therefore, the Taxpayer's request for refund must be denied.
Sincerely,
Danny M. Payne
Tax Commissioner
Rulings of the Tax Commissioner