Tax Type
Retail Sales and Use Tax
Description
Application of sales and use taxes; Memorial stones
Topic
Taxability of Persons and Transactions
Date Issued
08-18-1994
August 18, 1994
Re: Request for Ruling: Retail Sales & Use Tax
Dear********
This will reply to your letter of July 26, 1994 in which you seek a ruling on the tax status of supplies used by your company,************** (the "Taxpayer"), in the engraving of memorial stones.
FACTS
The Taxpayer is engaged in the retail sale of memorial stones. The stones are engraved in the following manner: (i) a rubberized material is placed on the stone and cut with the lettering and design desired; (ii) the stone is placed in a sandblasting room and sandblasted; and (iii) the rubberized material protects the stone, yet the unprotected areas are cut/engraved. You suggest that since the rubberized material cannot be reused and since you charge the sales tax on the retail sale of the stone that the material should not be subject to the tax.
You seek a ruling on the tax status of the rubberized materials used in the engraving of the memorial stones.
RULING
Virginia Regulation (VR) 630-10-66 provides that the tax applies to retail sales of memorial stones, monuments and markers without deduction for labor used in cutting and marking them.
While the Taxpayer may purchase the actual stone exempt from the tax under a resale exemption certificate, it must pay the tax to its suppliers on materials used in preparing the stone for sale to its customers. The Taxpayer's sandblasting/stone engraving portion of the business is ancillary to the retail nature of its business and thus no exemption from the tax is available for any equipment and materials used in preparing the stones for sale to customers. See P.D. 89-229 (8/31/89) relating to a similar type of operation.
Additionally, the resale exemption does not apply (as it does for the memorial stone itself) as the rubberized materials do not become the property of the purchaser (they are simply supplies used in the preparation of the stone for sale).
If you have any further questions regarding this matter, please let me know.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/8299H
Rulings of the Tax Commissioner