Tax Type
Retail Sales and Use Tax
Description
Sale of assets; Occasional sale exemption; Asphalt paving contractor
Topic
Exemptions
Persons Subject to Tax
Taxability of Persons and Transactions
Date Issued
03-15-1994
March 15 1994
Re: §58.1-1821 Application: Sales and Use Tax
Dear**********
This will reply to your letter of August 18, 1993 in which you seek correction of a sales and use tax assessment resulting from an audit of ********* (the "Taxpayer") for the period of July, 1991 through March, 1993.
FACTS
The Taxpayer is an asphalt paving contractor headquartered in Central Virginia. In addition to manufacturing asphalt for their own use and consumption in the paving business, the Taxpayer also sells asphalt at retail. The Taxpayer has a number of asphalt plants throughout eastern Virginia, all consolidated under the same corporate umbrella. The Taxpayer sold one of its asphalt plants, the sale of which was held taxable during the present audit. The Taxpayer is taking exception to the application of sales tax to the sale of plant contending that the sale qualifies as an occasional sale as defined in Va. Code §58.1-609.10(2).
DETERMINATION
An occasional sale is defined in Va. Code §58.1-602 to be "a sale of tangible personal property not held or used by a seller in the course of an activity for which he is required to hold a certificate of registration, including the sale or exchange of all or substantially all the assets of any business." (Emphasis added.)
Based on the information provided in your letter, the sale by the Taxpayer is clearly a sale of tangible personal property used by the seller in an activity requiring the holding of a certificate of registration. In addition, the sale did not include all or substantially all the assets of the business. The Taxpayer has not sold all the assets of the corporation and the Taxpayer continues to operate asphalt plants in other areas of the state. Accordingly, I do not find that the Taxpayer's sale qualifies as an occasional sale. This is consistent with previous determinations by the department. (See PD's 89-263 and 89-307 attached.)
Based on the foregoing, I find the audit assessment to be correct. To avoid accrual of additional interest, please pay ****within 30 days in full settlement of the outstanding audit liability. Payment should be sent to Audit Review Unit, P.O. Box 1880 Richmond, Virginia 23282-1880.
Sincerely,
Danny M. Payne
Acting Tax Commissioner
OTP/7492K
Rulings of the Tax Commissioner