Tax Type
Retail Sales and Use Tax
Description
Photogrammetric services; Service vs. sale
Topic
Exemptions
Property Subject to Tax
Date Issued
04-28-1995
April 28, 1995
Re: §58.1-1821 Application: Retail Sales and Use Tax
Dear*************
This will reply to your letter of July 1, 1994, in which you apply for correction of a sales and use tax assessment issued to ************** (the "Taxpayer") for the period May 1988 through March 1994.
FACTS
The Taxpayer is an engineering and surveying firm that was assessed the tax on certain tangible personal property included with its purchase of photogrammetric services. Photogrammetric services are used by the Taxpayer to obtain detailed dimensioned survey plats much like those produced by a surveyor. The plat reports are created from aerial photographs and show the topography, contours, and positions of sizeable land areas. The Taxpayer contends these purchases are exempt from the tax as professional services and that the "true object" of the transactions is to obtain the professional skill and ability of the mapping services rather than the maps or plat reports.
DETERMINATION
The department previously determined in P.D. 86-207 (10/17/86, copy enclosed) that persons providing photogrammetric services were providing an exempt professional service. The value of the end product, ie., the plat or survey, transferred to customers was insignificant in comparison to the value of the service provided. The "true object" sought by customers was the photogrammetric services rather than the tangible personal property produced by those services.
Based on the above, tangible personal property provided to the Taxpayer in connection with photogrammetric services is exempt. Examples of such items are photographs, computer disks, mylar maps, or similar mediums used to transfer the photogrammetric information to the Taxpayer. However, purchases of these same items in a transaction unrelated to the provision of photogrammetric services would be subject to the tax.
The contested transactions will be removed from the Taxpayer's assessment. I note that you have paid the uncontested portion of the assessment; therefore, the assessment has been paid in full. If you have any questions concerning this letter you may contact***************.
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- Sincerely,
Danny M. Payne
Tax Commissioner
- Sincerely,
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OTP/8801S
Rulings of the Tax Commissioner