Tax Type
Retail Sales and Use Tax
Description
Request for Direct Pay Permit; Remittance of Tax
Topic
Returns/Payments/Records
Date Issued
04-02-1996
April 2, 1996
Re: Request for Ruling: Retail Sales and Use Tax
Dear**************
This will reply to your letter of December 18, 1995, requesting a ruling on a proposed method of paying the retail sales and use tax by****** (the "Taxpayer").
FACTS
The Taxpayer is a manufacturing processor of animal parts for further use in soap, perfume, etc. The Taxpayer is currently registered with the department for the collection of the sales and use tax. According to the Taxpayer, tangible personal property is purchased exempt of the tax using the resale certificate of exemption Form ST-10. Subsequently, the Taxpayer accrues the use tax on the tangible personal property purchased exempt of the tax and remits the tax to the department on its Sales and Use Tax Return. In essence, the Taxpayer has been treating its sales and use tax registration number as a direct pay permit.
The Taxpayer was notified by the*****District Office that its method of reporting its purchases is improper. As a result, the Taxpayer requests that the department grant the Taxpayer a direct payment permit.
RULING
Code of Virginia § 58.1-624 (copy enclosed) sets out the provisions for a direct payment permit. This statute restricts the issuance of direct payment permits to manufactures, mine operators, public service corporations, and those persons who store tangible personal property in Virginia for use both within and outside Virginia. This same code section further provides that a direct permit holder shall remit the tax on all sales, distributions, leases, storage of tangible personal property, and taxable services directly to the Tax Commissioner.
Based on the facts in this case, the department grants the Taxpayer a direct pay permit. I should note that the Taxpayer's sales and use tax registration number will be deleted upon the issuance of the direct payment permit.
Upon receiving the direct payment permit registration number, the Taxpayer should notify each dealer from whom purchases or leases of tangible personal property are made of its direct payment permit number and that the tax is being paid directly to the department.
A representative from the department's Registration Unit will contact the Taxpayer shortly regarding registration for the direct payment permit. If you have any further questions regarding this letter, you may contact **** of my Office of Tax Policy at***************.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/10720T
Rulings of the Tax Commissioner