Tax Type
Retail Sales and Use Tax
Description
Agriculture; Repair and replacement parts for farm vehicles
Topic
Exemptions
Property Subject to Tax
Taxability of Persons and Transactions
Date Issued
04-03-1996
April 3, 1996
Re: Ruling Request: Retail Sales & Use Tax
Dear******
This will reply to your letter of February 7, 1996 in which you request a ruling on the application of sales and use tax to repair or replacement parts for vehicles qualifying as farm vehicles under Code of Virginia § 46.2-698.
Farm vehicles, licensed as such, will take on the same status as unlicensed farm vehicles for sales tax purposes. Tires and other accessories for vehicles used on a farm will qualify for sales and use tax exemption if purchased by a farmer engaged in agricultural production for market. This does not alter our position that all purchases for regularly licensed vehicles are subject to the tax.
However, I note that the restrictions placed on the use of farm licensed vehicles, by the Division of Motor Vehicles, include certain taxable activities such as the transportation of agricultural products to market and personal non-farm use. When a vehicle is used for both taxable and exempt purposes, the repair or replacement parts may be purchased exempt of the tax. Afterwards the farmer is to accrue and report the tax on such parts based on the percentage of time the vehicle ed in a taxable manner.
I trust that this information addresses your concerns. If you have any additional questions, you may contact**** at**************.
Sincerely
Danny M. Payne
Tax Commissioner
OTP/10889Q
Rulings of the Tax Commissioner