Retail Sales and Use Tax
Exemption certificates; Out-of-state resale and exemption certificates
August 18, 1997
Re: Request for Ruling: Retail Sales and Use Tax
This will reply to your letter of May 13, 1997, in which you request a ruling regarding the proper documentation needed to make exempt Virginia sales.
Title 23 of the Virginia Administrative Code (VAC) 10-210-280(A) provides that "[a]ll sales, leases and rentals of tangible personal property are subject to the tax until the contrary is established. The burden of proving that the tax does not apply rests with the dealer unless he takes, in good faith from the purchaser or lessee, a certificate of exemption indicating that the property is exempt under the law." Code of Virginia§ 58.1-602 (copy enclosed) defines "retail sale" as "a sale to any person for any purpose other than for resale in the form of tangible personal property or services taxable under this chapter..." I will address the situations in your letter using the format in your letter.
A buyer located in Washington D.C. purchases printed matter for resale and instructs the seller to deliver the printed matter to a Virginia customer. Can the seller accept a D.C. resale certificate from the buyer to document the exempt sale for resale?
The enclosed copy of P. D. 91-105 (6/28/91) provides that sellers may accept a Virginia resale exemption certificate (Form ST-10) that references the out-of-state registration number of the buyer. P. D. 97-95 (2/21/97) also allows sellers to accept resale certificates issued by other states if they contain the same information found on the Virginia Form ST-10. If the D.C. resale certificate provides the same information as the Form ST-10, the department would accept it. The enclosed copy of P. D. 97-95 explains this policy in more detail.
The buyer in situation #1 presents the seller with a D.C. exemption certificate rather than a resale certificate. Is the exemption certificate acceptable in Virginia?
No. There is no general exemption in Virginia for organizations that are exempt in other states or the District of Columbia. In situations where an organization claims an exemption from Virginia sales and use tax, the seller should obtain documentation from the buyer in the form of a valid Virginia exemption certificate or a letter from the Department of Taxation stating that the buyer is exempt. With the exception of resale certificates, exemption certificates or forms issued by other states are not acceptable documentation for exempt Virginia sales.
The same as situation #1, except the buyer provides the seller with a Maryland resale certificate.
My response in situation #1 would apply to this situation, also.
The same as situation #3 except the buyer provides the seller with a Maryland exemption certificate.
No. The response to situation #2 would apply to this situation, also.
I hope the information provided has addressed your concerns. If you have any questions regarding specific situations, please contact************* in the Office of Tax Policy at*******.
Danny M. Payne