Tax Type
Retail Sales and Use Tax
Description
Construction; Materials purchased for use in another state.
Topic
Taxability of Persons and Transactions
Date Issued
11-06-1997
November 6, 1997
Re: Ruling Request: Retail Sales and Use Tax
Dear***********
This will reply to your letter of September 19, 1997, in which you request a ruling as to the retail sales and use tax application to certain purchases made by****(the Taxpayer).
FACTS
The Taxpayer is a real property contractor located in Virginia. The Taxpayer is in the business of installing heating and air conditioning systems. The Taxpayer accepted a bid from a nonprofit educational organization to perform real property construction work in the organization's school building in Maryland. The Taxpayer will purchase materials that will be temporarily stored in Virginia for subsequent use in the Maryland project. The Taxpayer requests a ruling as to whether materials purchased for use in this real property contract are exempt from the Virginia sales and use tax.
RULING
Code of Virginia § 58.1-609.3(1) exempts from tax purchases by a contractor of construction materials which are temporarily stored in Virginia and which are to be used outside of Virginia in an exempt construction project. The exemption is restricted to construction materials that are to be incorporated into exempt real property construction and could be purchased tax free by the contractor in the other state.
Based on the information provided in your letter, the Taxpayer would have been able to purchase the property free of the sales tax in the state of Maryland for the construction project. I find that the material temporarily stored in Virginia for subsequent use on the exempt project in Maryland meets the statutory requirements under Code of Virginia § 58.1-609.3(1) and therefore qualifies for the exemption.
If you should have any further question, please contact ***** at ********* .
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12999T
Rulings of the Tax Commissioner