Tax Type
Retail Sales and Use Tax
Description
Motor vehicles; Mobile offices and storage trailers.
Topic
Taxability of Persons and Transactions
Date Issued
12-12-1997
December 12, 1997
Re: Retail Sales and Use Tax
Dear**********
In your letter of November 3, 1997, you seek a ruling concerning the application of the Virginia retail sales and use tax to the rental of office and storage trailers in Virginia by ********* (the Taxpayer).
FACTS
The Taxpayer is a Maryland based company engaged primarily in the rental of office and storage trailers throughout the Mid-Atlantic region, including Virginia. You indicate that these trailers are not registered with the Virginia Department of Motor Vehicles (DMV) and are transported under the authority of dealer licenses and temporary permits. The Taxpayer has no business location in Virginia.
As a result of the legislation passed by the 1997 General Assembly, you indicate that DMV has advised the Taxpayer that its storage trailers are no longer subject to the motor vehicle sales and use tax. Consequently, you ask whether the Taxpayer would be required to register for the collection of the retail sales and use tax on the rental or lease of storage trailers to Virginia customers.
The Taxpayer also rents or leases office trailers to Virginia customers and asks whether it must register to collect the retail sales and use tax on such transactions.
RULING
Storage Trailers
Code of Virginia § 58.1-609.1 (2) exempts motor vehicles, trailers, semitrailers, mobile homes and travel trailers from the retail sales and use tax. For purposes of the retail sales and use tax, "motor vehicle" is defined by Code of Virginia § 58.1-602 as:
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- a "motor vehicle" as defined in § 58.1-2401, taxable under the provisions of the Virginia Motor Vehicle Sales and Use Tax Act (§ 58.1-2400 et seq.) and upon the sale of which all applicable motor vehicle sales and use taxes have been paid.
Effective July 1, 1997, Code of Virginia §§ 58.1-2402 and 58.1-2403 were amended to provide an exemption from the motor vehicle sales and use tax for motor vehicles with a gross vehicle weight rating (GVWR) or gross combination weight rating (GCWR) of 26,001 pounds or more. These statutory amendments were not intended to replace the motor vehicle sales and use tax with the retail sales and use tax on motor vehicles which have a GVWR or GCWR of 26,001 pounds or more. Accordingly, the department will not impose the retail sales and use tax on the sale, lease or rental of such motor vehicles, including storage trailers.
Mobile Offices
The taxation of mobile offices is addressed in Code of Virginia § 58.1-2402(A)(1) and (A)(2). These provisions of the Motor Vehicle Sales and Use Tax Act are administered by DMV. Therefore, you may want to seek guidance from DMV as to how the motor vehicle sales and use tax applies to your specific transactions regarding mobile offices. Since the taxation of mobile offices is administered by DMV and governed by the above cited statute, the retail sales and use tax will not be imposed on the sale, lease, or rental of mobile offices in Virginia.
Based on all of the facts presented, the Taxpayer is not required to register for the collection and remittance of the 4.5% retail sales and use tax on the rental, lease or sale of office trailers and storage trailers to Virginia customers.
If you have any questions about this response, please contact ****with my policy staff at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/13146R
Rulings of the Tax Commissioner