Tax Type
Retail Sales and Use Tax
Description
Application of sales and use taxes; Visits by out-of-state dealer did not establish nexus
Topic
Taxability of Persons and Transactions
Date Issued
10-09-1998
October 9, 1998
Dear*************:
This will reply to your letter in which you request a ruling regarding Virginia's retail sales and use tax nexus standards as they would apply to your client (the "Taxpayer'). I apologize for the delay in responding to your letter.
FACTS
The Taxpayer, an interior decorator, is located outside Virginia. The Taxpayer provides design and consulting services to Virginia customers. In addition, the Taxpayer makes sales of furniture, curtains, and other items in connection with its interior decorating business. The Taxpayer purchases these items from various suppliers, which ship the property directly to the Virginia customer. The Taxpayer charges its customer a marked-up price on the tangible personal property and an hourly fee for any design or consulting services provided.
The Taxpayer has no business location in Virginia. In addition, you indicate that the Taxpayer does not advertise in Virginia. Its only contact within Virginia consists of periodic visits to its customers as a part of its consulting service. You ask if the Taxpayer has sufficient activity in Virginia to require it to register and collect tax on its sales to Virginia customers.
RULING
Under Code of Virginia Sec. 58.1-612, copy enclosed, the sales tax is collectible from all persons who are dealers. That same section defines the term "dealer' to include every person who offers tangible personal property for sale at retail in Virginia. The Taxpayer clearly qualifies as a "dealer' under this definition.
Code of Virginia Sec. 58.1-612(C) sets forth the nexus requirements which give the Commonwealth the authority to require a business to register for the collection and remittance of the Virginia sales tax. Based on the information presented, the Taxpayer does not meet any of the nexus criteria found in Code of Virginia Sec. 58.1-612(C). The fact that the Taxpayer makes periodic visits to its customers as a part of its consulting service does not, by itself, create nexus with Virginia. However, if the Taxpayer's employees, agents or other representatives solicit sales while in Virginia, nexus is created.
If the Taxpayer's activities exceed those described in the letter, it may be required to register for the collection and remittance of the sales tax under Code of Virginia Sec. 58.1-613 (copy enclosed).
I trust the foregoing has responded to your inquiry. If you have any further questions regarding this issue, you may contact ***** of the department's Office of Tax Policy at *****.
Dear*************:
This will reply to your letter in which you request a ruling regarding Virginia's retail sales and use tax nexus standards as they would apply to your client (the "Taxpayer'). I apologize for the delay in responding to your letter.
FACTS
The Taxpayer, an interior decorator, is located outside Virginia. The Taxpayer provides design and consulting services to Virginia customers. In addition, the Taxpayer makes sales of furniture, curtains, and other items in connection with its interior decorating business. The Taxpayer purchases these items from various suppliers, which ship the property directly to the Virginia customer. The Taxpayer charges its customer a marked-up price on the tangible personal property and an hourly fee for any design or consulting services provided.
The Taxpayer has no business location in Virginia. In addition, you indicate that the Taxpayer does not advertise in Virginia. Its only contact within Virginia consists of periodic visits to its customers as a part of its consulting service. You ask if the Taxpayer has sufficient activity in Virginia to require it to register and collect tax on its sales to Virginia customers.
RULING
Under Code of Virginia Sec. 58.1-612, copy enclosed, the sales tax is collectible from all persons who are dealers. That same section defines the term "dealer' to include every person who offers tangible personal property for sale at retail in Virginia. The Taxpayer clearly qualifies as a "dealer' under this definition.
Code of Virginia Sec. 58.1-612(C) sets forth the nexus requirements which give the Commonwealth the authority to require a business to register for the collection and remittance of the Virginia sales tax. Based on the information presented, the Taxpayer does not meet any of the nexus criteria found in Code of Virginia Sec. 58.1-612(C). The fact that the Taxpayer makes periodic visits to its customers as a part of its consulting service does not, by itself, create nexus with Virginia. However, if the Taxpayer's employees, agents or other representatives solicit sales while in Virginia, nexus is created.
If the Taxpayer's activities exceed those described in the letter, it may be required to register for the collection and remittance of the sales tax under Code of Virginia Sec. 58.1-613 (copy enclosed).
I trust the foregoing has responded to your inquiry. If you have any further questions regarding this issue, you may contact ***** of the department's Office of Tax Policy at *****.
Rulings of the Tax Commissioner