Tax Type
Retail Sales and Use Tax
Description
Exemption certificates; Supplier of commercial vessels.
Topic
Exemptions
Date Issued
03-11-1998
March 11, 1998
Dear***:
This is in response to your letter in which you request a ruling regarding the acceptance of certificate of exemptions by your client, ***** (the Taxpayer), on sales of tangible personal property.
FACTS
The Taxpayer is in the business of selling products, equipment, and services for use on board commercial vessels involved in interstate and foreign commerce. The Taxpayer questions whether the receipt of a certificate of exemption with the signature of an authorized purchasing agent is valid for such sales for sales tax purposes.
RULING
Code of Virginia § 58.1-609.3(4) provides an exemption from the retail sales and use tax for:
Ships and vessels, or repairs and alterations thereof, used or to be used exclusively or principally in interstate or foreign commerce; fuel and supplies for use or consumption aboard ships or vessels plying the high seas, either in intercostal trade between ports in the Commonwealth and ports in other states of the United States or its territories or possessions, or in foreign commerce between ports in the Commonwealth and ports in foreign countries, when delivered directly to such ships or vessels; or tangible personal property used directly in the building, conversion or repair of the ships or vessels covered by this subdivision.
A person making purchases of tangible personal property covered under the above exemption must provide the dealer with a completed Certificate of Exemption Form ST-19. In considering the signature requirements on the certificate of exemption, the form must be signed by an officer of the corporation, one partner of a partnership, a sole proprietor, or a person authorized to sign on behalf of the corporation, partnership, or sole proprietorship.
By signing the certificate, the purchasing agent is certifying that it is authorized to sign the certificate on behalf of the purchaser in making such purchases. The certificate of exemption is valid provided the purchaser has properly completed the face of the certificate and specifies the purpose for which the tangible personal property is exempt under the law.
I note that Title 23 of the Virginia Administrative Code (VAC) 10-210-280 explains that the burden of proving that the tax does not apply rests with a 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. The regulation further provides that "[a]n exemption certificate cannot be used to make a tax-free purchase of any item of tangible personal property not covered by the exact wording of the certificate.' Therefore, the seller must use reasonable care and judgement in selling tangible personal property exclusive of the tax, even when an exemption certificate from the purchaser is in his file.
I have enclosed a sampling of prior determinations which address the application of the tax regarding tangible personal property used or consumed aboard ships or vessels. In addition, I am also enclosing copies of the exemption statute, regulation, and form ST-19 for your review.
I trust the foregoing has answered your concerns. If you have any questions regarding this letter, please contact ***** in my Office of Tax Policy at *****.
Dear***:
This is in response to your letter in which you request a ruling regarding the acceptance of certificate of exemptions by your client, ***** (the Taxpayer), on sales of tangible personal property.
FACTS
The Taxpayer is in the business of selling products, equipment, and services for use on board commercial vessels involved in interstate and foreign commerce. The Taxpayer questions whether the receipt of a certificate of exemption with the signature of an authorized purchasing agent is valid for such sales for sales tax purposes.
RULING
Code of Virginia § 58.1-609.3(4) provides an exemption from the retail sales and use tax for:
Ships and vessels, or repairs and alterations thereof, used or to be used exclusively or principally in interstate or foreign commerce; fuel and supplies for use or consumption aboard ships or vessels plying the high seas, either in intercostal trade between ports in the Commonwealth and ports in other states of the United States or its territories or possessions, or in foreign commerce between ports in the Commonwealth and ports in foreign countries, when delivered directly to such ships or vessels; or tangible personal property used directly in the building, conversion or repair of the ships or vessels covered by this subdivision.
A person making purchases of tangible personal property covered under the above exemption must provide the dealer with a completed Certificate of Exemption Form ST-19. In considering the signature requirements on the certificate of exemption, the form must be signed by an officer of the corporation, one partner of a partnership, a sole proprietor, or a person authorized to sign on behalf of the corporation, partnership, or sole proprietorship.
By signing the certificate, the purchasing agent is certifying that it is authorized to sign the certificate on behalf of the purchaser in making such purchases. The certificate of exemption is valid provided the purchaser has properly completed the face of the certificate and specifies the purpose for which the tangible personal property is exempt under the law.
I note that Title 23 of the Virginia Administrative Code (VAC) 10-210-280 explains that the burden of proving that the tax does not apply rests with a 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. The regulation further provides that "[a]n exemption certificate cannot be used to make a tax-free purchase of any item of tangible personal property not covered by the exact wording of the certificate.' Therefore, the seller must use reasonable care and judgement in selling tangible personal property exclusive of the tax, even when an exemption certificate from the purchaser is in his file.
I have enclosed a sampling of prior determinations which address the application of the tax regarding tangible personal property used or consumed aboard ships or vessels. In addition, I am also enclosing copies of the exemption statute, regulation, and form ST-19 for your review.
I trust the foregoing has answered your concerns. If you have any questions regarding this letter, please contact ***** in my Office of Tax Policy at *****.
Rulings of the Tax Commissioner