Tax Type
Retail Sales and Use Tax
Description
Occasional sales, including mergers; Construction equipment
Topic
Taxability of Persons and Transactions
Date Issued
03-27-1998
March 27, 1998
Dear*************
his will respond to your letter of December 23, 1997, in which you seek correction of a sales and use tax assessment issued to ***** (the "Taxpayer') for the period June 1991 through March 1997. I note that the entire assessment has been paid.
FACTS
The Taxpayer provides contract services such as hauling and grading. The only contested issue involves the untaxed purchase by the Taxpayer of a construction tractor. This tractor was purchased in November 1994 from ***** (the "Seller'). The Seller is a Florida-based construction company.
You contend that the contested purchase is associated with an exempt occasional sale. In this regard, you rely on Public Document 96-181 (7/24/96). In that document, the Tax Commissioner addressed the application of the tax to a number of purchases by a heavy construction contractor. Some of those purchases were made from other contractors who were engaging in exempt occasional sales. You maintain that the Taxpayer's purchase in this case was made under the same circumstances.
DETERMINATION
Code of Virginia Sec. 58.1-609.10(2) provides an exemption from the tax for an occasional sale as defined in Sec. 58.1-602. That section defines an "occasional sale' as:
The Seller in your case operates in Florida as a registered dealer. The Seller is registered in Florida to charge, collect and remit the Florida sales tax on taxable sales of construction and landscaping materials. Further, the Seller made more than three sales of equipment in 1994. Accordingly, the Seller sold to the Taxpayer tangible personal property which was likely used in an activity for which the Seller is required to hold a certificate of registration. Also, the Seller made more than three sales of such equipment in the applicable calendar year. Based on this sales activity, the Seller did not engage in an exempt occasional sale.
Based on this determination, the Taxpayer's purchase of the contested tractor was properly assessed. However, if you have any questions regarding this issue, please contact ***** in the department's Office of Tax Policy at *****.
Dear*************
his will respond to your letter of December 23, 1997, in which you seek correction of a sales and use tax assessment issued to ***** (the "Taxpayer') for the period June 1991 through March 1997. I note that the entire assessment has been paid.
FACTS
The Taxpayer provides contract services such as hauling and grading. The only contested issue involves the untaxed purchase by the Taxpayer of a construction tractor. This tractor was purchased in November 1994 from ***** (the "Seller'). The Seller is a Florida-based construction company.
You contend that the contested purchase is associated with an exempt occasional sale. In this regard, you rely on Public Document 96-181 (7/24/96). In that document, the Tax Commissioner addressed the application of the tax to a number of purchases by a heavy construction contractor. Some of those purchases were made from other contractors who were engaging in exempt occasional sales. You maintain that the Taxpayer's purchase in this case was made under the same circumstances.
DETERMINATION
Code of Virginia Sec. 58.1-609.10(2) provides an exemption from the tax for an occasional sale as defined in Sec. 58.1-602. That section defines an "occasional sale' as:
-
- A sale of tangible personal property not held or used by a seller in the course of an activity for which he is required to hold a certificate of registration, including the sale or exchange of all or substantially all the assets of any business and the reorganization or liquidation of any business, provided such sale or exchange is not one of a series of sales and exchanges sufficient in number, scope and character to constitute an activity requiring the holding of a certificate of registration. (Emphasis added.)
- A sale of tangible personal property not held or used by a seller in the course of an activity for which he is required to hold a certificate of registration, including the sale or exchange of all or substantially all the assets of any business and the reorganization or liquidation of any business, provided such sale or exchange is not one of a series of sales and exchanges sufficient in number, scope and character to constitute an activity requiring the holding of a certificate of registration. (Emphasis added.)
The Seller in your case operates in Florida as a registered dealer. The Seller is registered in Florida to charge, collect and remit the Florida sales tax on taxable sales of construction and landscaping materials. Further, the Seller made more than three sales of equipment in 1994. Accordingly, the Seller sold to the Taxpayer tangible personal property which was likely used in an activity for which the Seller is required to hold a certificate of registration. Also, the Seller made more than three sales of such equipment in the applicable calendar year. Based on this sales activity, the Seller did not engage in an exempt occasional sale.
Based on this determination, the Taxpayer's purchase of the contested tractor was properly assessed. However, if you have any questions regarding this issue, please contact ***** in the department's Office of Tax Policy at *****.
Rulings of the Tax Commissioner