Tax Type
Retail Sales and Use Tax
Description
Certificate of Exemption
Topic
Exemptions
Date Issued
06-10-1999
June 10, 1999
Re: Request for Ruling: Retail Sales and Use Tax
Dear********
This is in reply to your letter of May 10, 1999, in which you request a ruling regarding the application of the retail sales and use tax to retail sales when the purchaser presents a resale certificate of exemption.
FACTS
The Taxpayer has been receiving multiple requests to accept resale certificates of exemption from companies and individuals who represent to the Taxpayer that the product purchased will be marked-up and resold. The Taxpayer seeks department approval that it may accept resale exemption certificates from other retail customers for the purpose of reselling the Taxpayer's product.
RULING
Code of Virginia § 58.1-603 imposes the sales tax upon every person who engages in the business of selling at retail; sales for resale are not taxable. Code of Virginia § 58.1-623, copy enclosed, specifically provides:
-
- All sales or leases are subject to the tax until the contrary is established. The burden of proving that a sale, distribution, lease, or storage of tangible personal property is not taxable is upon the dealer unless he takes from the taxpayer a certificate to the effect that the property is exempt....
As you can see from the foregoing, sales by the Taxpayer to a retailer for resale are exempt from the Virginia sales and use tax. The Taxpayer would be relieved of its responsibility to collect the sales tax only if the purchaser provides a valid resale exemption certificate (Form ST-10, copy enclosed). For a further discussion of what constitutes a valid resale exemption certificate, see Public Document (P.D.) 97-95 (2/21/97), copy enclosed. See also the department's regulation on exemption certificates set out under Title 23 of the Virginia Administrative Code 10-210-280, copy enclosed.
I trust that this response addresses your concerns and will assist you with regard to sales to other retailers. If you should have any further questions regarding this matter, please contact ***** of the department's Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/22899Q
Rulings of the Tax Commissioner