Tax Type
Retail Sales and Use Tax
Description
Services; Professional or personal; Medical information storage
Topic
Taxability of Persons and Transactions
Date Issued
09-30-1999
September 30, 1999
Re; Retail Sales & Use Tax
Dear****.
In your letter of July 7, 1999, you request a ruling concerning the application of the retail sales and use tax to operations conducted by the ***** (the Taxpayer). Copies of cited materials are enclosed.
FACTS
The Taxpayer provides individual medical information storage for immediate release to medical, police, and rescue authorities in an emergency. For an enrollment charge of $50 per person, an enrollee receives one year coverage of the Taxpayer's emergency medical information storage and retrieval service, a wallet card containing a code number and a toll-free telephone number, and a jeweler's instruction card for engraving jewelry w lith the enrollee's code number and the Taxpayer's toll-free telephone number.
For an additional and optional charge of $25, the Taxpayer will provide the enrollee with a bracelet containing the enrollee's code number and the Taxpayer's toll-free telephone number. To renew the coverage, the Taxpayer charges an annual renewal fee of $20 per person. Upon renewal, each person is requested to furnish updated information using forms and other documents provided by the Taxpayer.
You ask whether the Taxpayer owes tax on the jewelry, registrations, and renewals.
RULING
Based on the information presented, the Taxpayer is providing a nontaxable service pursuant to Code of Virginia Sec. 58.1-609.5(1) regardless of whether the bracelet is furnished or not. Clearly, the bracelet is engraved with information specific only to the enrollee and is only furnished in connection with the Taxpayer's services. Accordingly, the enrollment, renewal and bracelet fees charged by the Taxpayer to its enrollees are not taxable.
However, as a service provider, the Taxpayer is liable for the tax on all purchases of tangible personal property furnished in connection with its services. For example, the Taxpayer must pay the sales tax based on the cost price of bracelets, necklaces, information sheets, release of liability forms, envelopes, registration forms, wallet cards, jeweler's instruction cards, receipts, billing forms, order forms, computers, prewritten software, furniture, filing cabinets, and all other materials and equipment used in the provision of the Taxpayer's services. See Title 23 of the Virginia Administrative Code 10-
210-4040(E).
If the vendor is not registered to collect the Virginia sales or use tax, or a registered vendor fails to charge the tax, then the Taxpayer is responsible for reporting and paying the use tax to the Virginia Department of Taxation. For reporting the consumer use tax, a consumer use tax return, Form ST-7, must be used. To obtain an account number for filing such returns, a registration application (Form R-1) must be completed.
I trust the foregoing answers your questions. However, if you have a question about this response, please contact ***** of my Tax Policy staff at *****.
Re; Retail Sales & Use Tax
Dear****.
In your letter of July 7, 1999, you request a ruling concerning the application of the retail sales and use tax to operations conducted by the ***** (the Taxpayer). Copies of cited materials are enclosed.
FACTS
The Taxpayer provides individual medical information storage for immediate release to medical, police, and rescue authorities in an emergency. For an enrollment charge of $50 per person, an enrollee receives one year coverage of the Taxpayer's emergency medical information storage and retrieval service, a wallet card containing a code number and a toll-free telephone number, and a jeweler's instruction card for engraving jewelry w lith the enrollee's code number and the Taxpayer's toll-free telephone number.
For an additional and optional charge of $25, the Taxpayer will provide the enrollee with a bracelet containing the enrollee's code number and the Taxpayer's toll-free telephone number. To renew the coverage, the Taxpayer charges an annual renewal fee of $20 per person. Upon renewal, each person is requested to furnish updated information using forms and other documents provided by the Taxpayer.
You ask whether the Taxpayer owes tax on the jewelry, registrations, and renewals.
RULING
Based on the information presented, the Taxpayer is providing a nontaxable service pursuant to Code of Virginia Sec. 58.1-609.5(1) regardless of whether the bracelet is furnished or not. Clearly, the bracelet is engraved with information specific only to the enrollee and is only furnished in connection with the Taxpayer's services. Accordingly, the enrollment, renewal and bracelet fees charged by the Taxpayer to its enrollees are not taxable.
However, as a service provider, the Taxpayer is liable for the tax on all purchases of tangible personal property furnished in connection with its services. For example, the Taxpayer must pay the sales tax based on the cost price of bracelets, necklaces, information sheets, release of liability forms, envelopes, registration forms, wallet cards, jeweler's instruction cards, receipts, billing forms, order forms, computers, prewritten software, furniture, filing cabinets, and all other materials and equipment used in the provision of the Taxpayer's services. See Title 23 of the Virginia Administrative Code 10-
210-4040(E).
If the vendor is not registered to collect the Virginia sales or use tax, or a registered vendor fails to charge the tax, then the Taxpayer is responsible for reporting and paying the use tax to the Virginia Department of Taxation. For reporting the consumer use tax, a consumer use tax return, Form ST-7, must be used. To obtain an account number for filing such returns, a registration application (Form R-1) must be completed.
I trust the foregoing answers your questions. However, if you have a question about this response, please contact ***** of my Tax Policy staff at *****.
Rulings of the Tax Commissioner