Tax Type
Retail Sales and Use Tax
Description
Rental/lease of trailers
Topic
Exemptions
Property Subject to Tax
Date Issued
01-08-1999
January 8, 1999
Re: Request for Ruling: Retail Sales and Use Tax
Dear *********************
This is in response to your letter requesting a ruling concerning the application of the retail sales and use tax to the rental and sale of storage trailers by **************** (the Taxpayer). I apologize for the delay in responding to your letter.
FACTS
The Taxpayer rents and sells storage trailers to retailers, contractors and private individuals. The Taxpayer buys old semi-trailers which have been taken out of service. Some have Virginia titles. Others have salvage titles or just a bill of sale.
RULING
Title 23 of the Virginia Administrative Code (VAC) 10-210-990(A) provides the following:
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- Sales, leases, and rentals of motor vehicles are not subject to the retail sales and use tax provided they are subject to the Virginia motor vehicle sales and use tax administered by the Department of Motor Vehicles and further provided that such tax has been paid. Any type of motor vehicle which is not subject to the motor vehicle sales and use tax shall be subject the retail sales and use tax when sold, leased or rented.
- Sales, leases, and rentals of motor vehicles are not subject to the retail sales and use tax provided they are subject to the Virginia motor vehicle sales and use tax administered by the Department of Motor Vehicles and further provided that such tax has been paid. Any type of motor vehicle which is not subject to the motor vehicle sales and use tax shall be subject the retail sales and use tax when sold, leased or rented.
As the storage trailers at issue are semi-trailers, they fall within the definition of "motor vehicle" in Code of Virginia § 58.1-2401 and may be subject to the motor vehicle sales and use tax. The Taxpayer should contact DMV for more information regarding the application of the motor vehicle sales and use tax to its transactions. A DMV rental tax representative can be reached at (804) 367-4324.
I would note, however, that the 4.5% retail sales and use tax administered by the Department of Taxation will apply to the sale, rental or lease of any storage trailer which is not subject to the motor vehicle sales and use taxes r for which the motor vehicle sales and use tax has not been paid (except for the sale, lease or rental of a storage trailer with a GVWR or GCWR of 26,001 pounds or more).
If you have any questions about this ruling, please contact ******************* of my tax policy staff at ********.
Sincerely,
Danny M. Payne
Tax Commissioner
Rulings of the Tax Commissioner