Bulletin Number
VTB 80-3
Tax Type
Retail Sales and Use Tax
Description
1980 Legislative Changes: Sales and Use Tax
Topic
Reports
Date Issued
06-13-1980
DATE: June 13, 1980
SUBJECT: Sales and Use Tax: 1980 Legislative Changes
The 1980 General Assembly passed several laws modifying the filing requirements for Virginia sales and use taxes. The purpose of this bulletin is to announce these changes. The department will amend the Virginia Retail Sales and Use Tax Regulations to reflect these changes and will make necessary revisions to certificates of exemption for use in purchasing those items of tangible personal property exempted by this new legislation. One of the modifications exempted insulin and insulin syringes exempt from tax, however, a purchaser will not be required to furnish an exemption certificate for these items. The changes are explained below by major subject.
Agriculture
Effective July 1, 1980 Virginia Code § 58-441.6 exempts from the sales and use tax tangible personal property, necessary for agricultural production sold to or purchased by a contractor to be affixed to real property owned or leased by a farmer. Also § 58-441.15(b) exempts a contractor from the use tax liability on tangible personal property, necessary for agricultural production, furnished to him by a farmer for affixment to real property owned or leased by the farmer. Structural construction materials do not qualify for exemption. The law contains a refund provision for farmers who paid tax to contractors on exempt property installed between July 1, 1979 and July 1, 1980. (Senate Bill No. 63)
Airlines Operating in Intrastate, Interstate or Foreign Commerce
Effective July 1, 1980 Virginia Code § 58-441.6 exempts from the 4% sales and use tax all airlines operating in intrastate commerce providing "scheduled air service" as defined in § 58-685.31, and clarifies the present exemption to airlines operating in interstate or foreign commerce. This clarification is required as a result of the Federal Civil Aeronautics Board and the State's Bureau of Aeronautics' decision to stop issuing certificates of convenience and necessity which the current law requires for an exemption from these taxes. (Senate Bill No. 297)
Cable Television Systems
Effective July 1, 1980 Virginia Code § 58-441.6 exempts from sales and use tax broadcasting, transmission and distribution equipment and parts and accessories thereto and towers purchased for use by cable television systems. (House Bill No. 960)
Gift Wrapping Charges
Effective July 1, 1980, Virginia Code § 58-441.3(b) exempts from sales tax gift wrapping charges when such gift wrapping is performed by an organization conducted not for profit. (Senate Bill No. 73)
Historical Societies or Associations
Effective July 1, 1980 Virginia Code § 58-441.6 exempts from the sales and use tax the purchase of historical documents, manuscripts, paintings and art objects when acquired by a historical society or association conducted not for profit and historical documents, maps, rare books and manuscripts when acquired by a State historical society conducted not for profit which maintains a research library open to the public for research and educational purposes without charge. (Senate Bill No. 73)
Homes for Adults
Effective July 1, 1980 Virginia Code § 58-441.6 exempts from the sales and use tax the purchase of tangible personal property when acquired for use or consumption by a licensed nonprofit home for adults as defined in Virginia Code § 63.1-172A. (Senate Bill No. 73)
Insulin and Insulin Syringes
Effective July 1, 1980 Virginia Code § 58-441.6 exempts from the sales and use tax insulin and insulin syringes when purchased by an individual for his own use. Present law already exempts insulin when sold on prescription. (Senate Bill No. 260)
Laundered Textile Products
Effective July 1, 1980 Virginia Code § 58-441.6 exempts from the sales and use tax tangible personal property used directly in preparing and maintaining textile products by an industrial processor engaged in the commercial leasing or renting of laundered textile products. This law codifies the position taken by the department as the result of the Virginia Supreme Court decision rendered on January 11, 1980 in the case Orange-Madison Cooperative Farm Service v. Commonwealth of Virginia. (House Bill No. 179)
Research (Basic)
Virginia Code § 58-441.6 exempts from the sales and use tax tangible personal property purchased for use or consumption directly and exclusively in basic research in the experimental or laboratory sense. The effect of this law is to expand the research and development exemption currently provided in 58-441.6(q) to include not only applied research but basic research in the experimental or laboratory sense. This law is effective July 1, 1980 retroactive to January 1, 1979. (Senate Bill No. 62)
Retailer Classification: Persons Selling and Installing Fences, Venetian Blinds, Window Shades, Awnings, Storm Windows and Doors, Floor Coverings, Cabinets, Kitchen Equipment and Window Air Conditioning Units
Virginia Code § 58-441.15 classifies as retailers for sales and use tax purposes persons engaged in selling and installing fences, venetian blinds, window shades, awnings, storm windows and doors, floor coverings, as distinguished from floors themselves, cabinets, kitchen equipment, window air conditioning units or other like or comparable items. The law is effective July 1, 1980 retroactive to January 1, 1979. (House Bill No. 544)
Textbooks
Effective July 1, 1980 Virginia Code § 58-441.6 exempts from the sales and use tax school textbooks for use by students attending a college or other institution of learning, not conducted for profit, when sold by an dealer provided such textbooks have been certified by a department or instructor of the institution of learning as required textbooks for students attending courses at the institution. (House Bill No. 282)
Anyone having questions regarding these sales and use tax legislative changes should contact the department at P. O. Box 6-L, Richmond, Virginia 23282.
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