Bulletin Number
VTB 81-20
Tax Type
Retail Sales and Use Tax
Description
Fuels for Domestic Consumption; Locality Ordinance to Exempt
Topic
Local Taxes Discussion
Date Issued
08-20-1981
The purpose of this bulletin is to set forth the procedures for notifying the Department of Taxation upon the adoption of a local ordinance removing the local 1% sales and use tax on certain fuels for domestic consumption.
Effective October 1, 1981 Virginia Code §58-441.6(gl) exempts from the 3% state sales and use tax "artificial or propane gas, firewood, coal, or home heating oil used for domestic consumption. Domestic consumption means the use of artificial or propane gas, firewood, coal, or heating oil by an individual purchaser for other than business, commercial, or industrial purposes.' However, Virginia Code § 58-441.49.3 provides that the 1% local sales and use tax shall apply to sales of fuel for domestic consumption unless exempted by a duly adopted ordinance of a county or city.
Therefore, unless an exempting ordinance is enacted by a locality, the local 1% tax will continue to apply to heating fuels for domestic consumption, even though such fuels are exempt from the 3% state tax. The local tax on fuels will be collected by dealers, paid to the department and returned to the localities in the same manner as all other local sales and use tax. Dealers whose place of business is located in a locality adoptingan ordinance to exempt heating fuels for domestic consumption from the local tax would not collect the local tax even though the fuel may be delivered to a customer in a locality which has not adopted an exempting ordinance.
If a locality does elect to enact an ordinance exempting heating fuels for domestic consumption from the 1% local sales and use tax, the Department of Taxation must be notified at least thirty (30) days prior to the effective date of the ordinance. The notification must include a copy of the ordinance and its effective date and should be sent to Tax Policy Division, Department of Taxation, P. O. Box 6-L, Richmond, Virginia 23282.
If you have any questions regarding this bulletin, please feel free to contact the Department.
Tax Bulletins