Bulletin Number
VTB 84-13
Tax Type
Retail Sales and Use Tax
Description
1984 Legislative Changes
Topic
Basis of Tax
Credits
Exemptions
Date Issued
06-25-1984
1984 Legislative Changes
The 1984 Session of the General Assembly adopted several bills which affect the administration of sales and use taxes. The effective date of each of these bills is July 1, 1984, unless otherwise specified. Brief summaries of these bills are as follows:
RETAIL SALES AND USE TAX
1. Sales and Use Tax Exemption for Durable Medical Equipment and Devices (HB 106)
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- This bill exempts durable medical equipment and devices, as well as related parts and supplies, specifically designed for such equipment and devices, purchased by or on behalf of an individual for use by such individual. Durable medical equipment is equipment which can be used repeatedly, primarily used to serve a medical purpose, is not useful to a person who is neither ill nor injured, and is appropriate for use in the home. These items would remain taxable when purchased by doctors, profit nursing homes and hospitals.
- This bill exempts durable medical equipment and devices, as well as related parts and supplies, specifically designed for such equipment and devices, purchased by or on behalf of an individual for use by such individual. Durable medical equipment is equipment which can be used repeatedly, primarily used to serve a medical purpose, is not useful to a person who is neither ill nor injured, and is appropriate for use in the home. These items would remain taxable when purchased by doctors, profit nursing homes and hospitals.
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- This bill expands the mining exemption to allow an exemption for any machinery, tools, repair parts, fuel, power, energy, and supplies used directly in any reclamation activity of land previously mined by a mining company, as required by State or federal law. These items may be purchased under a Certificate of Exemption, Form ST-11.
- This bill expands the mining exemption to allow an exemption for any machinery, tools, repair parts, fuel, power, energy, and supplies used directly in any reclamation activity of land previously mined by a mining company, as required by State or federal law. These items may be purchased under a Certificate of Exemption, Form ST-11.
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- This bill will exempt parts and tires purchased or leased by taxicab operators for use or consumption in the rendition of their service. Certificate of Exemption, Form ST-20 may be used to make exempt purchases.
4. Manufacturing, Processing, and Mining Exemption Revision (HB 879)
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- This bill totally exempts from the sales and use tax machinery,. tools, and their repair parts and fuel, power, energy and supplies when more than 50 percent of their usage is used directly in manufacturing, processing or mining products for sale. Items preponderantly used in a taxable manner would be totally subject to the sales and use tax. The current method of prorating the tax based on the percentage of taxable use will no longer be used.
- This bill totally exempts from the sales and use tax machinery,. tools, and their repair parts and fuel, power, energy and supplies when more than 50 percent of their usage is used directly in manufacturing, processing or mining products for sale. Items preponderantly used in a taxable manner would be totally subject to the sales and use tax. The current method of prorating the tax based on the percentage of taxable use will no longer be used.
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- This bill exempts drugs dialysis equipment and supplies used in hemodialysis and peritoneal dialysis. These items are currently exempt when purchased by an individual for his own use. This bill extends this exemption to physician, hospitals, clinics, etc.
- This bill exempts drugs dialysis equipment and supplies used in hemodialysis and peritoneal dialysis. These items are currently exempt when purchased by an individual for his own use. This bill extends this exemption to physician, hospitals, clinics, etc.
AIRCRAFT SALES AND USE TAX
1. Valuation and Imposition of Aircraft Sales and Use Tax (HB 193)
This bill codifies the department's position that aircraft sales and use tax should be paid on either the current market value or purchase price, whichever is lower, on any aircraft which is purchased outside Virginia and licensed for use in Virginia six months or more after its acquisition. The bill also removes the prohibition to the levy of aircraft sales and use tax upon planes not required to be licensed in Virginia. Therefore, inoperable aircraft, Including aircraft kits, will now be subject to aircraft sales and use tax and no longer subject to retail sales and use tax.
2. Retail Sales Tax Credit Against Aircraft Sales Tax (SB 278)
Under current law; the 4% retail sales and use tax applies to component parts purchased for construction of an aircraft by its owner. The constructed aircraft is then subject to the 2% aircraft sales and use tax. This bill provides credit against the 2% aircraft sales and use tax for the 4% Virginia retail sales and use tax paid on the component parts of such assembled aircraft not to exceed the amount of the Virginia aircraft sales and use tax.
MOTOR VEHICLE FUEL SALES TAX
1. Repeal of Registration Fee (HB 195)
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- This bill eliminates the $5.00 fee for the Certificate of Registration required for each application. Each dealer still must have a Certificate of Registration for each place of business in Virginia. The effective date is January 1, 1985.
- This bill eliminates the $5.00 fee for the Certificate of Registration required for each application. Each dealer still must have a Certificate of Registration for each place of business in Virginia. The effective date is January 1, 1985.
WATERCRAFT SALES AND USE TAX
1. Watercraft Redefined (HB 39)
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- This bill redefines the term "watercraft" to mean any watercraft which is (1) fifteen feet or more in overall length measured along the centerline and powered by a motor in excess of twenty-five horsepower, or (2) any sail-powered vessel in excess of eighteen feet in length measured along the center line. There is no change in the tax and the returns will continue to be filed as heretofore. The effective date is July 1, 1984.
- This bill redefines the term "watercraft" to mean any watercraft which is (1) fifteen feet or more in overall length measured along the centerline and powered by a motor in excess of twenty-five horsepower, or (2) any sail-powered vessel in excess of eighteen feet in length measured along the center line. There is no change in the tax and the returns will continue to be filed as heretofore. The effective date is July 1, 1984.
This bill eliminates the $5.00 fee for the Certificate of Registration required for each application. Each dealer still must have a Certificate of Registration for each place of business in Virginia. The effective date is January 1, 1985
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