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PDtax
PDtax, CPA firm owner
Category: Tax
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Experience:  32 years tax experience, including four years at a Big 4 firm.
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Selling elevators for the disabled in VA...Do we charge sales tax?

Resolved Question:

Selling elevators for the disabled in VA...Do we charge sales tax?
Submitted: 1 year ago.
Category: Tax
Expert:  PDtax replied 1 year ago.
Welcome to the site. I will be helping you today.

In Virginia, the manufacturer of that elevator has to pay sales tax on the materials used to manufacture the elevator. That is the final amount of sales tax paid, since the installation of the elevator is exempt from sales tax.

http://www.tax.Virginia.gov/site.cfm?alias=BusinessFAQ2 is the web page link to this and more information if needed.

If this answers your question, please leave positive feedback. if you need more assistance, please ask. Thanks from Just Answer.

Customer: replied 1 year ago.
I'm not the manufacturer. We buy from the manufacturer and then we install. Wondering if the client who receives the elevator should pay sales tax?
Expert:  PDtax replied 1 year ago.
So does the manufacturer charge you sales tax on your purchase of the elevator inventory? Do you charge a separate installation charge when you install, or does someone else install?
Customer: replied 1 year ago.
We do not get charged tax from the manufacturer. We do charge a separate charge for installation as we do install them. In Virginia we do not charge sales tax for equipment used by the disabled, but was not completely sure about elevator specifically.
Expert:  PDtax replied 1 year ago.
http://www.policylibrary.tax.Virginia.gov/OTP/policy.nsf/0/755137127828f18d852569f2006b58c1?OpenDocument is the link to the:

Virginia Tax Administrative Code
Code Section: 23VAC10-210-410
Tax Type: Retail Sales and Use Tax
Brief Description: Contractors respecting real estate
Topics: Definitions

(Expert - this seems to cover the installation of tangible property that you purchase, and if you bill separately for installation):

Items G. and H. seem to cover your question, depending on how you invoice installation. Again, from the VA Code cited above:

G. Contractor or retailer selling and installing tangible personal property that becomes real property after installation (including fences, venetian blinds, window shades, awnings, storm windows and doors, floor coverings, cabinets, kitchen equipment, window air conditioning units, and other like or comparable items).

A person selling and installing tangible personal property that becomes real property after installation is generally considered a contractor, except that a retailer 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 is not classified as a using or consuming contractor with respect to them.

For purposes of this subsection only, a "retailer" shall be deemed to be any person who maintains a retail or wholesale place of business, an inventory of the aforementioned items and/or materials which enter into or become a component part of the aforementioned items, and who performs installation as part of or incidental to the sale of the aforementioned items. As so defined, a retailer is not classified as a using or consuming contractor with respect to installations of the aforementioned items. A retailer must treat such transactions as taxable sales except that installation charges when separately stated on an invoice are exempt from tax.

Persons who are not classified as retailers within the definition set forth above and who sell and install fences, venetian blinds, etc., are deemed to be contractors and must pay the sales tax on such items at the time of purchase.

"Floor coverings" (as distinguished from the floors themselves) include rugs, mats, padding, wall-to-wall carpets when installed by the tack strip or stretch-in methods, and other floor coverings which are not glued, cemented, or otherwise permanently attached to the floor below. Persons selling and installing floor coverings which become permanently attached to floors are deemed to be using or consuming contractors with respect to such items. Such floor coverings include carpet, wood block, cork, tile, linoleum, and vinyl floor coverings when glued, cemented or otherwise permanently attached to floors or plywood and concrete subflooring.

Both retailers and contractors are deemed to be the users or consumers of supplies used in installing tangible personal property that becomes real property after installation. Therefore, retailers and contractors are subject to the tax on their purchases of tacks, stripping, glue, cement, and other supplies purchased.

Subsection B is applicable to persons engaged as contractors with respect to the installation of fences, venetian blinds, etc., and also as sellers of such items at retail to customers, including contractors, on an uninstalled basis for use or consumption by them.

H. Retailer selling and installing tangible personal property. Any person who sells tangible personal property at retail and installs such property as part of or incidental to the sale is a retailer and is required to add the sales tax to the sales price. The tax does not apply to installation charges when separately stated on a sales invoice. If the installation charge is not separately stated, the tax must be computed on the total charge.

Retailers are deemed to be the users or consumers of all supplies used in installing tangible personal property. Therefore, retailers are subject to the tax on all such supplies purchased.

It does not appear there is a separate exemption for disabled customers.

Thanks again from Just Answer.
PDtax, CPA firm owner
Category: Tax
Satisfied Customers: 1891
Experience: 32 years tax experience, including four years at a Big 4 firm.
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