Virginia Administrative Code › Title 23 - TAXATION › Agency 10 - DEPARTMENT OF TAXATION › Chapter 210 - RETAIL SALES AND USE TAX › Section 23VAC10-210-2070 - Situs of sale

Current through Register Vol. 40, No. 24, July 15, 2024
A.
				Definitions. The following words and terms when used in this section shall have
				the following meanings unless the context clearly indicates otherwise:
"Hampton Roads Region" means the Counties of Isle of Wight,
				  James City, Southampton, and York and the Cities of Chesapeake, Franklin,
				  Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach,
				  and Williamsburg.
"Local sales and use tax" means the local retail sales and
				  use tax imposed by ordinance in all Virginia cities and counties at the rate of
				  1.0%.
"Northern Virginia Region" means the Counties of Arlington,
				  Fairfax, Loudoun, and Prince William and the Cities of Alexandria, Fairfax,
				  Falls Church, Manassas, and Manassas Park.
"Place of business" means the business location in Virginia
				  that first takes the purchaser's order, whether in person, by purchase order,
				  or by letter or telephone, regardless of the location of the merchandise or the
				  point of acceptance of the order or shipment. "Place of business" includes a
				  store, a sales or other office, or any warehouse.
"Regional sales and use tax" means the additional state
				  retail sales and use tax imposed in the Hampton Roads Region and the Northern
				  Virginia Region at the rate of 0.7%.
B. Sourcing.
1. Sales tax. Sales by dealers located in
				Virginia are generally subject to the sales tax and sourced to the city or
				county of the place of business of the dealer collecting the tax, without
				regard to the city or county of possible use by the purchaser. The sale of
				tangible personal property at the place of business of the seller is sourced to
				that place of business, even if the goods are ultimately delivered to the
				purchaser at another location. The remote sale (by telephone, Internet, or mail
				order) of tangible personal property from an in-state dealer with a place of
				business in Virginia is sourced to the location in which the order was first
				taken, even if the goods are ultimately delivered to the purchaser at another
				location. Accordingly, an order placed for merchandise in a store in County A,
				forwarded by the store in County A to a sales office in City B and shipped to
				the purchaser from a warehouse or branch store in County C is a sale made in
				County A.
Example 1: Dealer A makes a sale to a customer at his place
				  of business in the City of Fairfax in the Northern Virginia Region. Dealer A
				  has the goods delivered to the customer in Loudoun County in the Northern
				  Virginia Region. The sale is sourced to the City of Fairfax. Dealer A should
				  collect 6.0% (4.3% state, 0.7% Regional, and 1.0% local) sales tax on the
				  purchase. The 1.0% local tax should be sourced to the City of Fairfax.
Example 2: Dealer B makes a sale to a customer at his place
				  of business in Loudoun County in the Northern Virginia Region, but the goods
				  are delivered to the customer in Roanoke County, which is not in the Northern
				  Virginia or Hampton Roads Region. The sale is sourced to Loudoun County, in the
				  Northern Virginia Region. Dealer B should collect 6.0% sales tax on the
				  purchase. The 1.0% local tax should be sourced to Loudoun County.
Example 3: Customer C orders merchandise from Dealer D by
				  placing a call to Dealer D's store, located in the City of Newport News in the
				  Hampton Roads Region. The goods will be shipped to Customer C's residence that
				  is neither in the Hampton Roads nor the Northern Virginia Region. The sale is
				  sourced to the City of Newport News in the Hampton Roads Region. Dealer D
				  should collect 6.0% (4.3% state, 0.7% Regional, and 1.0% local) sales tax on
				  the purchase. The 1.0% local tax should be sourced to the City of Newport
				  News.
Example 4: Customer E orders merchandise from Dealer F's
				  website, which has a place of business and warehouse in North Carolina. Dealer
				  F is registered to collect the Virginia retail sales and use tax. The invoice
				  indicates that the merchandise will be shipped to Customer E's residence in the
				  City of Richmond, which is outside the Northern Virginia and Hampton Roads
				  Regions. Because Dealer F's place of business and warehouse are located outside
				  of Virginia, the sale is sourced to the location in which the merchandise is
				  delivered, the City of Richmond, which is outside the Northern Virginia and
				  Hampton Roads Regions. Dealer F should collect 5.3% (4.3% state and 1.0% local)
				  sales tax on the purchase. The 1.0% local tax should be sourced to the City of
				  Richmond.
2. Use tax
				collected by dealers. The use tax is generally sourced to the city or county
				where the goods are used or consumed by the purchaser, or stored for use or
				consumption. An out-of-state dealer who has a place of business in Virginia is
				required to register as a dealer at that place. If the same dealer, at a place
				of business outside this state, receives orders from Virginia customers
				directly and not through a place of business in Virginia, he must also register
				as an out-of-state dealer. Out-of-state dealers who hold Certificates of
				Registration to collect the use tax from their customers must source sales into
				Virginia according to the city or county of destination.
Example 1: Dealer A makes Internet sales from his place of
				  business in North Carolina. Dealer A holds a Certificate of Registration to
				  collect the use tax from Virginia customers. Dealer A makes a sale and ships
				  the goods to the City of Fairfax. Dealer A would collect 6.0% (4.3% state, 0.7%
				  Regional, and 1.0% local) use tax on the sale. The 1.0% local tax should be
				  sourced to the City of Fairfax.
3. Consumer use tax. Generally, Virginia
				residents and others purchasing goods from a business that does not collect the
				Virginia retail sales and use tax or purchasing goods tax-free while outside
				Virginia and bringing them into Virginia are subject to the consumer use tax.
				The use tax is sourced to the city or county where the goods are used or
				consumed by the purchaser, or stored for use or consumption. For more
				information on use tax, see
				23VAC10-210-6030.
Any person purchasing tangible personal property in other
				  areas of the Commonwealth for use in either the Hampton Roads Region or the
				  Northern Virginia Region is not responsible for the regional consumer use tax
				  if the retail sales and use tax has been paid on the purchase.
Example 1: Customer A, who is located in the City of Fairfax,
				  makes an Internet purchase of tangible personal property from a West Virginia
				  dealer who does not hold a Virginia Certificate of Registration and does not
				  collect the use tax from Virginia customers. Customer A must remit 6.0% (4.3%
				  state, 0.7% regional, and 1.0% local) use tax on the purchase.
Example 2: Customer B is located in the City of
				  Charlottesville. Customer B buys equipment in Charlottesville that is intended
				  for use performing a construction contract in Fairfax County and pays 5.3%
				  sales tax. Customer B subsequently moves the equipment into Fairfax County.
				  Customer B does not owe the 0.7% regional use tax on the equipment as the sales
				  tax has been paid.