Virginia Contractors Could Become Liable for Sales Tax on Installations

August 24th, 2023 by Editor

Virginia contractors who sell and install specific personal property, such as doors and windows, would be categorized as final consumers of the property, according to a revised rule introduced by the state’s tax department.

Outlined in a proposed fast-track rule amendment, which has been published in the Virginia Register of Regulations, the Department of Taxation (DOT) states that contractors would be deemed the final users of items, such as doors, windows, fences, cabinets and other property. Unless otherwise noted, DOT states that contractors would be liable for applicable sales and use taxes when the items become part of real property.

DOT defines contractors as “any person who contracts to perform construction, reconstruction, installation, repair, or any other service with respect to real estate or fixtures thereon, including highways, and in connection therewith to furnish tangible personal property, whether such person is a prime contractor or subcontractor.”

The public comment deadline ends Sept. 15, 2023. The effective date is Sept. 30, 2023.

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