2006 Code of Virginia § 58.1-623 - Sales or leases presumed subject to tax; exemption certificates

58.1-623. Sales or leases presumed subject to tax; exemption certificates.

A. All sales or leases are subject to the tax until the contrary isestablished. The burden of proving that a sale, distribution, lease, orstorage of tangible personal property is not taxable is upon the dealerunless he takes from the taxpayer a certificate to the effect that theproperty is exempt under this chapter.

B. The certificate mentioned in this section shall relieve the person whotakes such certificate from any liability for the payment or collection ofthe tax, except upon notice from the Tax Commissioner that such certificateis no longer acceptable. Such certificate shall be signed by and bear thename and address of the taxpayer; shall indicate the number of thecertificate of registration, if any, issued to the taxpayer; shall indicatethe general character of the tangible personal property sold, distributed,leased, or stored, or to be sold, distributed, leased, or stored under ablanket exemption certificate; and shall be substantially in such form as theTax Commissioner may prescribe. If an exemption pertains to a nonprofitorganization, other than a nonprofit church, that has qualified for a salesand use tax exemption under 58.1-609.11, the exemption certificate shall bevalid until the scheduled expiration date stated on the exemption certificate.

C. If a taxpayer who gives a certificate under this section makes any use ofthe property other than an exempt use or retention, demonstration, or displaywhile holding the property for resale, distribution, or lease in the regularcourse of business, such use shall be deemed a taxable sale by the taxpayeras of the time the property or service is first used by him, and the cost ofthe property to him shall be deemed the sales price of such retail sale. Ifthe sole use of the property other than retention, demonstration, or displayin the regular course of business is the rental of the property while holdingit for sale, distribution, or lease, the taxpayer may elect to pay the tax onthe amount of the rental charged, rather than the cost of the property to him.

D. If a taxpayer gives a certificate under this section with respect to thepurchase of fungible goods and thereafter commingles these goods with otherfungible goods not so purchased, but of such similarity that the identity ofthe constituent goods in the commingled mass cannot be determined, sales ordistributions from the mass of commingled goods shall be deemed to be salesor distributions of the goods so purchased until a quantity of commingledgoods equal to the quantity of purchased goods so commingled has been sold ordistributed.

(Code 1950, 58-441.17; 1966, c. 151; 1984, c. 675; 1999, cc. 762, 776;2003, cc. 757, 758.)