Did Virginia state agencies and political subdivisions owe the tire recycling fee on tires, including replacement truck tires?

Subject

Virginia government tire purchases were exempt from the tire recycling fee

Plain-English summary

Virginia confirmed that state agencies and political subdivisions did not owe the tire recycling fee on any tires they purchased, including replacement truck tires. The requester asked whether an earlier Department policy remained valid after the former tire tax became the Virginia Tire Recycling Fee.

The fee statute applied the retail sales-and-use-tax chapter's rules and exemptions unless the tire-fee chapter provided otherwise. Because tangible personal property bought for use or consumption by the Commonwealth or its political subdivisions was sales-tax exempt, their tire purchases also qualified for the recycling-fee exemption.

The ruling identified one important limit. Replacement truck tires purchased by other entities that were exempt from retail sales and use tax remained subject to the tire recycling fee.

What this means for you

• The government-purchase exemption covered tires bought by Virginia agencies and political subdivisions.
• Replacement truck tires were included when the buyer was the Commonwealth or one of its political subdivisions.
• A different sales-tax-exempt buyer could still owe the fee on replacement truck tires.
• The ruling applied statutes in effect in 2010, so current provisions should be checked.

Common questions

Did the exemption cover replacement truck tires?

Yes, when Virginia or a Virginia political subdivision purchased them.

Were all sales-tax-exempt buyers treated the same?

No. The ruling said replacement truck tires bought by other sales-tax-exempt entities remained subject to the fee.

What earlier policy did Virginia reaffirm?

Public Document 91-101B, which had exempted tire purchases by the Commonwealth and its political subdivisions under the former tire tax.

Citations and references

• Va. Code §§ 58.1-644 and 58.1-609.1(4).
• Virginia Public Document 91-101B.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 10-44

Original ruling text

May 4, 2010

Re: Request for Ruling

Virginia Tire Recycling Fee

Dear *:

This is in reply to your correspondence in which you request an updated ruling in regard to the application of the Virginia tire recycling fee to state agencies and political subdivisions.

In Public Document (P.D.) 91-101B, the Department clarified its policy on the application of the Virginia Tire Tax to purchases of tires by state agencies and political subdivisions of the Commonwealth. In that document, the Tax Commissioner ruled that "all tires purchased by the Commonwealth of Virginia and any political subdivision thereof are exempt from the tax." The exemption included replacement truck tires.

Since P.D. 91-101B was issued, the tire tax has been changed to the Virginia Tire Recycling Fee. Chapter 6.1 of Title 58.1 of the Code of Virginia reflects this change; however, the provisions are similar to those under the Virginia Tire Tax and addressed in P.D. 91-101B. You ask if the policy set forth in P.D. 91-101B is still valid.

Pursuant to Va. Code § 58.1-644, "[t]he provisions of Chapter 6 (§ 58.1-600 et seq .) of this title [Title 58.1] apply to this chapter [Chapter 6.1], mutatis mutandis, except as herein provided and except that replacement truck tires shall be subject to the tax imposed pursuant to this chapter." [Inserts added.] Among other things, this means the exemptions from the retail sales and use tax are also applicable to the Virginia Tire Recycling Fee.

Virginia Code § 58.1-609.1 4 exempts from the retail sales and use tax tangible personal property for use or consumption by the Commonwealth or any political subdivision of the Commonwealth. Therefore, all tires (including replacement truck tires) purchased by Virginia state agencies and political subdivisions are exempt from the Virginia Tire Recycling Fee. Replacement truck tires purchased by other entities that are exempt from the retail sales and use tax remain subject to the Virginia Tire Recycling Fee.

I trust this ruling addresses your concerns. Questions regarding the Virginia Tire Recycling Fee may be directed to the Department's Office of Customer Services at (804) 367-8037.

Sincerely,

Janie E. Bowen

Tax Commissioner

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