Agencies | Governor
Virginia Regulatory Town Hall
Agency
Department of Taxation
Board
Department of Taxation
chapter
Retail Sales and Use Tax [23 VAC 10 ‑ 210]
Action:
Amendment of the Retail Sales and Use Tax Government Contractors regulation section to conform to Item 268 of the 2006 Budget Bill.
 
General Information
Action Summary Item 268 of the 2006 Appropriations Act (House Bill 5002, Chapter 3, 2006 Acts of Assembly, Special Session I) changed the application of the Retail Sales and Use Tax “true object test,” as it applies to businesses contracting with the United States, the Commonwealth, or any political subdivision or instrumentality thereof. The true object test is used to determine the application of the Retail Sales and Use Tax in transactions that involve the provision of both tangible personal property and services. Prior to this legislation, government contractors applied the “true object test” to the contract between the contractor and the government entity to determine the application of the Retail Sales and Use Tax. Item 268 requires that, effective July 1, 2006, for task orders, work orders, or statements of work executed on or after July 1, 2006, application of the sales and use tax to government contracts is determined based upon the true object of each separate task order, work order, or statement of work, issued in furtherance of the contract, rather than the overall contract. This regulatory action amends the Government Contractor regulation as mandated by Item 268.
Chapters Affected Only affects this chapter.
Exempt from APA No, this action is subject to the Administrative Process Act and the standard executive branch review process.
RIS Project Yes  [000745]
Associated Mandates True Object Test for Government Contractors
Note This action is not intended to satisfy the requirement that an entire regulation be reviewed every 4 years.
 
Stages
Stages associated with this regulatory action.
Stage ID Stage Type Status
4202 Emergency/NOIRA Stage complete. Emergency regulation expired on 7/23/2008.
4587 Fast-Track Stage complete. This regulation became effective on 10/6/2008.
 
Contact Information
Name / Title: Kristen Peterson  / Tax Policy Analyst
Address: PO Box 27185
Richmond, VA 23261-7185
Email Address: kristen.peterson@tax.virginia.gov
Phone: (804)371-2340    FAX: (804)371-2355