                                 CODE OF VIRGINIA

SALES OR LEASES PRESUMED SUBJECT TO TAX; EXEMPTION CERTIFICATES (§ 58.1-623)

A. All sales or leases are subject to the tax until the contrary is established.
The burden of proving that a sale, distribution, lease, or storage of tangible
personal property is not taxable is upon the dealer unless he takes from the
taxpayer a certificate to the effect that the property is exempt under this
chapter. However, the sale or distribution of cigarettes shall be subject to the
provisions of &#xA7; 58.1-623.2 and require a cigarette exemption certificate
issued pursuant to &#xA7; 58.1-623.2.

B. The certificate mentioned in this section shall relieve the person who takes
such certificate from any liability for the payment or collection of the tax,
except upon notice from the Tax Commissioner that such certificate is no longer
acceptable. Such certificate shall be signed by and bear the name and address of
the taxpayer; shall indicate the number of the certificate of registration, if
any, issued to the taxpayer; shall indicate the general character of the
tangible personal property sold, distributed, leased, or stored, or to be sold,
distributed, leased, or stored under a blanket exemption certificate; and shall
be substantially in such form as the Tax Commissioner may prescribe. If an
exemption pertains to a nonprofit organization, other than a nonprofit church,
that has qualified for a sales and use tax exemption under &#xA7; 58.1-609.11,
the exemption certificate shall be valid until the scheduled expiration date
stated on the exemption certificate.

C. If a taxpayer who gives a certificate under this section makes any use of the
property other than an exempt use or retention, demonstration, or display while
holding the property for resale, distribution, or lease in the regular course of
business, such use shall be deemed a taxable sale by the taxpayer as of the time
the property or service is first used by him, and the cost of the property to
him shall be deemed the sales price of such retail sale. If the sole use of the
property other than retention, demonstration, or display in the regular course
of business is the rental of the property while holding it for sale,
distribution, or lease, the taxpayer may elect to pay the tax on the 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 the
purchase of fungible goods and thereafter commingles these goods with other
fungible goods not so purchased, but of such similarity that the identity of the
constituent goods in the commingled mass cannot be determined, sales or
distributions from the mass of commingled goods shall be deemed to be sales or
distributions of the goods so purchased until a quantity of commingled goods
equal to the quantity of purchased goods so commingled has been sold or
distributed.

E. If a taxpayer fails to give the dealer at the time of purchase an exemption
certificate previously issued by the Department, no interest shall be paid on a
subsequent refund claim for any period prior to the date the taxpayer makes a
complete refund claim with the Department. This subsection shall not apply to
transactions exempted under self-executing certificates of exemption not issued
to a specific taxpayer by the Department.

HISTORY: Code 1950, § 58-441.17; 1966, c. 151; 1984, c. 675; 1999, cc. 762,
776; 2003, cc. 757, 758; 2016, cc. 303, 484; 2017, cc. 112, 453.