                                 CODE OF VIRGINIA

DEFINITION OF MERCHANTS&#8217; CAPITAL (§ 58.1-3510)

A. Merchants&#8217; capital is defined as follows: Inventory of stock on hand;
daily rental vehicles as defined in &#xA7; 58.1-1735; and all other taxable
personal property of any kind whatsoever, except money on hand and on deposit
and except tangible personal property not offered for sale as merchandise, which
tangible personal property shall be reported and assessed as such.

B. For purposes of this section, a repair and service operation (i) carried on
as an integral part of and in conjunction with a business that is primarily
mercantile and (ii) the principal sales of such business are subject to the tax
imposed by Article 9 (&#xA7; 58.1-1734 et seq.) of Chapter 17 or to the tax
imposed by Chapter 24 (&#xA7; 58.1-2400 et seq.) of this title shall be deemed a
mercantile business, and all capital, as defined herein, including all repair
parts, materials and supplies associated with such repair and service operation
shall be deemed merchants&#8217; capital.

C. For purposes of valuing lottery tickets as part of a dealer&#8217;s
inventory, cost shall include only the compensation payable to a licensed sales
agent as provided by rules or regulations adopted by the Board consistent with
the provisions of subdivision 11 of subsection A of &#xA7; 58.1-4007. The value
of lottery tickets shall not be based on the cost of the tickets to the
merchant.

HISTORY: Code 1950, §§ 58-266.1, 58-833; 1950, p. 155; 1956, c. 242; 1964, cc.
424, 472; 1968, c. 619; 1970, cc. 231, 547; 1974, cc. 196, 438; 1975, cc. 23,
621; 1976, cc. 521, 719; 1977, cc. 56, 320; 1978, cc. 772, 799, 817; 1979, cc.
565, 568, 570; 1980, cc. 318, 736; 1981, cc. 145, 419, 636; 1982, cc. 348, 548,
552, 554, 558, 633; 1983, cc. 544, 554; 1984, cc. 247, 675, 695; 1987, cc. 572,
591; 1989, c. 589; 1990, c. 151; 1997, c. 853; 2009, cc. 480, 692; 2011, cc.
405, 639.