                                 CODE OF VIRGINIA

CONTRACTORS (§ 58.1-610)

A. Any person who contracts orally, in writing, or by purchase order, to perform
construction, reconstruction, installation, repair, or any other service with
respect to real estate or fixtures thereon, and in connection therewith to
furnish tangible personal property, shall be deemed to have purchased such
tangible personal property for use or consumption. Any sale, distribution, or
lease to or storage for such person shall be deemed a sale, distribution, or
lease to or storage for the ultimate consumer and not for resale, and the dealer
making the sale, distribution, or lease to or storage for such person shall be
obligated to collect the tax to the extent required by this chapter.

B. Any person who contracts to perform services in this Commonwealth and is
furnished tangible personal property for use under the contract by the person,
or his agent or representative, for whom the contract is performed, and a sales
or use tax has not been paid to this Commonwealth by the person supplying the
tangible personal property, shall be deemed to be the consumer of the tangible
personal property so used, and shall pay a use tax based on the fair market
value of the tangible personal property so used, irrespective of whether or not
any right, title or interest in the tangible personal property becomes vested in
the contractor. This subsection, however, shall not apply to the industrial
materials exclusion or the other industrial exclusions set out in &#xA7;
58.1-609.3, including those set out in subdivisions 2, 3 and 4 thereof; the
media-related exemptions set out in subdivision 2 of &#xA7; 58.1-609.6; the
governmental exclusions set out in subdivision 4 of &#xA7; 58.1-609.1; the
agricultural exclusions set forth in subdivisions 1 and 8 of &#xA7; 58.1-609.2;
or the exclusion for baptistries set forth in &#xA7; 58.1-609.10.

C. Any person who contracts orally, in writing, or by purchase order to perform
any service in the nature of equipment rental, and the principal part of that
service is the furnishing of equipment or machinery which will not be under the
exclusive control of the contractor, shall be liable for the sales or use tax on
the gross proceeds from such contract to the same extent as the lessor of
tangible personal property.

D. Tangible personal property incorporated in real property construction which
loses its identity as tangible personal property shall be deemed to be tangible
personal property used or consumed within the meaning of this section.

E. Nothing in this section shall be construed to (i) affect or limit the resale
exclusion provided for in this chapter, or the industrial materials and other
industrial exclusions set out in &#xA7; 58.1-609.3, the exclusion for
baptistries set out in &#xA7; 58.1-609.10, or the partial exclusion for the sale
of modular buildings as set out in &#xA7; 58.1-610.1, or (ii) impose any sales
or use tax with respect to the use in the performance of contracts with the
United States, this Commonwealth, or any political subdivision thereof, of
tangible personal property owned by a governmental body which actually is not
used or consumed in the performance thereof.

F. Notwithstanding the other provisions of this section, any person engaged in
the business of furnishing and installing locks and locking devices shall be
deemed a retailer of such items and not a using or consuming contractor with
respect to them.

G. Notwithstanding the other provisions of this section, any person or entity
primarily engaged in the business of furnishing and installing tangible personal
property that provides electronic or physical security on real property for the
use of a financial institution, shall be deemed a retailer of such personal
property, including when such personal property is installed on real property
not for the use of a financial institution.

HISTORY: Code 1950, § 58-441.15; 1966, c. 151; 1973, c. 224; 1977, c. 591;
1978, c. 207; 1980, cc. 611, 627; 1984, c. 675; 1986, c. 605; 1989, c. 739;
1992, cc. 404, 415; 1993, c. 310; 2000, c. 425; 2003, cc. 757, 758; 2010, c.
119; 2011, cc. 360, 851; 2017, cc. 436, 449; 2023, cc. 516, 517.