                                 CODE OF VIRGINIA

SALES PRESUMED SUBJECT TO TAX; EXEMPTION CERTIFICATES; INTERNET ACCESS SERVICE
PROVIDERS (§ 58.1-657)

A. All sales are subject to the tax until the contrary is established. The
burden of proving that a sale of communications services is not taxable is upon
the communications services provider unless he takes from the taxpayer a
certificate to the effect that the service is exempt under this chapter.

B. The exemption certificate mentioned in this section shall relieve the person
who obtains such a certificate from any liability for the payment or collection
of the tax, except upon notice from the Tax Commissioner that the certificate is
no longer acceptable. The exemption certificate shall be signed, manually or
electronically, 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 communications services sold or to
be sold under a blanket exemption certificate; and shall be substantially in the
form as the Tax Commissioner may prescribe.

C. In the case of a provider of Internet access service that purchases a
telecommunications service to provide Internet access, the Internet access
provider shall give the communications service provider a certificate of use
containing its name, address and signature, manually or electronically, of an
officer of the Internet access service provider. The certificate of use shall
state that the purchase of telecommunications service is being made in its
capacity as a provider of Internet access in order to provide such access. Upon
receipt of the certificate of use, the communications service provider shall be
relieved of any liability for the communications sales and use tax related to
the sale of telecommunications service to the Internet access service provider
named in the certificate. In the event the provider of Internet access uses the
telecommunications service for any taxable purpose, that provider shall be
liable for and pay the communications sales and use tax directly to the
Commonwealth in accordance with &#xA7; 58.1-658.

D. If a taxpayer who holds a certificate under this section and makes any use of
the service other than an exempt use or retention, demonstration, or display
while holding the communications service for resale in the regular course of
business, such use shall be deemed a taxable sale by the taxpayer as of the time
the service is first used by him, and the cost of the property to him shall be
deemed the sales price of such retail sale.

HISTORY: 2006, c. 780.