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2004 SESSION
048362332Be it enacted by the General Assembly of Virginia:
1. That § 58.1-610 of the Code of Virginia, as it shall become effective, is amended and reenacted as follows:
§ 58.1-610. (Effective July 1, 2004) Contractors.
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 § 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 § 58.1-609.6; the governmental exclusions set out in subdivision 4 of § 58.1-609.1; the agricultural exclusions set forth in subdivision 1 of § 58.1-609.2; or the exclusion for baptistries set forth in former subdivision 2 of § 58.1-609.8.
C. Any person who contracts to perform services for and furnishes tangible personal property for use or consumption by the Commonwealth, any political subdivision of the Commonwealth, or the United States, shall be exempt from the tax levied under this chapter on such tangible personal property, provided that the Commonwealth, the political subdivision, or the United States certifies that title to such tangible personal property will pass to such governmental entity.
CD. 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.
DE. 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. Any person selling fences, venetian blinds,
window shades, awnings, storm windows and doors, locks and locking devices,
floor coverings (as distinguished from the floors themselves), cabinets,
kitchen equipment, window air conditioning units or other like or comparable
items, shall be deemed to be a retailer of such items and not a using or
consuming contractor with respect to them, whether he sells to and installs
such items for contractors or other customers and whether or not such retailer
fabricates such items.
EF. 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 § 58.1-609.3, the exclusion for baptistries set out in
former subdivision 2 of § 58.1-609.8, or the partial exclusion for the sale of
modular buildings as set out in § 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.
FG. 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.