Certain Retailers Responsible for Paying Tax on Items They Install

Jul 10th, 2017

Effective July 1, 2017, Virginia enacted a new law requiring certain retailers providing installation services to pay tax on the items they install.

Previously, Virginia required retailers that sell and install fences, venetian blinds, window shades, awnings, storm windows and doors, floor coverings, cabinets, countertops, kitchen equipment, window air conditioning units, or similar items to collect sales tax from their customers. The retailers would purchase these items tax-free for resale. Contractors, however, paid tax on the items and did not collect tax from customers.

The new law treats retailers the same as contractors for these installations. Both retailers and contractors must either pay sales tax when they buy the items or pay use tax when they install the items.

https://tax.virginia.gov/sites/default/files/inline-files/tb-17-8-real-property-contractors-sales-tax-guidelines.pdf