Safe Rental Not the True Object of Armored Car Service in Virginia

Tuesday, November 12th, 2013


The Virginia Tax Commissioner recently released a ruling that determined a taxpayer's provision of safes along with its armored car services was not taxable.

The taxpayer provides armored car services. It provides its customers with the use of safes. The taxpayer retains title to the safes. When an armored car service contract ends, the taxpayer will recover the safe from its customer. There is no separate charge for the use of the safe.

Virginia generally taxes rentals of tangible personal property. It does not tax armored car services. When a transaction includes taxable property and a non-taxable service, Virginia looks at which part is the true object of the transaction. If the true object is the service, the transaction is not taxable. If it is the property, the transaction is taxable.

The tax commissioner held that the true object here was the armored car services. The use of the safe was merely an extension of the security and transportation services. It was not the object of the transaction. The transaction was therefore not taxable.

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