Form Ct-2 - Guidelines And Rules For The Virginia Communications Taxes (Page 6 of 16) in pdf

Exemption Certificates

Exempt Entities

All sales of communications services are subject to

Any entity that was exempted from the local consumer

the tax until the contrary is established. A provider

utility taxes (LCUT) by any city, county or town in

is required to collect the communications sales tax

Virginia on January 1, 2006 will be exempt from

unless the provider receives a properly executed

the communications sales tax. (Source: Code of Va.

exemption certificate from the purchaser stating that

§ 58.1-648 C) On January 1, 2006, under state law,

the service is exempt from the communications sales

localities had the option of providing exemptions for:

tax. The exemption certificate will relieve the provider

•

Public safety answering points. (Source: Code of

who obtains it from any liability for the payment or

Va. § 58.1-3812 E)

collection of the tax, except upon notice from TAX that

•

Any subscriber to individual telephone service

the certificate is no longer acceptable. In the event that

who resides in a nursing home or similar adult care

a provider fails to collect the communications sales tax

facility. (Source: Code of Va. § 58.1-3813.1 C)

due on the sale of taxable communications services,

•

Any utilities consumed on property designated or

the provider is liable for the payment of the tax. The

classified as exempt from property taxes pursuant

exemption certificate must:

to Article X, Section 6 a 2 of the Constitution of

•

Be signed, manually or electronically, by the

Virginia) (real estate and personal property owned

purchaser;

and exclusively occupied or used by churches or

•

Bear the name and address of the purchaser;

religious bodies for religious worship or for the

•

Indicate the number of the registration certificate,

residences of their ministers) or Article X, Section

if any, issued to the purchaser;

6 a 6 of the Constitution of Virginia (property used

by its owner for religious, charitable, patriotic,

•

Indicate the general character of the communications

historical, benevolent, cultural, or public park

services sold or to be sold under a blanket exemption

and playground purposes, as may be provided

certificate; and

by classification or designation by an ordinance

•

Be substantially in the form prescribed by TAX.

adopted by the local governing body). This

(Source: Code of Va. § 58.1-657)

exemption did not apply to the local E-911 tax on

If a purchaser who holds an exemption certificate makes

landline telephone service. Any locality providing

any use of the service other than an exempt use while

an exemption for the local consumer utility tax

holding the communications service for resale in the

on consumers of landline telephone service was

regular course of business, such use will be deemed a

required to provide the telephone account numbers

taxable sale by the purchaser as of the time the service is

of all exempted organizations to all service providers

first used by the purchaser, and the cost of the property

required to collect the tax. (Source: Code of Va. §

to the purchaser will be deemed the sales price of such

58.1-3816.2)

retail sale. (Source: Code of Va. § 58.1-657)

Additionally, the City of Manassas was authorized to

In the case of a provider of Internet access service

provide an exemption for any church or religious body

that purchases a communications service to provide

entitled to an exemption pursuant to Code of Va. §

Internet access, the Internet access provider must give

58.1-3650 et seq. The City of Manassas was required to

the communications service provider a certificate of use

provide the telephone account numbers of all exempted

containing its name, address and signature, manually

churches and religious bodies to all service providers

or electronically, of an officer of the Internet access

required to collect the tax. (Source: Code of Va. §

service provider. The certificate of use must state

58.1-3812 F)

that the purchase of communications service is being

A provider will not be liable for the payment or

made in its capacity as a provider of Internet access

collection of the communications sales tax with respect

in order to provide such access. Upon receipt of the

to any entity that it allowed an LCUT exemption on

certificate of use, the provider will be relieved of any

January 1, 2006 if the provider documents that the

liability for the communications sales tax related to the

entity was allowed an LCUT exemption on January 1,

sale of communications service to the Internet access

2006 by maintaining a list of all such exempt entities

service provider named in the certificate. In the event

or maintaining a notation in its records stating that the

the Internet access provider uses the communications

entity was allowed an LCUT exemption on January 1,

service for any taxable purpose, the provider of Internet

2006 along with the name of the provider that allowed

access will be liable for and pay the communications

the exemption and the entity’s account number.

sales tax directly to the Commonwealth in accordance

with § 58.1-658. (Source: Code of Va. § 58.1-657)

CT-2 W

REV 11/06

Page 6

Form Ct-2 - Guidelines And Rules For The Virginia Communications Taxes Page 6

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