Virginia Tax Commissioner Determines Auditor Correctly Assessed Sales Tax on Purchases of Packaging Materials

The Virginia Tax Commissioner March 22 determined in a letter ruling that an auditor correctly assessed sales and use tax on purchases of packaging materials. Taxpayer warehoused retailers’ inventory and repackaged inventory items to fulfill orders placed by the retailers’ customers. The retailers arranged and paid for the packages to be picked up from Taxpayer’s facilities. The auditor assessed the tax on cartons, tape, labels, boxes, and polybags used for repackaging. Taxpayer argued that it purchased the packaging materials for resale and that it charged the retailers for the costs of the packaging materials. The commissioner noted that Taxpayer was ...