Virginia Tax Commissioner Determines Taxpayer’s Off-Road Diesel Fuel Purchases Exempt From Retail Sales Tax

The Virginia Tax Commissioner July 7 determined in a letter ruling that Taxpayer was entitled to an abatement of retail sales and use tax assessed on off-road diesel fuel purchases. Taxpayer, a contractor specialized in excavating and grading services, protested the assessment and requested abatement, contending that the sales tax was included in the fuels sale price and already paid. The commissioner found that: 1) fuels not used in highway vehicles are exempt from the state’s fuels tax; 2) the fuels exempt from the fuels tax are subject to the sales tax; 3) off-road fuel sales at issue were subject ...