The determination that an agency relationship existed was based upon the fact that the company's credit was never bound in any of the contested transactions. This determination was based upon the fact that the company was acting as the agent for its clients. In the Februruling that you cite, the department held that the company was not making sales to its clients. " (Emphasis added.) As the purchasing fee is directly related to the sale of tangible personal property by the taxpayer, it is included in the taxable "sales price" of the property.
#NAICS CODE FOR INTERIOR DESIGN CODE#
"Sales price", upon which the sales tax is based, is defined under Virginia Code §58.1-602.17 as, "the total amount for which tangible personal property or services are sold, including any services that are a part of the sale. It is only imposed when the taxpayer sells tangible personal property to its clients and the amount of the charge is a percentage of the price of the property sold. The "purchasing fee" is directly related to the sale of tangible personal property by the taxpayer. In this case, the charges designated as design fees and consulting fees are fees for services not connected with the sale of tangible personal property therefore, these charges are not taxable. The charge for these services will remain exempt as long as the charge for services is billed separately from the tangible personal property. These otherwise exempt services would only be taxable if the interior decorator (1) goes beyond the rendition of services and sells tangible personal property and (2) makes a lump sum charge for both of these otherwise exempt services and for tangible personal property. When a decorator makes a lump sum charge for services and furnishes tangible personal property, the tax applies to the total charge, unless the charge for services is billed separately from the tangible personal property.Īs set forth in the above regulation, the tax does not apply to the charges made by an interior decorator which are solely for design and consulting services. When a decorator goes beyond the rendition of services and sells tangible personal property, the decorator must register as a dealer and collect and pay the tax on retail sales.