23 Va. Admin. Code § 10-210-6000
Where the use tax is applicable, separately stated transportation charges are also excludable in the computation of cost price.
The following example illustrate the application of the tax to transportation and delivery charges.
Example 1: Company A orders furniture from a manufacturer for Purchaser B. The furniture is delivered to A's place of business by the manufacturer who separately states the transportation charges. Because the furniture is for resale, no tax is applicable to any portion of the charge from the manufacturer to A. A then delivers the furniture to B's home and separately states the charges for delivery from the store to B. These charges do qualify as "transportation-out" and are not subject to the tax. However, the charges from the manufacturer to A represent "transportation-in" to the seller, are a part of the cost of the furniture, and are included in the sales price of the furniture subject to the tax, even if separately stated on the invoice to the customer.
Example 2: Purchaser P places an order for an auto part through Dealer D. D orders the part from manufacturer M who ships the item directly to P and bills D for the cost of the part plus separately stated transportation charges. D in turn bills P for the part and separately states the transportation charges from M. Providing that D does not mark-up the transportation charges, the tax will not apply to the charges.
For "sales price," see 23VAC10-210-4000.
23 Va. Admin. Code § 10-210-6000
Statutory Authority
§§ 58.1-203 and 58.1-609.5(3) of the Code of Virginia.