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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department of Taxation
Chapter 210. Retail Sales and Use Tax
12/26/2024

23VAC10-210-380. Common carriers of property or passengers by railway.

A. The following words and terms, when used in 23VAC10-210-380 through 23VAC10-210-387, shall have the following meanings, unless the context clearly indicates otherwise:

"Common carrier" means a railway which holds itself out to carry goods by rail for hire for anyone who would employ it and/or which holds itself out to carry all proper persons who apply to be passengers. A private carrier by rail is not a common carrier within the meaning of this regulation and is not entitled to an exemption from the tax.

"Use or consumption directly" means those activities that are an integral part of the rendition of common carrier service by a railway. Items of tangible personal property that are used or consumed directly in the rendition of common carrier service by a railway are those that are both indispensable to the actual provision of the transportation service and use/or consumed immediately in the performance of such service. The fact that a particular item may be considered essential to the rendering of such transportation service because its use is required either by law or practical necessity does not, of itself, mean that the property is used directly in the rendition of the service. As described in 23VAC10-210-382, items of tangible personal property which are to be incorporated into and will become a part of a railway's owned or leased transportation system are deemed to be used directly in the rendition of its public service; however, tangible personal property used in general and administrative activities and activities not related to a railway's transportation system are deemed not to be used directly in the rendition of its public service. The term "use" or "consumption directly" includes tangible personal property used in the repair and maintenance of a railway's transportation system to keep it in operation.

B. Tangible personal property purchased or leased by a common carrier of property or passengers by railway for use or consumption directly in the rendition of its public service is exempt from the sales and use tax.

Statutory Authority

§§ 58.1-203 and 58.1-609.3(3) of the Code of Virginia.

Historical Notes

Derived from VR630-10-24.4 §§ 1, 2, eff. February 1, 1987.

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