Administrative Code

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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department Of Taxation
Chapter 210. Retail Sales and Use Tax
2/25/2021

23VAC10-210-700. Harvesting of forest products.

A. Definitions. The following terms, when used in this regulation, shall have the following meanings, unless the context clearly indicates otherwise:

"Direct use" or "directly used" means those items that are both indispensable to the harvesting of forest products and which are used immediately in the harvesting of forest products.

"Harvester" means a person who engages in the business of harvesting forest products.

"Harvesting of forest products" means the business of severing products from forests for sale or for use as a component part of a product to be sold.

B. Exempt items. A harvester's purchase of machinery and tools and their repair parts, fuel, power, energy, or supplies used directly in the harvesting of forest products for sale or for use as a component part of a product to be sold is exempt from the tax.

C. Direct use. A harvester's direct use of machinery and tools, fuel, power, energy, or supplies in the harvesting of the forest products is exempt from the tax. A harvester's use of machinery and tools, fuel, power, energy, or supplies indirectly in the harvesting of forest products or in any other activity is subject to the tax.

Repair or replacement parts used to repair, restore, or refurbish machinery and tools which are directly used in the harvesting of forest products are also exempt from the tax.

D. Clearing activities. Machinery and tools, etc., used in the clearing of land or construction of roads to open up a logging site, the clearing of trash from the harvesting site, or the transportation of the severed product from the harvesting site are not exempt from the tax since such items are not used directly in harvesting forest products.

E. Typical exempt items. A harvester may purchase the following items exempt of the tax if he uses such items directly in his harvesting activities:

1. Axe;

2. Bulldozer (Crawler tractor with a rear mounted winch with cables) - if used to pull logs out of the woods;

3. Cables - if used to pull logs out of the woods;

4. Chain saw;

5. Fork lift or lift truck used to move logs at harvesting site;

6. Hydraulic slasher;

7. Log cart;

8. Oil - if used in tractor or other log handling equipment;

9. Repair parts for machinery and tools used directly in the harvesting of forest products;

10. Saw blades;

11. Saws;

12. Shearers;

13. Skidders;

14. Tires - if used on bulldozer or tractor to pull logs out of the woods;

15. Tractor; and

16. Wedges.

F. Typical taxable items. The following items are subject to the tax even when used by a harvester of forest products:

1. Bulldozer (Crawler tractor with a front mounted blade) when used to open roads into woods for trucks or to clear mill site of trash;

2. Cables - used to secure logs to a truck for transportation;

3. Fuel tanks;

4. Grading machine;

5. Gravel, culverts and similar items used in opening and constructing roads;

6. Oil - if used in trucks that transport the logs from forest to mill or in equipment used to open roads or remove trash;

7. Repair parts for licensed and unlicensed trucks;

8. Repair tools;

9. Tires - if used on vehicles for transporting lumber to mill site;

10. Trucks (other than licensed vehicles); and

11. Welders, and related gases.

G. Dual use of equipment. A harvester's use of supplies or equipment in both an exempt activity and a taxable activity will result in such items being subject to the tax unless he can accurately determine the percentage of use of such items or equipment in the harvesting of forest products as compared to his use of the supplies or equipment in a taxable activity. In such case the harvester can prorate the tax due on the supplies or equipment based upon his percentage of use of such items in a taxable activity.

Statutory Authority

§§ 58.1-203 and 58.1-609.2(6) of the Code of Virginia.

Historical Notes

Derived from VR630-10-45.1 §§ 1.1-2.6; added January 1979; revised January 1985; amended, eff. July 1, 1994.

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