Are charcoal briquettes sold for outdoor home cooking exempt from Virginia sales tax as fuel used for domestic consumption?

Subject

Charcoal briquettes are not exempt fuel for domestic consumption

Plain-English summary

Charcoal briquettes sold for outdoor home cooking were taxable. Virginia's domestic-consumption exemption named artificial or propane gas, firewood, coal, and home heating oil. Charcoal briquettes were not one of the listed fuels.

The regulation said domestic consumption was not limited to heating and could also include cooking or heating water. But the Department read that language as describing qualifying uses of the fuels named in the statute, not as expanding the exemption to every product used for cooking. Because Virginia strictly construes sales-tax exemptions, the briquettes did not qualify.

What this means for you

• Personal or household use alone did not make a fuel exempt.
• Cooking was a qualifying domestic use only for products within the statute's specified fuel categories.
• Marketing charcoal as outdoor cooking fuel did not turn it into exempt coal under this ruling.
• A seller claiming an exemption had to fit within the exemption's explicit terms.

Common questions

Did it matter that the briquettes were used only for cooking rather than business purposes?

No. The use was domestic, but the product itself was not among the fuels covered by the exemption.

Does the regulation's reference to cooking exempt all cooking fuels?

No. The Department said the statute and regulation specifically identified the covered fuel types and did not extend the exemption to other cooking products.

Citations and references

• Va. Code § 58.1-609.10(1).
• 23 VAC 10-210-630(B) and 23 VAC 10-210-540.
• P.D. 07-159, cited in the ruling.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 10-259

Original ruling text

November 19, 2010

Re: Request for Ruling: Retail Sales and Use Tax

Dear *:

This is in response to your letter in which you request a ruling regarding the application of the retail sales and use tax to the sale of charcoal briquettes.

FACTS

The charcoal briquettes that are the subject of the ruling request are predominately sold in consumer sized bags at retail stores. They are advertised as fuel for use on an outdoor grill and are strictly meant for cooking. The ruling request further states that the charcoal briquettes are not used for heating a home, nor can they be used for cooking inside the home. You inquire whether the charcoal briquettes qualify for the exemption provided under Va. Code § 58.1-609.10 1.

RULING

Virginia Code § 58.1-609.10 1 provides, in pertinent part, that the retail sales and use tax does not apply to:

Artificial or propane gas, firewood, coal or home heating oil used for domestic consumption. "Domestic consumption" means the use of artificial or propane gas, firewood, coal or home heating oil by an individual purchaser for other than business, commercial or industrial purposes. The Tax Commissioner shall establish by regulation a system for use by dealers in classifying individual purchases for domestic or nondomestic use based on the principal usage of such gas, wood, coal or oil.

Title 23 of the Virginia Administrative Code (VAC) 10-210-630 further defines the types of fuels used for domestic consumption that are covered by the exemption. Subsection B of the regulation states, "Domestic consumption usage is not restricted to heating purposes, but may also include cooking or heating water."

The statutory language and the regulation very specifically state the types of fuels that are subject to the exemption and do not provide for the exemption to apply to other products used as fuel for home heating purposes or for cooking and heating water. Accordingly, the exemption that applies to fuels for domestic consumption does not apply to the sale of charcoal briquettes. 1

The Virginia courts have consistently required strict construction of tax exemptions. Based on principles established by the courts, Title 23 VAC 10-210-540 provides that exemptions from the retail sales and use tax are strictly construed, i.e. , where there is any doubt as to the application of an exemption, the doubt is resolved against the one claiming the exemption.

I hope the foregoing responds to your inquiry. This response is based on the facts provided as summarized above. Any change in facts or the introduction of new facts may lead to a different result.

The Code of Virginia section and regulation cited, along with other reference documents are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site. If you have any questions about this response,you may contact * in the Department's Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Craig M. Burns

Tax Commissioner

AR/1-4513703397.P

1. See also, Public Document 07-159 (10/17/07).