Did reusable fabric sandwich and snack bags qualify as lunch boxes during Virginia's school-supplies sales-tax holiday?

Subject

Reusable sandwich bags were not qualifying holiday school supplies

Plain-English summary

Virginia held the reusable fabric sandwich bags and wraps taxable during the school-supplies holiday. The holiday's guideline list was all-inclusive: only listed school supplies qualified.

Lunch boxes were listed, but Virginia understood that term as a container that conventionally carried a sandwich or other food plus a drink. The submitted products accommodated sandwiches and were more like reusable versions of plastic sandwich bags, which were not listed.

What this means for you

• Similar purpose does not substitute for appearing on an all-inclusive exemption list.
• Product capacity and ordinary meaning can control classification.
• Confirm the current holiday list and price limits for the sale year.

Citations and references

• 2006 Va. Acts chs. 579 and 593.
• Sales Tax Holiday Guidelines, P.D. 06-56, discussed in the ruling.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 14-102

Original ruling text

July 2, 2014

Dear *:

This is in response to your ruling request, dated August 6, 2013, in which you questioned whether fabric sandwich bags and wraps qualify for exemption from the Retail Sales and Use Tax during the school supplies and clothing sales tax holiday.

FACTS

The Company designs and sells fabric sandwich and snack bags and wraps, which are marketed and sold for use in student lunch bags, in lieu of disposable plastic bags. The insulated bags are sold separately from lunch boxes or bags. You question whether these items qualify for exemption from the sales and use tax during the sales tax holiday, and request that they be included on the list of qualifying items for 2014 and subsequent years.

ANALYSIS

Legislation enacted during the 2006 Virginia General Assembly (Chapters 579 and 593, Senate Bill 471 and House Bill 532) created an annual three-day sales tax holiday, during which certain school supplies and clothing could be purchased exempt of the Virginia sales and use tax. The legislation exempts school supplies with a sales price of $20 or less per item, and clothing with a sales price of $100 or less per item, and gives the Department of Taxation the authority to develop guidelines describing the items of merchandise that qualify for the exemption.

The Department's Sales Tax Holiday Guidelines, Public Document 06-56, (June 19, 2006) define "school supply" as "an item that is commonly used by a student in a course of study." The Guidelines provide an all-inclusive list of school supplies that qualify for exemption during the holiday. The Guidelines specifically indicate that only those supplies set forth in the list of school supplies qualify for exemption during the tax holiday. Lunch boxes are among the list of enumerated school supplies. Although they may serve a similar purpose, reusable fabric sandwich bags and wraps are not lunch boxes as the term is commonly understood. Typically, the term refers to a small container used to transport a person's lunch that conventionally accommodates a sandwich, or other food, as well as a drink. The reusable bags at issue here appear to only accommodate sandwiches, and are more akin to plastic sandwich bags, which are not covered under the exemption.

As the list of qualifying school supplies is all-inclusive and does not include reusable sandwich bags, these items do not qualify for exemption during the sales tax holiday for school supplies and clothing.

I hope this has responded to your questions. The Sales Tax Holiday Guidelines cited in this ruling are available in the Laws, Rules, and Decisions section of the Department's website, at www.tax.virginia.gov . If you have additional questions concerning the sales tax holiday, you may contact * in the Department's Policy Development Division at *** .

Sincerely,

Craig M. Burns

Tax Commissioner