Railway common carriers; contractors

Generally, purchases of tangible personal property by contractors in connection with real property construction contracts with railway common carriers are taxable sales to such contractors for their own use or consumption. Only in instances where the credit of a railway common carrier is bound directly in a purchase by a contractor and the contractor has been officially designated as a purchasing agent for the railway will such purchases be deemed to be those of the railway and taxable or exempt as set forth in 23VAC10-210-380 through 23VAC10-210-383.

Contractors are not subject to the use tax when provided with tangible personal property by a railway common carrier in connection with a real property construction contract provided that the tangible personal property so furnished enjoyed a sales and use tax exemption when purchased by the railway common carrier.