Innovative high technology industries; true object test

Certain "mixed" transactions that involve both the sale of tangible personal property and the provision of personal services by the vendor are not taxable. Those transactions deemed exempt are ones in which the sale of tangible personal property is inconsequential to the services provided by the vendor and for which a lump sum charge is made by the vendor.

The procedure for determining whether a mixed transaction is nontaxable is set forth in 23VAC10-210-4040. Liability for the tax depends on whether the true object of the transaction is to obtain a nontaxable service or taxable tangible personal property. If the true object is to obtain tangible personal property, a taxable sale occurs.