§ 21.1-372. Proof of exemption: sale for resale; sale, rental, lease, or license of rental equipment.
Latest version.
A claim of purchase for resale or of purchase, rental, lease, or license for rent,
lease, or license is valid only if the evidence is sufficient to persuade a reasonably
prudent businessman that the particular item is being acquired for resale or for rental,
lease, or license in the ordinary course of business. The fact that the acquiring
person possesses a Privilege License number, and makes a verbal claim of "sale for
resale or lease" or "lease for re-lease" does not meet this burden and is insufficient
to justify an exemption. The "reasonable evidence" must be evidence which exists objectively,
and not merely in the mind of the vendor, that the property being acquired is normally
sold, rented, leased, or licensed by the acquiring person in the ordinary course of
business. Failure to obtain such reasonable evidence at the time of the transaction
will be a basis for disallowance of any claimed deduction on returns filed for such
transactions.