October 26, 2023
Re: § 58.1-1821 Appeal: Retail Sales and Use Tax
Dear *****:
This will respond to your letter in which you seek correction of the retail sales and use tax assessments issued to ***** (the “Taxpayer”) for the periods April 2020 through January 2023.
FACTS
The Taxpayer failed to file Virginia retail sales and use tax returns for the periods at issue, and the Department issued estimated assessments based upon the best information available. The Taxpayer timely appealed the assessments, alleging the estimated assessments do not match data from its point of sale (POS) system.
DETERMINATION
As a dealer, the Taxpayer is required to file a monthly retail sales and use tax return with the Department whether or not it is liable to remit any tax for the period covered by the return. See Virginia Code § 58.1-615. When a dealer fails to file a return, the Department is permitted to issue an assessment estimating the tax liability and imposing the associated penalties and interest. See Virginia Code §§ 58.1-618 and 58.1-635. The Department’s estimated assessments are deemed prima facie correct, meaning the burden of proof is upon the Taxpayer to show that an assessment is incorrect. See Virginia Code § 58.1-618.
Because the Taxpayer failed to file the required returns, the Department was correct in issuing assessments, estimating the tax liability, and imposing the associated penalty and interest. If the Taxpayer believes that the estimated assessments are incorrect, it should file the relevant returns and provide sufficient supporting documentation showing the correct tax liability.
The Taxpayer should submit returns for the periods at issue within 60 days from the date of this letter. The Department will process the Taxpayer’s returns, request any additional information necessary, and adjust the assessments based on the new information provided. If the Department does not receive the returns within the timeframe provided, the Department’s estimated assessments will be considered correct and collection action may resume.
The Code of Virginia sections cited are available online at www.tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at (804) *****, or via email at *****@tax.virginia.gov.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/4583-C