Tax Type
Retail Sales and Use Tax
Description
Food Service: Is Seller Required to Collect Tax
Topic
Basis of Tax
Persons Subject to Tax
Date Issued
10-09-2001
October 9, 2001
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear *****
This will reply to your letter in which you seek correction of the retail sales and use tax audit assessment issued to your client, ***** (the "Taxpayer"), for the period June 1993 through May 1999. I apologize for the delay in responding to your appeal.
FACTS
The Taxpayer is an out-of-state company in the business of selling restaurant food equipment at retail. The Taxpayer was audited and assessed tax on sales of food equipment the Taxpayer delivered into Virginia. The Taxpayer is taking exception to the audit findings, maintaining that it does not have sufficient contact with Virginia to require it to register for and collect Virginia sales tax on equipment sold or delivered to customers in Virginia. The Taxpayer believes that not all equipment listed on invoices with "shipped to" Virginia notation was actually delivered to Virginia in the Taxpayer's truck, but rather may have been picked up by the customer. The Taxpayer is requesting that the audit assessment be abated.
DETERMINATION
Code of Virginia § 58.1-612.C sets forth the activities the department uses to determine if an out-of-state dealer has sufficient activity within this state to require registration for and collection of the retail sales and use tax. Subsection 4 of this statute provides that an out-of-state dealer must register and collect the tax if it:
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- Makes regular deliveries of tangible personal property within this Commonwealth by means other than common carrier. A person shall be deemed to be making regular deliveries hereunder if vehicles other than those operated by a common carrier enter this Commonwealth more than twelve times during a calendar year to deliver goods sold by him.
Based on a review of the audit working papers, and additional information furnished by the auditor, the Taxpayer made more than twelve deliveries during each calendar year of the audit period. Based on my review of the audit working papers, I find that the Taxpayer met the registration requirement set forth in the above statute, and the audit assessment is correct. While you contend that the Taxpayer made less than twelve deliveries in each calendar year included in the audit, you have not presented any documentation to substantiate your claim. The invoices prepared by the Taxpayer, which are the only documentation presented, clearly indicate equipment delivered into Virginia by the Taxpayer.
If the Taxpayer has additional documentation substantiating the fact that less than twelve deliveries were made into Virginia during any calendar year in question, I will be glad to review this information and revisit the audit findings. Such documentation must be made available within 60 days from the date of this letter. If no new documentation is presented within 60 days, the assessment will become immediately due and payable.
It is noted in your letter that should an adverse determination be rendered, the favor of a conference would be requested prior to issuing such determination. Based on the above, if there is documentation to substantiate the number of deliveries made by the Taxpayer during each calendar year of the audit, please contact ****** in the department's Office of Policy and Administration, Policy Development, at ***** to set up a time to present such information.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/28336K
Rulings of the Tax Commissioner