Tax Type
Retail Sales and Use Tax
Description
Assessment of taxes on purchase of fixed assets.
Topic
Taxability of Persons and Transactions
Date Issued
04-22-2002
April 22, 2002
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear *****:
This is in reply to your letter in which you seek correction of the department's retail sales and use tax audit assessment issued to ***** (the "Taxpayer") for the period June 1995 through December 1999. I note that the entire assessment has been paid. I apologize for the delay in the department's response.
FACTS
The Taxpayer operates a telemarketing business in the Commonwealth. The department's audit resulted in the assessment of taxes on the Taxpayer's purchase of fixed assets for its Virginia location. The Taxpayer disagrees with the application of the tax to these purchases, contending that taxes were collected and paid by the vendor. The Taxpayer states that it is continuing to try to secure documentation to support its claim of payment.
DETERMINATION
Code of Virginia § 58.1-205 deems a tax assessment issued by the department to be prima facie correct, and the burden is upon the taxpayer to prove that the assessment is incorrect. Further, Title 23 of the Virginia Administrative Code 10-210-340 mandates that "the dealer must separately state the amount of the tax and add the tax to the sales price or charge." With this in mind, I will address the concerns set out in your letter.
1. The Taxpayer states that taxes were paid to the vendor and that such taxes were remitted to the Commonwealth with the vendor's August 1996 return. Based on a review of the information provided and other available information, there is no evidence that taxes at issue have been paid to the Commonwealth.
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- Consequently, I do not find sufficient cause to remove this item from the department's audit. If the Taxpayer can present documentation reflecting that the taxes were paid to the vendor, I will reconsider my decision. Absent such evidence, there is no basis to revise the department's audit.
2. The Taxpayer has provided additional information to show that this purchase includes separate installation labor. Based on this information, the separately stated labor charges will be removed from the assessment.
3. The Taxpayer states that it sought documentation from the vendor to reflect that tax was a part of the invoice total. However, to date the Taxpayer has not received any evidence that details the invoice totals that show a lump sum pricing.
4. As there is no documentation to reflect that taxes were a part of the invoice, or that taxes have been accrued or paid to the vendor, I do not find cause to allow for any adjustment regarding these issues.
Based on all of the foregoing, the department's audit will be adjusted for the separately stated installation labor issue. A refund of tax and interest will be issued to the Taxpayer. Also, if the Taxpayer is able to document its other claims, the department may issue additional refunds within the three-year state of limitations set out in Code of Virginia § 58.1-1823.
Copies of the cited Code of Virginia and regulations are enclosed for reference purposes. These and other reference documents are also available online in the Tax Policy Library section of the Department of Taxation's website, located at www.tax.state.va.us.
If you should have any questions regarding this matter, please contact ***** of the department's Office of Policy and Administration, Appeals and Rulings, at *****@tax.state.va.us or at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
AR/35347Q
Rulings of the Tax Commissioner