Tax Type
Retail Sales and Use Tax
Description
Documentation provided to show computation of consumer use tax liabilities
Topic
Assessment
Records/Returns/Payments
Taxable Transactions
Date Issued
07-01-2010
July 1, 2010
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear *****:
This is in response to your letter in which you submit additional documentation in response to my determination issued in Public Document 09-142 (9/29/09) concerning the retail sales and use tax assessment issued to ***** (the Taxpayer) for the period February 2004 through June 2007. You also request reconsideration of such determination.
FACTS
The prior determination allows the audit to be revised if the Taxpayer is able to furnish sufficient documentation to support the removal of set-up fees from the audit. Such transactions were determined to be construction services and not retail sales of panels.
In regard to the reconsideration request, the Taxpayer claims that it did not deliver the panels to the contractor in Virginia with respect to the sales made without installation. Rather, the Taxpayer asserts that the contractor picked up the panels in North Carolina and transported them to the Virginia job site. Accordingly, the Taxpayer contends it correctly collected the North Carolina sales tax on these transactions, and the "ship to" address is only a means of identifying the job for the benefit of the contractor.
DETERMINATION
Set-up fees
Based on the documentation furnished for this issue, I find basis for removing the set-up fees assessed in the audit.
Sales without Installation
The Taxpayer has presented the invoices listed in the audit for the panels claimed to be sold without installation. These invoices show that Virginia addresses were used in the "ship to" portion of each invoice and includes the city or county in Virginia in which the job was located. The Taxpayer, however, has provided no proof that these sales were picked up at the Taxpayer's North Carolina plant by the Virginia contractor.
Virginia Code § 58.1-205 1 deems any assessment of tax by the Department to be prima facie correct. This means that the Taxpayer has the burden of proving that the assessment is incorrect. With respect to the sales in question, the Taxpayer has not shown through documentary evidence that the Virginia contractor picked up the panels in North Carolina as claimed. Because the evidence presented does not establish the Taxpayer's claim, the Taxpayer has not met the required burden of proof.
Furthermore, in connection with 14 of the 182 sales in question, the Department's audit staff has obtained eight additional invoices indicating the Taxpayer also charged the Virginia contractor for trucking labor. [See the enclosed schedule listing the fourteen invoices held in the audit and the eight corresponding trucking invoice numbers.] Based on this evidence, and absent convincing evidence to the contrary, I must presume that the Taxpayer issued corresponding invoices for the remaining 168 invoices in question to charge for delivery to Virginia job sites. Based on this available evidence and the lack of convincing evidence in support of the Taxpayer's claim, I find no basis to revise this portion of the audit.
CONCLUSION
The audit will be revised in accordance with this determination. An updated bill, with interest accrued to date, will be sent to the Taxpayer. The outstanding balance should be paid within 30 days of the bill date to avoid additional interest charges. The Taxpayer should remit its payment to: Virginia Department of Taxation, Attention: *****, 600 E. Main Street, 15th Floor, Richmond, Virginia 23219. If you have any questions concerning payment of the assessment, you may contact ***** at *****.
Failure to remit full payment within the 30-day period may result in the imposition of an additional 20% penalty on the tax due under the terms of Virginia's recent amnesty program. See the enclosure entitled "Important Payment Information."
The Code of Virginia section and public document cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site. If you have any questions about this response, you may contact ***** in the Office of Tax Policy, at *****.
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- Sincerely,
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- Linda Foster
Deputy Tax Commissioner
- Linda Foster
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AR/1-3997878891.R
Rulings of the Tax Commissioner