Tax Type
Retail Sales and Use Tax
Description
Taxpayer must have valid resale certificates of exemption.
Topic
Exemptions
Records/Returns/Payments
Date Issued
04-18-2011
April 15, 2011
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 assessment issued to ***** (the "Taxpayer") for the audit period July 2006 through June 2009. I apologize for the delay in responding to your appeal.
FACTS
The Taxpayer is a manufacturer and seller of photocopying systems. The Department's audit disclosed that the Taxpayer made sales of tangible personal property exempt of the tax, some of which were not supported by valid exemption certificates. The Taxpayer is in agreement with the audit results, but contends that certain sales held taxable in the audit were made to retailers that held valid resale certificates of exemption. The Taxpayer was given an additional period of time by the auditor to secure exemption certificates that were not present during the audit, but failed to provide such certificates. The Taxpayer has submitted its appeal of the audit contending that it can provide the required certificates sufficient to revise the Department's assessment.
DETERMINATION
Virginia Code § 58.1-623 A provides that, "All sales or leases are subject to the tax until the contrary is established. The burden of proving that a sale, distribution, lease, or storage of tangible personal property is not taxable is upon the dealer unless he takes from the taxpayer a certificate to the effect that the property is exempt under this chapter."
Virginia Code 58.1-623 B states, "The certificate mentioned in this section shall relieve the person who takes such certificate from any liability for the payment or collection of the tax, except upon notice from the Tax Commissioner that such certificate is no longer acceptable. Such certificate shall be signed by and bear the name and address of the taxpayer; shall indicate the number of the certificate of registration, if any, issued to the taxpayer; shall indicate the general character of the tangible personal property sold, distributed, leased, or stored, or to be sold distributed, leased, or stored under a blanket exemption certificate; and shall be substantially in such form as the Tax Commissioner may prescribe."
Title 23 of the Virginia Administrative Code 10-210-280 A provides further instruction regarding the foregoing statute and states that "a certificate that is incomplete, invalid, infirm or inconsistent on its face is never acceptable, either before or after notice." Accordingly, for the future, the Taxpayer should ensure that exemption certificates received are complete and adhere to the foregoing requirements.
In this instance, the Taxpayer has submitted two certificates of exemption to support sales that were made exempt of the tax. The Department's auditor has reviewed the certificates and has revised the audit accordingly. The revised balance of the assessment plus accrued interest totals ***** and must be paid within 30 days from the date of this letter to avoid the accrual of additional interest. Please return your payment for ***** to: Virginia Department of Taxation, Office of Tax Policy, Appeals and Rulings, Post Office Box 27203, Richmond, Virginia 23261-7203, Attention: *****.
The Code of Virginia and regulation sections cited are available on-line in the Tax Policy Library section of the Department's website located at www.tax.virginia.gov. If you have any questions regarding this matter, please contact ***** at *****.
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- Sincerely,
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Craig M. Burns
Tax Commissioner
AR/1-4474595794.Q
Rulings of the Tax Commissioner