Tax Type
Retail Sales and Use Tax
Description
Contested sale meets the criteria for exemption.
Topic
Exemptions
Records/Returns/Payments
Date Issued
05-06-2011
May 6, 2011
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear *****:
This is in response to your letter in which you seek correction of a retail sales and use tax assessment issued to ***** (the "Taxpayer") for the period July 2007 through June 2010. I apologize for the delay in responding to your letter.
FACTS
The Taxpayer is a wholesaler of medical devices and primarily sells to hospitals, clinics and nursing homes. As a result of the Department's audit, an assessment was issued for a sale made exempt of the tax. The auditor denied the certificate of exemption because the name on the certificate of exemption for the customer was inconsistent with the purchaser's name on the invoice. The auditor held the sale taxable. The Taxpayer protests the tax assessment and asserts that the sale qualifies for exemption. The Taxpayer provides additional information to support its claim.
DETERMINATION
Certificates of Exemption
Virginia Code § 58.1-623 states that all sales or leases are subject to the tax until the contrary is established. The burden of proving that a sale or lease of tangible personal property is not taxable is upon the dealer, unless he takes, in good faith from the purchaser or lessee, a certificate of exemption indicating that the property is exempt under the law. This requirement is further explained in Title 23 of the Virginia Administrative Code 10-210-280, which provides that a certificate that is incomplete, invalid, infirm or inconsistent on its face is never acceptable.
The Taxpayer has furnished a complete and signed nonprofit organization exemption certificate issued by the Department, a purchase order and an invoice for the contested sale. On the certificate, the customer's legal name is indicated which is different from the purchaser's name on the invoice. Based on a search performed in the Department's registration system, the name on the invoice is the customer's trade name. The contested sale was made to the customer under its trade name and shipped to the customer at its facility in Virginia. The contested sale was paid directly from the funds of the customer. Accordingly, I find that the contested sale meets the criteria for exemption set out in Va. Code § 58.1-609.11 as a sale to a nonprofit organization. As such, the exempt sale made to this customer will be removed from the audit.
CONCLUSION
The assessment represents the tax and interest assessed on the contested sale. Based on the above determination, the Department will abate the bill.
The Code of Virginia sections and regulation 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 determination, you may contact ***** in the Department's Office of Tax Policy, Appeals and Rulings, at *****.
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- Sincerely,
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- Linda D. Foster
Deputy Tax Commissioner
- Linda D. Foster
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AR/1-4549541669.T
Rulings of the Tax Commissioner