September 15, 2020
Re: § 58.1-1821 Refund Application: Retail Sales and Use Tax
Dear *****:
This is in response to your letters submitted on behalf of ***** (the “Taxpayer”) in which you contest the denial of the sales and use tax refund requests for the period January 2013 through December 2014. I apologize for the delay in responding to your appeal.
FACTS
In a letter dated December 9, 2015, the Taxpayer, through its representative, submitted two refund requests for the period at issue. The submission that was received by the Department contained a CD for each refund request. The Department is unable to except external media, and pursuant to Department policy, the refund requests were returned to the address of the Taxpayer’s representative in December 2015. Additionally, a Data Submission letter from the Department was sent to the Taxpayer’s place of business, indicating that because the documentation was received in the form of a CD, the Department was unable to process the refund requests in accordance with the Department’s security policy. The letter instructed the Taxpayer to resubmit the refund requests using secure email or on paper. In August 2018, the Department’s auditor informed the Taxpayer that its refund requests for the period at issue had been returned to the Taxpayer and had not been reviewed by the Department. The Taxpayer resubmitted the refund requests, and was subsequently informed by the Department’s auditor that the refund requests were not timely filed, and the refund requests were denied.
The Taxpayer is contesting the denial of the refund requests. The Taxpayer maintains that refund requests submitted in December 2015 were timely filed. The Taxpayer states that each request included a cover letter, noting submission of a corresponding sales tax refund claim; a schedule apportioning the requested refund based on the Taxpayer’s revenue derived from providing Internet services; copies of invoices; and other paper documentation. The Taxpayer further states that it provided a CD with each refund request, containing a copy of the schedules that had been provided on paper. The Taxpayer maintains that the information on the CDs was supplemental to the paper documentation, and was not intended to be the sole documentation source to substantiate the refund requests. The Taxpayer contends that the paper documentation could have been used by the Department to make a decision regarding the refund requests, and that the CDs did not include any information that was vital to processing the refunds. The Taxpayer requests that the paper documentation previously filed be used by the Department to review the refund requests. The Taxpayer maintains that the refund requests were not returned to it or its representative. The Taxpayer further maintains that it nor its representative received the Department’s Data Submission letter prior to it being provided in August 2018 by the Department’s auditor.
DETERMINATION
Pursuant to Virginia Code § 58.1-1823, a refund request must be made by a taxpayer within “three years from the last day prescribed by law for the timely filing of a return….” Title 23 of the Virginia Administrative Code 10-210-3040 provides that “Refunds cannot be authorized unless the request is made within three years from the due date of the return.”
Based upon the information before me, it is my understanding that the Department received the refund requests at issue in December 2015. However, the refund requests were not processed and reviewed because the refund requests contained CDs. The Department’s records show that the original refund requests submitted were mailed back to the Taxpayer’s representative and that the Data Submission letter was issued to the Taxpayer. The resubmitted refund requests were denied by the Department in August 2018 because the statute of limitations to file had expired.
The Data Submission letter acknowledges the filing and receipt of the refund requests for the period at issue. Further, the Data Submission letter does not provide a deadline for when the paper documents or secure email submission must be provided. Accordingly, I find that the refund requests were timely filed by the Taxpayer in December 2015, and the Taxpayer is authorized to resubmit the refund requests for the period at issue. The refund requests must be provided to the Department within 60 days of the date of this letter. The Department’s auditor will contact the Taxpayer to coordinate the delivery of the requests. The documentation provided by the Taxpayer in August 2018 is proper for review of the refund requests and should be provided again. If the resubmitted refund requests are not received within the allotted timeframe, the denial of the refund requests will be upheld.
If you have questions regarding the documentation that needs to be provided please contact the Department’s auditor. If during the review, the Department’s auditor determines that additional documentation is needed, the Taxpayer must provide such documentation within the timeframe established by the auditor in order for the documentation to be considered in the review of the refund requests.
The Code of Virginia section and regulation cited are available on-line at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department’s web site. If you have any questions about this response, you may contact ***** in the Department’s Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/2142P