Tax Type
Retail Sales and Use Tax
Description
Failure to collect and report sales tax
Topic
Accounting Periods and Methods
Appropriateness of Audit Methodology
Date Issued
08-18-1982
August 18, 1982
Re: 58-1118 Application/Sales Tax
Dear *********************
This determination is issued in response to your May 18, 1981 letter, an application for correction of the department's August 27, 1980 assessment against your client, ******************* for use tax, a hearing held with you on May 20, 1982, and additional taxpayer information which you submitted in your letter of July 7, 1982.
FACTS
The subject dealer, a Virginia paving and grading contractor, was audited and held liable for use tax on certain purchases where invoices were incomplete or showed delivery in Virginia and no sales or use tax was paid to this State. The dealer did not file use tax returns on a regular basis. The audit period in question was September 1, 1976 through December 31, 1979; the assessment at issue in the amount of $ ********* consisted of the following:
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The taxpayer claimed that all items in question were shipped to his North Carolina job site and not to ********************* as the invoices are made out.
At a meeting with the Department on April 30, 1981, the taxpayer furnished us some of the invoices at issue. Subsequent to this meeting, the invoices provided were reviewed by staff in the department's **************District Office and items with a taxable measure of $ ********* were deleted from the audit (a reduction in tax of $ ***** ). In addition, the taxpayer paid $ ****** of this audit liability on December 31, 1980.
As agreed at our May 20, 1982 hearing with you concerning the above referenced taxpayer, you submitted additional information on items remaining in the audit which you continue to contest in your letter of July 7, 1982.
DETERMINATION
The information you supplied us consisted of applicable invoices showing that North Carolina tax was paid on the specific items in question, affidavits of employees verifying that delivery was in North Carolina, and a North Carolina audit of the taxpayer in question showing that tax was paid to North Carolina on the listed items and establishing, in the instance of used equipment leased from *********** of******* North Carolina that the equipment was delivered to and used at a North Carolina job site. Based on this information, I have determined that items b through h, the purchases from **************with the exception of invoice number ******** (Schedule B, page 6 of the audit) and the invoices representing lease payments to ***********as delineated in your July 7, 1982 letter are not subject to Virginia use tax. The specific items and their taxable status are listed on the enclosed Attachment A. In addition, we have enclosed a copy of Schedule B of the department's audit which shows the deletions made by the auditor based on review of invoices you provided at an April 30, 1981 meeting with department officials (designated by an encircled "a"), the taxable measure on which tax was paid by your client on December 31, 1980 (designated by an encircled "b"), and items being removed as a result of information furnished in your July 7, 1982 letter (designated by an encircled "d").
The audit has been adjusted to reflect this determination. The total remaining liability as revised amounts to ******* consisting of $ in tax and $***** in interest. A copy of the department's calculations of this liability is included herein; a format similar to the one appearing in your letter of December 31, 1980 in payment of uncontested taxes and interest thereon has been used.
Payment of this revised amount of $ ****** should be made immediately. Upon receipt of such payment the balance of the assessment will be abated.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner