Tax Type
Corporation Income Tax
Withholding Taxes
Description
Failure to file monthly withholding tax returns
Topic
Withholding of Tax
Date Issued
12-16-1982
December 16 1982
Re: 58-1118 Application/Withholding Tax
This will reply to your letter of October 24, 1982 in which you apply for relief of penalty assessed against you for failure to file monthly withholding tax returns on your two stores; **************************.
Facts
*********** was incorporated in 1979, and own *************. Withholding tax from ********* was less than $100.00 per month and was paid quarterly. In November of acquired **********. This acquisition required withholding of more than $100.00 per month for the two stores combined. Withholding returns were still filed quarterly instead of monthly, and penalty was assessed for those months the returns were not filed. applies for relief of the penalties.
Determination
Virginia Code § 58-151.2 requires every employer making payment of wages to an employee to withhold an amount which, if an equal amount was collected for each similar payroll period during the year, would aggregate or approximate the income tax liability of the employer. An "employer" is defined in § 58-151.1(4) as the person for whom an individual performs any service as an employee. A "person," defined in § 58-151.1(5), includes a corporation. Therefore, ********** is an employer required to withhold.
An employer is required to file withholding returns in compliance with § 58-151.13. This section states that an employer whose monthly liability is less than $100.00 is required to file quarterly. An employer whose monthly liability is greater than $100.00 is required to file monthly. § 58-151.13(d) states that when an employer fails to make a return or fails to remit as required he is subject to a penalty for that failure, the penalty to be not less than ten dollars.
***************** is the corporation who pays the employees for ***************************. The corporation is a single entity, even though it owns two bookstores. You state that the two stores are classified separately for sales tax purposes. It is proper to assign each place of business a registration number for collection of sales and use taxi however, an employer is assigned one number for withholding tax, no matter how many places of business he has. Therefore, *********** should combine the withholding from ***************** and make one monthly return on all withholding.
The penalty is required to be paid anytime an employer fails to file returns and remit the tax as required by § 58-151.13. The penalty, in no case, is to be less than ten dollars, even when no payment is required with the return. I find that you should have started making monthly returns beginning in 1981 when your monthly liability rose over $100.00. You still reported quarterly throughout 1981 and the beginning of 1982. The penalty, therefore, is proper.
Based on the foregoing, I find no reason to adjust the assessment. You must file withholding tax on a monthly basis.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner