Tax Type
Retail Sales and Use Tax
Description
Installation labor; Law Publications; Penalty
Topic
Exemptions
Property Subject to Tax
Date Issued
12-28-1992
December 28, 1992
Re: §58.1-1821 Application: Retail Sales & Use Tax
Dear
This will respond to your letter of May 28, 1992 in which you seek correction of a sales and use tax assessment to your company, *************(the "Taxpayer"), for the period of May 1990 through August 1991.
FACTS
The Taxpayer, a Virginia partnership engaged in the practice of law, contests the inclusion in a recent sales and use tax assessment of various publications which it deems are exempt from the tax and separately stated installation labor. In addition, it seeks abatement of the penalty assessed.
DETERMINATION
I will address each of the above issues separately below.
Installation Labor: An invoice provided by the Taxpayer indicates that installation labor was separately stated on an invoice, the total charge for which was included in the assessment. Thus, the assessment will be revised to remove this item from the assessment.
Publications: Several publications were picked up by the auditor as taxable. As you are aware, the department has recently concluded a review of numerous publications purchased by the Taxpayer and issued a ruling to the Taxpayer regarding the taxability of such (P.D. 92-233, (11/9/92)). Accordingly, the assessment will be revised consistent with the ruling letter. An auditor from the*************District Office will be contacting you regarding this matter.
Penalties: The Taxpayer seeks abatement of the entire penalty assessed. Virginia Regulation (VR) 630-10-80 provides that penalty will not be waived on second or subsequent audits for other than exceptional mitigating circumstances. Since this is the third audit of the Taxpayer and no exceptional mitigating circumstances have been demonstrated, I find no basis for waiver of the entire penalty assessed.
I, however, will agree to abate that portion of the penalty attributable to separately stated installation labor and exempt publications. In addition, upon revision of the audit assessment, the application of the penalty will be reviewed. If it is found that the Taxpayer meets the appropriate compliance ratios, the remaining penalty will be abated.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/6187H
Rulings of the Tax Commissioner