Tax Type
Retail Sales and Use Tax
Description
Liability of corporate officer; Penalties and interest
Topic
Collection of Delinquent Tax
Penalties and Interest
Date Issued
07-29-1993
July 29, 1993
Re: §58.1-1821 Application: Retail Sales and Use Tax
Dear*************
This will reply to your letter of June 2, 1993 in which you seek correction of sales and use tax and withholding tax assessments on behalf of your client, ***********( the "Taxpayer").
FACTS
The Taxpayer was an officer of***********(the "Corporation"). The Corporation was issued assessments for sales and withholding taxes. Upon failure to collect the tax, interest, and penalty deficiencies from the Corporation, the department converted the assessments, pursuant to Va. Code §58.1-1813.
The Taxpayer paid in full the taxes due for each of the periods in question. You seek correction of the portion of the converted assessment attributable to penalty and interest, contending that there is no provision in Virginia law or regulations that allows corporate penalties and interest to be converted.
The assessment for withholding tax for the period from January to December 1990 has been abated in full. Therefore, the only issue is the penalty and interest portion of the converted assessment related to sales tax.
DETERMINATION
The department has previously ruled that any penalty or interest imposed against a corporation becomes part of that entity's assessment and is passed on to the responsible corporate officer under Va. Code §58.1-1813, with interest accruing on the total outstanding tax, penalty and interest. See P.D. 92-99 (6/15/92) (copy enclosed).
Also, although not referenced in P.D. 92-99, Va. Code §58.1-1832 very specifically provides that Chapter 18 of Title 58.1 (including Va. Code 5 58.1-1813) "shall be construed to include taxes, levies, penalties and interest, or all of them." (Emphasis added).
Accordingly, the penalty and interest portion of the converted assessment attributable to the sales tax assessments is correct, and is now due and payable. You will shortly receive an updated bill with interest accrued to date. The bill should be paid within 30 days to avoid the accrual of additional interest. Although you requested a conference, this letter has been issued without one because the application of the law is clear.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/7057F
Rulings of the Tax Commissioner