Tax Type
Intangible Personal Property Tax
Property Tax
Description
Final Determination
Topic
Property Subject to Tax
Date Issued
03-04-1993
March 4, 1993
Re: §58.1-1821 Application; Intangible Personal Property Tax
Dear*****************
This will reply to your request that the Department issue a final determination regarding the assessment of intangible personal property tax against your client, ************* (the "Taxpayer") for 1980 through 1984.
FACTS
The Taxpayer was audited for the years 1980 through 1984, and tax, penalty and interest were assessed. Shortly after the assessments were made, the Taxpayer filed for bankruptcy protection in the United States Bankruptcy Court for the Eastern Division of Subsequently, the Taxpayer protested the application of the intangible personal property tax to its inventory on the grounds that it is a merchant and not a manufacturer, and thus not subject to the tax.
In Public Document 86-237 (November 19, 1986), the department ruled that the Taxpayer was subject to the tax, but gave the Taxpayer the opportunity to document its claim that some items were nontaxable property (inventory of a merchant and imports). In response to the department's ruling, the Taxpayer maintains that it is a merchant and not a manufacturer, and submitted percentage figures indicating that only a small portion of its inventory could be considered that of a manufacturer and, thus, subject to the tax.
DETERMINATION
I have reviewed the audit and the issues raised in the Taxpayer's protest and conclude that there is nothing that would alter the conclusion reached in my previous letter.
A review of the information supplied shows that it merely reargues the position that the Taxpayer is not a manufacturer, which is contrary to the findings of the auditor, prior returns of the Taxpayer, and the findings of my previous letter. For your convenience, I have enclosed a copy of my previous letter which provides in greater detail the basis of the department's prior ruling.
In an application for correction of an erroneous assessment under Va. Code §58.1-1821, the taxpayer has the burden of proving that the assessment is erroneous by showing what the correct assessment should be. This burden cannot be met if necessary documentation and supporting detail is not furnished. The Taxpayer has provided no documentation to substantiate its claim that most of its inventory is that of a merchant and only a small portion of its inventory could be considered that of a manufacturer.
Accordingly, the assessment as made is correct and remains due and payable. Due to the Taxpayer's financial condition, I will withhold collection action for 30 days to afford the Taxpayer the opportunity to submit a reasonable offer in compromise under Virginia Code § 58.1-105. Such an offer must include a current financial statement for the taxpayer. If an offer is not submitted during this period, collection action will resume.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/2983L
Rulings of the Tax Commissioner