Tax Type
Retail Sales and Use Tax
Description
Application for refund; Voluntary payment
Topic
Taxpayers' Remedies
Date Issued
12-06-1994
December 6, 1994
Re: §58.1-1821 Application: Retail Sales and Use Tax
Dear******************
This will reply to your letter concerning*******(the "Taxpayer") in which you request a refund of sales and use tax paid with the August 1992 return.
FACTS
The Taxpayer purchased printing equipment in July 1989. Sales tax was not charged on the equipment by the vendor and the Taxpayer did not report the consumer use tax on the July 1989 sales and use tax return. To correct this omission, the Taxpayer voluntarily performed a self-audit on its purchases, reported the cost of this equipment on its August 1992 sales and use tax return, and paid the proper tax. The Taxpayer later discovered that the statute of limitations for assessments had expired on an untaxed purchase made during July 1989 and payment of the tax for that period was not required. The Taxpayer filed an amended August 1992 return in August 1993 and contends the amended return meets all of the requirements of Va. Code §58.1-1823(A)(iii). Accordingly, the Taxpayer is requesting a refund of tax payments attributable to the equipment reported on the August 1992 return.
DETERMINATION
The Virginia Supreme Court in Commonwealth v. Ferries. 120 Va. 827, copy enclosed, stated, "The general rule is well settled that taxes voluntarily paid cannot be recovered back in the absence of a statute providing for their repayment." Additionally, the court in Commonwealth v. Conner, 162 Va. 406, copy enclosed, held that, "Before, relief can be had it must appear that there has been an erroneous assessment." Therefore, a person who voluntarily pays a tax that is properly owed to the Commonwealth is not subsequently entitled to a refund unless a statute exists to provide for such a refund.
In the instant case, the Taxpayer computed the proper tax owed on the purchase of the equipment, self assessed itself for tax by filing the August 1992 sales tax return, and voluntarily paid the tax. There is no indication that the tax was erroneously computed. Further, the voluntary payment of a proper tax outside of the statute of limitation period does not constitute an erroneous assessment. Additionally, there is no provision in Code of Virginia §58.1-1823 to allow the refund of a tax that has been properly and voluntarily paid.
Based on this information, there is no basis to issue a refund of sales and use tax that was properly owed to the Commonwealth and voluntarily paid by the Taxpayer. Should you have additional questions, please contact********************.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/7695N
Rulings of the Tax Commissioner