Tax Type
Retail Sales and Use Tax
Description
Recordkeeping requirements; Electronic tax reporting system
Topic
Returns/Payments/Records
Date Issued
10-31-1995
October 31, 1995
Re: Request for Ruling: Retail Sales and Use Tax
Dear**************:
This is in response to your letter of June 20, 1995 in which you seek a ruling regarding acceptable records for sales and use tax purposes.
********* (the "Taxpayer") is marketing a corporate purchasing card that allows client companies through their employees ("cardmembers") to purchase goods and services without the need to issue purchase order forms. Also, vendors would not necessarily issue paper invoices to the Taxpayer's clients on corporate card purchases. Rather, clients receive a monthly statement from the Taxpayer and pay corporate card purchases with one check instead of paying invoices generated by individual vendors.
To alleviate concerns regarding sales or use tax documentation on these paperless transactions, the Taxpayer has developed a sales tax reporting system to replace paper invoices. Under this system, each vendor will electronically transmit specific sale-related data to the Taxpayer. On a monthly basis, the Taxpayer furnishes to the client a print-out and/or a tamper proof disk containing the sales-related data furnished by the vendor with respect to each transaction. This data consists of a product description; the name, state and ZIP code of the vendor; the name, city, state and ZIP code of the cardmember; and the cardmember's cost center. The sales tax reporting system also separately lists the total amount billed, the separately stated tax amount and the applicable tax rate.
You also indicate that in most instances when goods are shipped, the Taxpayer can precisely identify the taxing jurisdiction (state, city and ZIP code). However, in some situations, the Taxpayer will only have access to the ZIP code. In such cases, and by using information other than that supplied by the Taxpayer, clients may be able to identify the appropriate taxing jurisdiction.
The Taxpayer requests a ruling determining, first, if its sales tax reporting system is an acceptable substitute for vendor generated paper invoices. The Taxpayer also inquires if the information it provides to clients identifying taxing jurisdictions is acceptable as accurate.
RULING
-
- Code of Virginia 58.1-633 provides that:
Every dealer required to make a return and pay or collect any tax under this chapter shall keep and preserve suitable records of the sales, leases, or purchases ... taxable under this chapter, and such other books of account as may be necessary to determine the amount of tax due hereunder, and such other pertinent information as may be required by the Tax Commissioner.
- Code of Virginia 58.1-633 provides that:
I find that the information provided by the Taxpayer to clients through the sales tax reporting system satisfies these criteria and may be used by clients as an acceptable substitute for paper invoices. In regard to precisely identifying the appropriate taxing jurisdiction, the responsibility for doing so rests with the client. It appears that in most instances the sales tax reporting system does provide this information accurately. In those few situations where the Taxpayer cannot precisely identify the appropriate taxing jurisdiction, the client may use other information to properly allocate the tax on its untaxed purchases.
If you have any additional questions about this letter, please contact ********** in my Office of Tax Policy at***********.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/9905I
Rulings of the Tax Commissioner