Tax Type
Retail Sales and Use Tax
Description
Record-keeping requirements; Sales to foreign diplomats
Topic
Returns/Payments/Records
Date Issued
12-15-1995
December 15, 1995
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear******************:
This will respond to your letter of October 26, 1995 seeking correction of the sales and use tax assessment issued to ************** (the "Taxpayer") for the period September 1992 through July 1995.
FACTS
The Taxpayer is a perfume retailer with one outlet in Virginia. The only issue concerns the assessment of tax on certain sales to foreign diplomats. Since the Taxpayer does not maintain copies of diplomatic tax exemption cards, the auditor assessed tax on such sales based on P. D. 92-175 (9/10/92) which sets out that a Xerox copy of the diplomatic exemption card must be kept on file. The Taxpayer strongly protests any requirement to maintain a copier in its store for this purpose and feels that it has sufficiently complied with the record keeping requirements set out in Virginia Regulation 630-10-45(F) by duly recording the diplomatic exemption card numbers in its records of exempt sales.
DETERMINATION
This same issue was recently addressed in P. D. 95-17 (2/2/95), copy enclosed, which states that a photocopy of the diplomat's tax exemption card is not required provided card number information is indicated on the record of the sale. Accordingly, there is no requirement that the Taxpayer maintain a copier for the purpose of copying diplomatic exemption cards, or obtain copies of such by other means, provided the Taxpayer continues to record the required information relating to exempt diplomatic sales. Of additional importance, the Taxpayer is encouraged to also verify and write down the expiration date of the card on the transaction record.
Based on the information presented, we have verified with the U. S. Department of State that the diplomatic sales assessed in this case were fully exempt at the time of sale. Accordingly, the tax assessed on the diplomatic sales has been abated.
As the Taxpayer has not paid the use tax portion of the assessment, a revised notice of assessment will soon be sent to the Taxpayer and should be paid within 30 days to avoid further interest charges.
For your information, l have enclosed a poster prepared by the U. S. Department of State which illustrates samples of the Tax Exemption Cards issued by them to certain foreign government personal and offices. Please note that the red-striped and green-striped tax exemption cards still restrict the entitlement to sales tax exemption.
If you have any questions, please contact ***************at*********************.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/10423R
Rulings of the Tax Commissioner