Tax Type
Retail Sales and Use Tax
Description
Certificate of exemption; Burden of proof
Topic
Exemptions
Date Issued
04-28-1995
April 28, 1995
Re: §58.1-1821 Application: Retail Sales and Use Tax
Dear*************
This will respond to your letter of December 14, 1994 seeking correction of the sales and use tax assessment issued to********** (the Taxpayer) for the period December 1991 through August 1994. Our records indicate that the assessment has been paid.
FACTS
The Taxpayer is an out-of-state manufacturer of lawn care equipment and is registered with the Department of Taxation to collect sales tax from its Virginia customers. The only issue concerns two untaxed sales for which the Taxpayer did not obtain exemption certificates from its Virginia customers. The Taxpayer believes these customers are dealers purchasing for resale and requests that the department accept this as fact in lieu of a valid resale exemption certificate. However, neither of the two Virginia customers are registered with the department.
DETERMINATION
Certificates of exemption and dealers' burden of proof are addressed by Virginia Regulation 630-10-20 which provides that:
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- All sales, leases and rentals of tangible personal property are subject to the tax until the contrary is established. The burden of proving that the tax does not apply rests with the dealer unless he takes, in good faith from the purchaser or lessee, a certificate of exemption indicating that the property is exempt under the law.
In the absence of a valid exemption certificate from these Virginia customers, the Taxpayer is not relieved from any liability for the payment or collection of the tax and becomes directly liable for the tax. A member of my staff has attempted to confirm that the customers in question were registered dealers, but has been unable to locate a registration for either firm. Accordingly, unless the Taxpayer can furnish signed resale exemption certificates from the two Virginia customers and information identifying such customers as Virginia dealers registered for the collection and remittance of the sales and use tax, there is no basis to revise the audit.
If you can provide the resale certificates and the information indicated above,
please contact***********of the department's Office of Tax Policy at**********within the next 30 days.
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- Sincerely,
Danny M. Payne
Tax Commissioner
- Sincerely,
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Rulings of the Tax Commissioner