Document Number
96-118
Tax Type
Retail Sales and Use Tax
Description
Refund statute of limitations
Topic
Payment and Refund
Date Issued
06-04-1996
June 4, 1996



Re: Request for Ruling: Retail Sales and Use Tax

Dear*************

This is in response to your letter of March 5, 1996, in which *******(the Taxpayer) seeks a ruling with respect to the statute of limitations on refunds for sales tax collected on exempt pollution control equipment.
FACTS

The Taxpayer contracted with a company to purchase and install equipment which eliminates perchlorothylene emissions. The Taxpayer properly collected and remitted the tax on the sale of the equipment. The equipment has since been certified as pollution control equipment by the Department of Environmental Quality under Code of Virginia § 58.1-609.3(9)(i).

Upon receiving notice that the equipment was certified pollution control equipment, the Taxpayer refunded the sales tax to its customer. Subsequently, the Taxpayer requested a refund from the department for the tax remitted on the original transaction. The department denied the refund since the Taxpayer's request was made outside the three year statue of limitations.

RULING

Code of Virginia § 58.1-1823 authorizes the refund of any tax within three years from the date such tax was paid. Virginia Regulation (VR) 630-10-89, copy enclosed, relates to the refund of sales taxes to a dealer, and specifically states in part that, "Refunds cannot be authorized unless the request is made within three years from the due date of the return."

In the enclosed P.D. 96-79 (05/07/96), the department addressed an analogous situation concerning the statute of limitations on refunds. In that case, the Taxpayer paid the tax on equipment which was later certified by the Department of Environmental Quality as pollution control equipment. Upon discovery of the applicable exemption and after certification, the Taxpayer applied to the department for a refund of the sales tax paid. The refund was denied in that case because the application for refund was outside the statute of limitations period.

In the instant case, the tax collected on the sales transaction was remitted on the Taxpayer's September 20, 1992 sales and use tax return. Any application for refund of sales tax paid needed to be submitted on or before September 30, 1995 to be within the three year statute of limitations period. In this case, the Taxpayer's application for refund was made on March 5, 1996. While I sympathize with your situation, the department is precluded from granting your request for a refund.

Should you have any additional questions regarding this issue, you may contact **** of the department's Office of Tax Policy at**** .

Sincerely,




Danny M. Payne
Tax Commissioner


OTP/11029T

Rulings of the Tax Commissioner

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