Tax Type
Retail Sales and Use Tax
Description
Separately stated charges
Topic
Taxability of Persons and Transactions
Date Issued
06-27-1996
June 27, 1996
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear**************
This will reply to your letter of March 10, 1995, in which you seek correction of a retail sales and use tax assessment issued to ******* ("the Taxpayer"), for the period January 1992 through December 1994. I apologize for the delay in responding to your letter.
FACTS
The Taxpayer was audited and assessed use tax on charges for the purchase and delivery of water for its swimming pool. According to the Taxpayer, most of the invoices stated that the charges were for delivery or hauling of water only. For this reason, the Taxpayer did not accrue use tax on the charges. You have noted in your letter that the Taxpayer will remit the use tax on any future purchases of water.
DETERMINATION
Virginia sales tax is computed on the "sales price" of tangible personal property. Code of Virginia § 58.1-602 (copy enclosed) defines "sales price" as the "total amount for which tangible personal property or services are sold, including any services that are a part of the sale ...." Virginia Regulation (VR) 630-10-107 (copy enclosed) states that the tax does not apply to delivery charges added to a taxable sale if they are separately stated on the customer's invoice. The department's auditor determined that the invoices in question were for the purchase and delivery of water. Since the delivery charges were not separately stated on the invoices, the entire charge on each invoice was held taxable.
Code of Virginia § 58.1-205 (copy enclosed) provides that tax assessments issued by the department are deemed prima facie correct. The burden of proving that an assessment is erroneous is on the taxpayer. If the Taxpayer can provide evidence that the invoice charges were for the delivery of water only, I will agree to remove the charges from the audit. Such evidence might include copies of invoices showing that the water was purchased in transactions separate from the delivery of the water. In the absence of any documentation as described above, I must conclude the assessment is valid.
Due to the length of time taken to respond to your appeal, I will agree to waive additional interest if the current balance due of ***** is paid within thirty days. Your payment may be mailed to in the Office of Tax Policy, P. O. Box 1880, Richmond, Virginia 23218-1880. If you are able to provide the documentation described above, please contact ***** at ***** within thirty days.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/9508S
Rulings of the Tax Commissioner