Tax Type
Retail Sales and Use Tax
Description
Occasional sales, including mergers; Liquidation sale
Topic
Taxability of Persons and Transactions
Date Issued
09-30-1996
September 30, 1996
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear*********
This will reply to a letter from ******** seeking correction of an assessment issued to*******(the "Taxpayer") for the period June 1991 through November 1993. I understand you are now working with a member of my staff to resolve this matter.
FACTS
The Taxpayer was audited and assessed use tax on fixed assets that were placed in service during the audit period. The auditor listed the assets from a depreciation schedule filed with the Taxpayer's income tax return. The Taxpayer maintains the assets were transferred from a related auto dealership which has gone out of business and that the occasional sale exemption would apply to the transfer of the assets.
DETERMINATION
Virginia Regulation 630-10-75(A) (copy enclosed) provides that "[t]he tax does not apply to an occasional sale provided the sale or exchange is not one of a series of sales or exchanges sufficient in number, scope and character to constitute an activity requiring the holding of a certificate of registration." Code of Virginia § 58.1-602 defines an "occasional sale" as:
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- A sale of tangible personal property not held or used by a seller in the course of an activity for which he is required to hold a certificate of registration, including the sale or exchange of all or substantially all the assets of any business and the reorganization or liquidation of any business, provided such sale or exchange is not one of a series of sales and exchanges sufficient in number, scope and character to constitute an activity requiring the holding of a certificate of registration.
While the Taxpayer may qualify for the occasional sale exemption, you have not provided documentation to support your claim. Without such documentation, I am unable to determine if the Taxpayer qualifies for the exemption. Code of Virginia § 58.1-205 provides that assessments issued by the department are deemed prima facie correct. The Taxpayer must meet the burden of proving that the assessment is improper.
I will allow you sixty days to submit documentation in support of an occasional
sale exemption for the Taxpayer. The information may be sent to***** in the Office of Tax Policy, P.O. Box 1880, Richmond, Virginia 23218-1880. If you have any questions, please call ********** at***************.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/8730S
Rulings of the Tax Commissioner