Tax Type
Retail Sales and Use Tax
Description
Audit sampling; Extrapolation of expensed purchases
Topic
Taxability of Persons and Transactions
Date Issued
04-24-1996
April 24, 1996
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear*************
This will reply to your letter of March 25, 1996 in which you seek correction of the recent sales and use tax audit of *****(the "Taxpayer") for the period of August 1992 through March 1995.
FACTS
The Taxpayer is a retail department store chain. The Taxpayer is taking exception to the auditor using gross sales in extrapolating recurring expense purchases and is requesting that the use tax error factor be extrapolated based on expenses rather than gross sales.
DETERMINATION
The department uses gross sales to extrapolate expense purchases as monthly gross sales figures are generally easy to obtain. The department does not oppose using expenses in extrapolating recurring purchases, provided such figures are available. Upon verification of your expense figures by the auditor, the audit will be adjusted accordingly.
If you should have any questions, please contact ****Office of Tax Policy, at*****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/11093K
Rulings of the Tax Commissioner