Tax Type
Retail Sales and Use Tax
Description
Application for refund; Statute of limitations
Topic
Taxpayers' Remedies
Date Issued
05-07-1996
May 7, 1996
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear**************
This will reply to your letter of February 15, 1996 in which your company, ********** (the "Taxpayer"), applies for a refund of taxes paid on equipment used in its operations.
FACTS
The Taxpayer purchased and installed equipment, on January 16, 1992, which eliminates perchlorothylene emissions. The equipment has been certified as pollution control equipment by the Department of Environmental Quality, and qualifies for exemption from the sales and use tax under Code of Virginia §58.1-609.3(9)(i). You state that you were unaware of the availability of the exemption until September 1995. Your application for a refund of taxes paid on the purchase of the equipment was subsequently denied on the basis that the three year statute of limitations had expired in January 1995. You request that consideration for refund is warranted due to the improper advertising of the exemption.
DETERMINATION
The Virginia Supreme Court in Commonwealth v. Ferries, 120 Va. 827, copy enclosed, stated, "The general rule is well settled that taxes voluntarily paid cannot be recovered back in the absence of a statute providing for their repayment.
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 instant case, the Taxpayer properly paid the tax to its vendor in January 1992, on the purchase of the equipment. The equipment was not exempt at the time the transaction occurred, because it had not been 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 in October 1995, after the expiration of the three year limitation period.
While I sympathize with your present situation, the department has no authority to issue a refund outside of the statute of limitation's period. Accordingly, your request for refund is denied. Should you have any additional questions regarding this matter, please contact*** of the department's Office of Tax Policy at*********.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/10962
Rulings of the Tax Commissioner