Tax Type
Retail Sales and Use Tax
Description
Application for refund; Statute of limitations
Topic
Taxpayers' Remedies
Date Issued
01-31-1997
January 31,1997
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear***************
This is in reply to your letter requesting a refund of taxes beyond the three year statute of limitation.
FACTS
The Taxpayer operated a restaurant and lounge which ceased operations in July 1992. An audit of the Taxpayer's operations for calendar year 1989 disclosed a sales tax deficiency from unremitted sales based on a comparison with Alcoholic Beverage Control reports and the Taxpayer's federal tax return. The Taxpayer paid all assessments owed to the department.
The Taxpayer later discovered that taxes paid to the department were based on gross receipts, without benefit of deduction for certain nontaxable sales. Accordingly, the Taxpayer requests a waiver of the statute of limitations for purposes of refunding taxes based on the nontaxable sales.
DETERMINATION
The Virginia Supreme Court in Commonwealth v. Ferries, 120Va. 827, 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 allows the taxpayer a refund of any tax administered by the department if an amended return has been filed with the department "within the later of: (I) three years from the last day prescribed by law for the timely filing of the return ... or (iv) two years from the payment of an assessment ...."
In the present case, the Taxpayer has neither filed an amended return for refund within three years from the time the original returns were due to have been filed, nor applied for a refund of taxes within the two years from the date the assessment was paid. While I sympathize with your situation, the department does not have the authority to issue a refund outside of the time allowed by the Code of Virginia. I have enclosed previous rulings, P.D.'s 94-365 (12/06/94), and 96-79 (05/07/96), which present the department's policy with respect to other such refund requests. Accordingly, I regret that I cannot grant your request for refund. 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/11563Q
Rulings of the Tax Commissioner