Tax Type
Retail Sales and Use Tax
Description
Deficiency Assessments, Seller of medical supplies
Topic
Collection of Delinquent Tax
Date Issued
08-11-1998
August 11, 1998
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear *****
In your letter of April 30, 1998, you seek correction of the retail sales and use tax assessment issued to ***** (the Taxpayer) as a result of an audit. Our records indicate that the assessment (i.e., bill ***** ) has been paid in full.
FACTS
The Taxpayer sells medical supplies. An audit for the period February 1996 through November 1996 resulted in an assessment of use tax on untaxed sales of tangible personal property made to Virginia customers. The Taxpayer takes exception to several sales included in the audit. The Taxpayer also requests waiver of the penalty and interest assessed in this case.
DETERMINATION
Sales. A review of the audit report (copy enclosed) reveals that all of the sales tax adjustments requested in your letter were made prior to the date of assessment, May 19, 1998. In fact, the percentage of error used in the audit report is actually lower than requested. Accordingly, the tax deficiency does not require any further adjustment.
Penalty. On a second audit, penalty is generally waived if the sales tax compliance ratio meets or exceeds 85%. Since the sales tax compliance ratio on this second audit is 79%, penalty applies.
Penalty may also be waived when there is evidence of exceptional mitigating circumstances which prohibited the Taxpayer from achieving an acceptable level of compliance on its obligations to charge and collect the use tax on all taxable sales made to Virginia customers. Since no evidence of an exceptional mitigating circumstance has been presented in this case, penalty cannot be waived.
Interest. Interest is mandatory and therefore cannot be waived. See Title 23 of the Virginia Administrative Code (VAC) 10-210-2030(C) and 10-210-2032(B); copy enclosed.
Conclusion. Based on the foregoing, I find that the assessment is proper as issued. Consequently, no further adjustments are required and no refund is due.
If you have any questions, please contact ***** , Senior ***** Auditor, at******.
Sincerely,
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear *****
In your letter of April 30, 1998, you seek correction of the retail sales and use tax assessment issued to ***** (the Taxpayer) as a result of an audit. Our records indicate that the assessment (i.e., bill ***** ) has been paid in full.
FACTS
The Taxpayer sells medical supplies. An audit for the period February 1996 through November 1996 resulted in an assessment of use tax on untaxed sales of tangible personal property made to Virginia customers. The Taxpayer takes exception to several sales included in the audit. The Taxpayer also requests waiver of the penalty and interest assessed in this case.
DETERMINATION
Sales. A review of the audit report (copy enclosed) reveals that all of the sales tax adjustments requested in your letter were made prior to the date of assessment, May 19, 1998. In fact, the percentage of error used in the audit report is actually lower than requested. Accordingly, the tax deficiency does not require any further adjustment.
Penalty. On a second audit, penalty is generally waived if the sales tax compliance ratio meets or exceeds 85%. Since the sales tax compliance ratio on this second audit is 79%, penalty applies.
Penalty may also be waived when there is evidence of exceptional mitigating circumstances which prohibited the Taxpayer from achieving an acceptable level of compliance on its obligations to charge and collect the use tax on all taxable sales made to Virginia customers. Since no evidence of an exceptional mitigating circumstance has been presented in this case, penalty cannot be waived.
Interest. Interest is mandatory and therefore cannot be waived. See Title 23 of the Virginia Administrative Code (VAC) 10-210-2030(C) and 10-210-2032(B); copy enclosed.
Conclusion. Based on the foregoing, I find that the assessment is proper as issued. Consequently, no further adjustments are required and no refund is due.
If you have any questions, please contact ***** , Senior ***** Auditor, at******.
Sincerely,
Rulings of the Tax Commissioner