Tax Type
Retail Sales and Use Tax
Description
Deficiency assessments, general contractor specializing in heating and air conditioning contracting services
Topic
Collection of Delinquent Tax
Records/Returns/Payments
Date Issued
07-21-1999
July 21, 1999
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear***
This is in reply to your letter in which you seek a correction of the department's sales and use tax assessment issued to ***** (the "Taxpayer'), for the period April 1995 through October 1998.
FACTS
The Taxpayer is a general contractor specializing in heating and air conditioning contracting services. The Taxpayer contests the assessment of tax on certain purchases, maintaining that tax was paid to the supplier. The Taxpayer states that it has no control over the filing of tax payments by its vendors, and that it should not be held responsible for the tax in the audit. Additionally, the Taxpayer disagrees with the assessment of interest charges.
DETERMINATION
The Taxpayer believes the seller should be held responsible for the collection of the tax. While Code of Virginia § 58.1-612 legally requires dealers to collect and remit the sales tax on all sales or leases of tangible personal property, Code of Virginia § 58.1-625 makes the tax the legal debt of the purchaser. This has been recognized by the federal courts, which have also held that "the legal incidence of the Virginia sales and use tax is on the purchaser.' See United States v. Forst. 442 F. Supp. 920 (W.D. Va. 1977), copy enclosed. As such, the department may proceed against either the seller or the purchaser in instances where the tax has not been collected or paid. Consequently, I find that the auditor's tax assessment issued to the Taxpayer is proper, as no documentation has been provided to show the tax was paid on the purchases at issue and remitted to the department.
With regard to the interest charges, the department is bound by the provisions of Code of Virginia § 58.1-1812 which mandates the application of interest to any assessment of tax. Interest cannot be waived unless the associated tax is waived. Based on the information before me, and because the assessment of tax is valid, there is no basis for a waiver of any portion of the interest.
The Taxpayer should return its payment for the balance of the assessment for interest totaling ***** to the department's Office of Tax Policy, Post Office Box 1880, Richmond, Virginia 23218-1880, within 30 days from the date of this letter. If the Taxpayer's payment is not received within that time, interest will continue to accrue on the balance due. If you should have any questions regarding this matter, please contact ***** of the department's Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/22329Q
Rulings of the Tax Commissioner