Tax Type
Retail Sales and Use Tax
Description
Erroneously collected tax; Out-of-state dealer
Topic
Collection of Delinquent Tax
Date Issued
04-09-1999
April 9, 1999
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear *****
This will reply to your letter in which you seek correction of the retail sales and use tax audit of ***** (the "Taxpayer') for the period of January 1994 through February 1998.
FACTS
The Taxpayer is an out-of-state dealer of golf carts and golf cart parts. The Taxpayer delivered golf carts and parts to customers in the state of Virginia and erroneously charged its Virginia customers the 6% North Carolina retail sales tax. As a result of the recent audit, the Taxpayer was assessed the erroneously collected North Carolina tax. The Taxpayer believes that the Virginia customer, i.e., the ultimate consumer, is responsible for the 4 1/2% consumer use tax on all out-of-state purchases, and the Taxpayer should not be held liable for the erroneously collected North Carolina sales tax. The Taxpayer is requesting that the audit be revised accordingly.
DETERMINATION
In order to determine if the Taxpayer is subject to the collections requirements of the Virginia retail sales and use tax, the department looks to the definition of "dealer' in Code of Virginia § 58.1-612, copy enclosed. Subsection C of this statute provides that a dealer shall have sufficient activity in this state to require registration if the dealer:
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- Makes regular deliveries of tangible personal property within this Commonwealth by means other than common carrier. A person shall be deemed to be making regular deliveries hereunder if vehicles other than those operated by a common carrier enter this Commonwealth more than twelve times during a calendar year to deliver goods sold by him.
- Makes regular deliveries of tangible personal property within this Commonwealth by means other than common carrier. A person shall be deemed to be making regular deliveries hereunder if vehicles other than those operated by a common carrier enter this Commonwealth more than twelve times during a calendar year to deliver goods sold by him.
In the present case, the dealer collected the 6% North Carolina sales tax on transactions subject to the Virginia sales tax. Title 23 Virginia Administrative Code (VAC) 10-210-340, copy enclosed, addresses the collection of the tax by dealers and Subsection D of this regulation provides the following:
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- Overcollection of the tax. Any dealer who collects tax in excess of a 4 1/2% rate or who otherwise overcollects the tax, except as may be authorized under the bracket system or the special provisions relating to vending machine sales, must remit any amount overcollected to the state on a timely basis.
- Overcollection of the tax. Any dealer who collects tax in excess of a 4 1/2% rate or who otherwise overcollects the tax, except as may be authorized under the bracket system or the special provisions relating to vending machine sales, must remit any amount overcollected to the state on a timely basis.
Based on the above, I find that the Taxpayer was properly assessed for tax collected and not remitted. The Taxpayer may wish to obtain a refund from North Carolina of North Carolina sales tax erroneously collected and remitted on taxable Virginia transactions. If you should have any questions, please contact ***** Office of Tax Policy, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
Rulings of the Tax Commissioner