January 18, 2023
Re: § 58.1-1821 Refund Application: Retail Sales and Use Tax
Dear *****:
This will respond to your letter submitted on behalf of ***** (the “Taxpayer”) in which you seek a reconsideration of the Tax Commissioner’s determination, issued as Public Document (P.D.) 20-80 (5/12/2020), for the period September 2008 through June 2011.
FACTS
In P.D. 20-80, the Tax Commissioner upheld the denial of the Taxpayers refund request as the Taxpayer had not proven that the refund was erroneously denied. The Taxpayer requests reconsideration of two issues raised in the original appeal.
DETERMINATION
With its reconsideration, the Taxpayer contends that the denial of the refund is a misapplication of policy because the burden of collection, reporting, and remitting retail sales tax is on the vendor. The Taxpayer further argues that, because the Department agrees that the internet service provider (ISP) exemption applies to certain purchases, the Department is not hindered from processing a refund of the state portion of the tax paid on said transactions. The Taxpayer also reasserts its original argument regarding the Department’s revenue allocation on mixed-use equipment.
In regard to reconsideration requests, Title 23 of the Virginia Administrative Code (VAC) 10-20-165 F 1 permits taxpayers to request a consideration of a determination issued under Virginia Code § 58.1-1821. Such requests, however, must meet one of the four following requirements:
1. The facts upon which the original determination is based are misstated by the Tax Commissioner or are inaccurate, and the determination would have a different result based on a correction of the Tax Commissioner’s misstatement of the facts presented or a clarification of the original facts presented in the taxpayers administrative appeal;
2. The law upon which the original determination is based has been changed by legislation, court decision or other authority effective for the tax period(s) at issue;
3. The policy upon which the original determination is based is misapplied, and the determination would have a different result based on the application of the proper policy; or
4. The taxpayer has discovered additional evidence or documentation that was not available to the taxpayer at the time the original administrative appeal was filed with the department, and the additional evidence or documentation could produce a result different from the original determination.
Based upon a review of the Taxpayer’s reconsideration request and the law and policy used to make the determination issued by the Department, the Taxpayer has not demonstrated that the facts upon which the original determination is based are misstated or inaccurate, nor that the policy has been misapplied.
The determination letter issued to the Taxpayer accurately applies the law and policy to the facts at issue. The public documents referenced in the determination letter clearly and accurately state and explain the Department’s longstanding policy with respect to the issuance of refunds and the Department’s longstanding policy with respect to calculation of the proration of the sales tax on mixed-use equipment. The Department’s policy and application of the law are clear. The fact that the Taxpayer disagrees with the Department’s decision does not by itself warrant reconsideration of the findings in the determination letter issued to the Taxpayer. Accordingly, the Taxpayer’s request for reconsideration is denied and the findings in the determination letter stand as issued.
The Code of Virginia section and regulations cited are available online at www.tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website. If you have any questions regarding this response, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/4310.A