Tax Type
Retail Sales and Use Tax
Description
Parade balloon rentals by nonprofit organization
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
05-14-2001
May 14, 2001
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear **************:
This is in reply to your letter in which you seek correction of the department's retail sales and use tax audit assessment issued to **** (the "Taxpayer") for the period May 1997 through June 2000. Receipt is acknowledged of your payment of the uncontested tax, penalty and interest portion of the department's assessment totaling *****. The balance of the department's assessment totaling **** represents the contested portion of the deficiency.
FACTS
The Taxpayer, a nonprofit organization, promotes the downtown area of a city in Virginia through various activities and special events. The only contested transactions are the Taxpayer's rental of parade balloons and the purchase of helium to inflate the balloons. The Taxpayer contends that since a previous audit did not address such transactions, the taxation of such charges should be prospective. I note that a member of my staff has discussed the taxability of these charges with the Taxpayer.
DETERMINATION
Title 23 of the Virginia Administrative Code 10-210-840, copy enclosed, provides for the application of the tax on the lease or rental of tangible personal property. Based on prior decisions, the department may proceed against either the retailer or the purchaser for the payment of the tax liability. In this instance, since the vendor did not charge the sales tax on the rental of the property at issue, the Taxpayer became liable for the accrual and payment of the use tax. The application of the tax to balloon rentals was previously addressed in the enclosed Public Document 94-356 (11/23/94). Accordingly, as the Taxpayer did not remit the tax to the department, I find that the auditor was correct, in including such purchases in the audit.
Based on the information before me, and on the basis that the department has previously set forth the taxable status of such transactions, I do not find sufficient cause to withdraw the current assessment. The Taxpayer should return its payment for the balance of tax and 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 payment is not received within that time, interest will accrue on the balance due from the original date of assessment. 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
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear **************:
This is in reply to your letter in which you seek correction of the department's retail sales and use tax audit assessment issued to **** (the "Taxpayer") for the period May 1997 through June 2000. Receipt is acknowledged of your payment of the uncontested tax, penalty and interest portion of the department's assessment totaling *****. The balance of the department's assessment totaling **** represents the contested portion of the deficiency.
FACTS
The Taxpayer, a nonprofit organization, promotes the downtown area of a city in Virginia through various activities and special events. The only contested transactions are the Taxpayer's rental of parade balloons and the purchase of helium to inflate the balloons. The Taxpayer contends that since a previous audit did not address such transactions, the taxation of such charges should be prospective. I note that a member of my staff has discussed the taxability of these charges with the Taxpayer.
DETERMINATION
Title 23 of the Virginia Administrative Code 10-210-840, copy enclosed, provides for the application of the tax on the lease or rental of tangible personal property. Based on prior decisions, the department may proceed against either the retailer or the purchaser for the payment of the tax liability. In this instance, since the vendor did not charge the sales tax on the rental of the property at issue, the Taxpayer became liable for the accrual and payment of the use tax. The application of the tax to balloon rentals was previously addressed in the enclosed Public Document 94-356 (11/23/94). Accordingly, as the Taxpayer did not remit the tax to the department, I find that the auditor was correct, in including such purchases in the audit.
Based on the information before me, and on the basis that the department has previously set forth the taxable status of such transactions, I do not find sufficient cause to withdraw the current assessment. The Taxpayer should return its payment for the balance of tax and 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 payment is not received within that time, interest will accrue on the balance due from the original date of assessment. 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
Related Documents
Rulings of the Tax Commissioner