May 18, 2021
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear *****:
This is in response to your letter submitted on behalf of ***** (the “Taxpayer”), in which you seek correction of the retail sales and use tax assessment issued for the period July 2015 through July 2018. I apologize for the delay in responding to your letter.
FACTS
The Taxpayer is a manufacturer of windows and doors and is headquartered out-of-state with a location in Roanoke, Virginia. A retail sales and use tax audit was conducted with regard to the Taxpayer’s Roanoke location, and an assessment was issued on July 15, 2020. After receipt of the assessment at its out-of-state headquarters, the Taxpayer appeals the assessment on the basis that it was not contacted for an audit because all correspondence was mailed to the wrong location. The Taxpayer contends it was not notified of the audit and has no knowledge of the assessment and requests the Department send an auditor to conduct an audit and determine liability as the Taxpayer does not believe it is liable for the outstanding assessment.
DETERMINATION
The Department’s records indicate the Taxpayer was contacted for an audit in August 2018. The Department’s auditor corresponded with the Taxpayer’s Accounting Supervisor, *****, throughout 2018, 2019 and into 2020 regarding the ongoing audit. The Department’s records indicate that the auditor corresponded with the Accounting Supervisor primarily through email and was provided documentation through email, in addition to having sent several letters throughout the audit process addressed to the Accounting Supervisor at the out-of-state headquarters.
During the latter part of the audit process, the Accounting Supervisor ceased corresponding with the auditor and no further documentation was provided to the auditor. In early March 2020, the auditor faxed and mailed a letter to the Taxpayer at the out-of-state headquarters which included the audit work papers. In the letter, the auditor requested additional information and invoices by April 16, 2020 if there were items that the Taxpayer believed should not be included in the audit. Subsequently, a letter with the closed audit report was mailed and emailed to the Taxpayer informing it that the audit would be concluded with no additional information review because none had been provided by the Taxpayer. On October 26, 2020, a letter was mailed to the Taxpayer at the out-of-state headquarters regarding the appeal letter, and requested the Taxpayer to contact the auditor to discuss the information needed to resolve the audit matter. A copy of the letter is enclosed.
There is clear evidence that the Taxpayer was contacted regarding the audit, and that an audit was properly initiated and in the process of being conducted with the Accounting Supervisor. As such, there is no basis for the Taxpayer’s claims that it was not notified of the audit.
Based on this determination, the assessment is correct as issued. An updated bill, with interest accrued to date, will be mailed shortly to the Taxpayer. No further interest will accrue provided the outstanding assessment is paid within 60 days from the date of this letter. If the Taxpayer has questions concerning payment of the assessment or bill, the Taxpayer may contact the Delinquent Collections Unit at 804-367-8045.
The Code of Virginia, along with other reference documents, are available on-line at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department’s web site. If you have any questions about this response, you may contact ***** in the Department’s Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/3570L