February 18, 2025
Re: § 58.1-1821: Retail Sales and Use Tax
Dear *****:
This will respond to your letter in which you seek correction of the retail sales and use tax assessment issued to ***** (the “Taxpayer”) for the period July 2020 through August 2022.
FACTS
An audit was conducted on the books and records of the Taxpayer, a real property and plumbing contractor with its headquarters and operations in Virginia, for the period at issue. Under a third-generation audit, the Department found that the Taxpayer did not pay tax on various transactions and issued an assessment for the unpaid tax, penalty, and interest. The Taxpayer filed an application for correction, contending that the assessment is excessive.
DETERMINATION
Virginia Code § 58.1-1821 states that “[a]ny person assessed with any tax administered by the Department of Taxation may, within ninety days from the date of such assessment, apply for relief to the Tax Commissioner.” Title 23 of the Virginia Administrative Code (VAC) 10-20-165 interprets Virginia Code § 58.1-1821 and sets out guidelines for the filing of administrative appeals. Subsection D 4 of this regulation states: “An incomplete appeal or notice of intent to appeal does not satisfy or extend the 90-day limitation period.”
Title 23 VAC 10-20-165 A defines a “complete appeal” as “an administrative appeal containing sufficient information, as prescribed in subsection D of this section, so that the grounds upon which the taxpayer relies in contesting an assessment are fully set forth to allow the Tax Commissioner to make an informed final determination.” Subsection D provides a list of the information required for a complete appeal. The required information includes alleged errors in the assessment, the grounds upon which the taxpayer relies, and all facts relevant to the taxpayer’s contention. In addition, taxpayers must provide the legal authority (statutes, regulations, rulings of the Tax Commissioner, court decisions, etc.) which is the basis for a taxpayer’s position in the application for correction.
In this instance, the Taxpayer’s entire application is a statement that the assessment is overstated. Such an argument does not constitute sufficient grounds of contention upon which a taxpayer may rely. Further, no relevant facts or legal authority supporting the Taxpayer’s position was provided. Because the Taxpayer has failed to submit any relevant facts, grounds of contention, or controlling legal authority, the Department has insufficient contentions on which to act. Accordingly, a complete appeal was not filed within the time prescribed by law.
Accordingly, the Department is closing this case and the assessment remains outstanding. 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 30 days from the date of the bill.
The Code of Virginia section and regulation cited are available online at law.lis.virginia.gov. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, at ***** or *****.
Sincerely,
James J. Alex
Tax Commissioner
Commonwealth of Virginia
AR/4575.B