Tax Type
Retail Sales and Use Tax
Description
Credit for Taxes Paid to Another State;Taxes Erroneously Paid
Topic
Rate of Tax
Date Issued
04-19-1985
April 19, 1985
Dear ***
This will reply to your letter of March 15, 1985, in which you again question the applicability of the sales and use tax to tangible personal property first used in Virginia but upon which use tax was erroneously paid to Maryland.
The facts of this case, as set forth in my determination of November 9, 1984, are as follows. * * * (``Taxpayer') is a heavy construction contractor which performed repairs to portions of the * * * located in Virginia, Maryland, and the District of Columbia. All materials used by the taxpayer in the performance of its repair contract were delivered to the taxpayer in Virginia, and subsequently shipped by the taxpayer to the Virginia, Maryland, or District of Columbia portions of the bridge. For materials used in the Maryland portion of the bridge, sales and use taxes were remitted to that state rather than Virginia, where first use of the property occurred.
The taxpayer asserts here that it should be granted a credit upon the Virginia sales and use tax for the tax that it erroneously paid to Maryland. Section 58.1-611 of the Code of Virginia (Virginia Code Section 58-441.8 prior to January 1, 1985) indeed provides for the crediting against the Virginia tax of tax paid to another state; however, the drafting of the statute shows an intention to provide such credit only when a sales or use tax was paid to another state on the purchase or first use of an item:
A credit shall be granted against the taxes imposed by this chapter with respect to a person's use in this State of tangible personal property purchased by him in another state. The amount of the credit shall be equal to the tax paid by him to another state or political subdivision thereof by reason of the imposition of a similar tax on his purchase or use of the property.
This interpretation was plainly set forth in Section 1-29 of the Virginia Retail Sales and Use Tax Regulations during the audit period in question:
Based upon the foregoing, I must conclude that the credit provisions of Virginia CodeSection 58.1-611 are inapplicable to the taxpayer in this case. Accordingly, the assessment issued to the taxpayer remains due and payable.
Dear ***
This will reply to your letter of March 15, 1985, in which you again question the applicability of the sales and use tax to tangible personal property first used in Virginia but upon which use tax was erroneously paid to Maryland.
The facts of this case, as set forth in my determination of November 9, 1984, are as follows. * * * (``Taxpayer') is a heavy construction contractor which performed repairs to portions of the * * * located in Virginia, Maryland, and the District of Columbia. All materials used by the taxpayer in the performance of its repair contract were delivered to the taxpayer in Virginia, and subsequently shipped by the taxpayer to the Virginia, Maryland, or District of Columbia portions of the bridge. For materials used in the Maryland portion of the bridge, sales and use taxes were remitted to that state rather than Virginia, where first use of the property occurred.
The taxpayer asserts here that it should be granted a credit upon the Virginia sales and use tax for the tax that it erroneously paid to Maryland. Section 58.1-611 of the Code of Virginia (Virginia Code Section 58-441.8 prior to January 1, 1985) indeed provides for the crediting against the Virginia tax of tax paid to another state; however, the drafting of the statute shows an intention to provide such credit only when a sales or use tax was paid to another state on the purchase or first use of an item:
A credit shall be granted against the taxes imposed by this chapter with respect to a person's use in this State of tangible personal property purchased by him in another state. The amount of the credit shall be equal to the tax paid by him to another state or political subdivision thereof by reason of the imposition of a similar tax on his purchase or use of the property.
This interpretation was plainly set forth in Section 1-29 of the Virginia Retail Sales and Use Tax Regulations during the audit period in question:
-
- A credit is granted against the use tax charged on tangible personal property bought by a consumer in another state . . . for use in Virginia if a similar tax was charged on the item in the state of purchase. (Emphasis added)
- A credit is granted against the use tax charged on tangible personal property bought by a consumer in another state . . . for use in Virginia if a similar tax was charged on the item in the state of purchase. (Emphasis added)
Based upon the foregoing, I must conclude that the credit provisions of Virginia CodeSection 58.1-611 are inapplicable to the taxpayer in this case. Accordingly, the assessment issued to the taxpayer remains due and payable.
Rulings of the Tax Commissioner