Tax Type
Retail Sales and Use Tax
Description
Failure to collect the tax
Topic
Collection of Tax
Date Issued
10-14-1988
October 14, 1988
Re: Va. Code §58.1-1821 Application/Sales and Use Tax
Dear****************
This will reply to your letter of March 8, 1988, seeking the correction of an assessment issued in the above referenced case for the period August 1983, through June 1986.
FACTS
********** ("The Taxpayer") is a worldwide corporation based in Maryland engaged in the manufacture, sale, and installation of raised access flooring (flooring used for various electrical, communication and ventilation systems). The Taxpayer was audited by the Department and held liable for its failure to collect and remit the tax on its retail sales to**************("The Purchaser"). The Taxpayer contends that the tax was paid by the Purchaser.
DETERMINATION
Va. Code §58.1-612, provides that the Virginia sales and use tax "shall be collectible from all...dealers." The term dealer as defined in subsection (B)(3) of the above statute is one who "[s]ells at retail, or who offers for sale at retail" tangible personal property for use or consumption within the Commonwealth. The Taxpayer has been a registered dealer with the Department since 1971 and therefore, is liable for the collection and remittance of the tax on all of its nonexempt sales to Virginia customers.
The auditor, during a recent audit, discovered the nontaxed sales from a review of sales receipts. The auditor could not verify from these receipts or from reviewing the Taxpayer's sales tax return that the tax had been charged or paid; thus, the Taxpayer was held liable for a series of nontaxed sales of access flooring to the Purchaser. In addition, the Purchaser could not provide adequate documentation at the time of audit that such tax was remitted to the Commonwealth.
It is the Taxpayer's burden to prove that the tax was paid or that the assessment is erroneous. Va. Code §58.1-1825. The Taxpayer has met this burden. Based upon additional documentation recently provided by the Taxpayer, I have determined that the tax was in fact paid by the Purchaser, satisfying the Taxpayer's liability. Therefore, I find basis for correction of the assessment. The audit will be adjusted accordingly and the Department will issue a revised notice of assessment.
If you have any further questions, please contact us.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner