Tax Type
Retail Sales and Use Tax
Description
Amnesty
Topic
Amnesty
Collection of Delinquent Tax
Date Issued
05-22-1989
May 22, 1989
Re: Request for Ruling: Sales and Use Tax
Dear****************
This will reply to your letter dated January 13, 1989 in which you request that your out-of-state client be afforded amnesty with respect to the imposition of any sales and use tax for all years prior to 1989. Prospectively, your client proposes to apply for a Certificate of Registration in Virginia and commence filing sales and use tax returns.
FACTS
Your client, hereinafter referred to as X, sells wholesale to reseller customers in Virginia. All of X's sales have been for resale or pursuant to exemption under Virginia law. Believing that nexus was not sufficiently established, X has not previously applied for a Certificate of Registration nor filed sales and use tax returns in Virginia. There is presently no audit of X by Virginia nor has it been notified that one will occur in the future. X has been advised by your firm to register with Virginia and begin filing all required returns. X has not historically maintained adequate records to substantiate the exemption for all of its reseller customers and is concerned that use tax might potentially be assessed by Virginia for prior years. X has now taken steps to make certain that adequate records exist to substantiate its exempt sales so that it can properly comply with the sales and use tax law of Virginia. Therefore, you request that X be afforded amnesty with respect to the imposition of any sales and use tax for all years prior to 1989.
RULING
There is currently no provision in Virginia law granting the Tax Commissioner the authority to enter into an agreement such as the one you have proposed. Under Virginia Code §58.1-105, the Tax Commissioner may compromise or settle doubtful or disputed claims for taxes or tax liability of doubtful collectibility.
In order for the department to render a decision in this case, we will require the name, address, and other pertinent facts and circumstances showing the extent of your clients activities within Virginia. Assuming your client is not presently under investigation or being audited by the department and upon the receipt of the aforementioned information, I will be inclined to consider entering into a settlement agreement with your client.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner