Tax Type
Retail Sales and Use Tax
Description
User liable for tax on untaxed items; Use tax
Topic
Collection of Delinquent Tax
Taxability of Persons and Transactions
Date Issued
09-21-1990
September 21, 1990
Re: §58.1-1821 Application/ Sales and Use Tax
Dear ****
This will reply to your letter of November 6, 1989, seeking the correction of an assessment issued in the above referenced case for the period of October, 1986 through September, 1989.
FACTS
***** ("the Taxpayer") was audited by the department and held liable for failure to remit the use tax on various purchases of tangible personal property for which no sales tax was paid at the time of purchase by the Taxpayer. The Taxpayer contests the assessment of tax on purchases of repair parts for its trucks, contending that the tax was paid by its supplier at the time the supplier purchased the parts. The Taxpayer has submitted no evidence in support of its claim.
DETERMINATION
Virginia Regulation 630-10-109 (A) provides in part that, "[t]he use tax applies to the use, consumption or storage of tangible personal property in Virginia when the Virginia sales or use tax is not paid at the time the property is purchased." In addition, the courts have held that the legal incidence of the Virginia sales and use tax is on the purchaser. Although the seller is legally obligated to collect the tax from the purchaser, the statute makes the tax the legal debt of the purchaser. ( See United States v. Forst, 442 f. Supp. 920 (W.D. Va. 1977), aff'd, 569 F.2d 811 (4th Cir. 1978). Therefore, as the taxpayer's supplier failed to collect the tax at the time the property was purchased by the taxpayer, the taxpayer was liable for remitting the tax directly to the department.
Based on the foregoing, I find no basis for correction of the assessment. However, if the Taxpayer in this case can provide documentation showing that the tax was paid by its supplier for each of the contested items, I will consider allowing a credit against the assessment to the extent of the tax shown paid by the supplier. Such information should be remitted within 30 days to the department's Technical Services Section, Office Services Division, P.O. Box 6-L, Richmond, Virginia 23282. If the requested information is not received by the department within this time period, the assessment will be payable in full.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner