Could Virginia consider a retailer's exemption certificates when its administrative appeal was filed after the 90-day deadline?

Subject

Assessed tax on untaxed items sold to its customers; exemption certificates

Plain-English summary

Virginia upheld the assessments without deciding whether the retailer's customer exemption certificates were valid because the administrative appeal was late.

The two assessments were dated September 21 and September 27, 2006. Under the 90-day period applied in the ruling, the appeal deadlines were December 21 and December 27, 2006.

The taxpayer's appeal letter was dated January 16, 2007. Because it arrived after both deadlines, the application for correction was barred by the statute of limitations and the assessments remained due.

What this means for you

• Calendar the administrative appeal deadline from each assessment date immediately.
• Substantive exemption evidence cannot rescue an appeal that the statute bars as untimely.
• Multiple assessments can carry different deadlines even when they arise from the same audit.
• This ruling applied a historical 90-day period; verify the current deadline and filing method.

Common questions

Did Virginia find the exemption certificates invalid? No. The Commissioner did not reach their merits.

When was the appeal filed? The taxpayer's letter was dated January 16, 2007.

What happened to the assessments? They were upheld and remained due and payable.

Citations and references

• Va. Code § 58.1-1821.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 07-157

Original ruling text

October 17, 2007

Re: § 58.1-1821 Application: Retail Sales and Use Tax

Dear *:

This will reply to your letter in which you seek correction of the retail sales and use tax assessments issued to * (the "Taxpayer") for the period of November 2002 through October 2005. I apologize for the delay in responding to your letter.

The Taxpayer was audited by the Department and assessed tax on untaxed items sold to its customers. The Taxpayer contends that the exemption certificates received from its customers are valid for the transactions in question. Therefore, the Taxpayer requests the Department accept the certificates as valid and adjust the assessment accordingly.

Virginia Code § 58.1-1821 provides 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." [Emphasis added.] In this case, the assessments issued to the Taxpayer were dated September 21, 2006 and September 27, 2006. Pursuant to the provisions of Va. Code § 58.1-1821, the Taxpayer was required to file its administrative appeal with the Tax Commissioner no later than December 21, 2006 and December 27, 2006, respectively.

The Taxpayer filed an administrative appeal with the Department by letter dated January 16, 2007, well after the expiration date of the 90-day limitations period. Therefore, the Taxpayer's application for correction pursuant to Va. Code § 58.1-1821 is barred by the statute of limitations.

Accordingly, the assessments are upheld and remain due and payable. Updated bills, with interest accrued to date, will be mailed shortly to the Taxpayer. No additional interest will accrue provided the assessments are paid within 30 days from the date of the updated bills. Payment of the outstanding balance should be sent to: Virginia Department of Taxation, Office of Policy and Administration, Appeals and Rulings, Post Office Box 27203, Richmond, Virginia 23261-7203, Attention: *.

The Code of Virginia section cited and other reference documents are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's website. If you have any questions about this response, you may contact * at ***.

Sincerely,

Janie E. Bowen

Tax Commissioner

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