Did a timely notice of intent preserve a Virginia sales-tax appeal when the taxpayer did not submit the grounds for relief within 90 days?

Subject

Incomplete notice of intent to file an administrative appeal

Plain-English summary

The taxpayer lost its administrative appeal because it filed only a notice of intent, not a complete appeal, within the 90-day statutory period. The notice stated that the taxpayer disagreed with the assessments and was gathering statistical data, but it did not fully set out the grounds needed for an informed determination.

Virginia counted 90 consecutive calendar days beginning the day after each assessment date, including weekends and holidays. The taxpayer had until January 22, 2008 to file a complete application for correction and did not do so. The appeal was therefore barred by statute.

What this means for you

• A placeholder notice may not preserve a Virginia administrative tax appeal.
• Submit the facts, legal grounds, requested correction, and enough supporting information to permit a determination within the 90-day period.
• The deadline runs in consecutive calendar days, not business days.
• Continuing to gather data does not extend the statutory filing period described in this ruling.

Common questions

Q: Was the notice of intent submitted within 90 days?
A: Yes, but it was incomplete because it did not fully state the grounds for contesting the assessments.

Q: What made an appeal complete?
A: The guidelines required sufficient information to fully set out the grounds relied upon so the Commissioner could make an informed final determination.

Q: What happened after the appeal was barred?
A: The Department said it would issue consolidated bills with accrued interest and proceed to collection if they were not timely paid.

Citations and references

• Va. Code § 58.1-1821.
• Administrative Appeal Guidelines §§ 3 A and 4.2 A.
• P.D. 06-140 (Nov. 29, 2006).

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 08-153

Original ruling text

August 29, 2008

Re: § 58.1-1821 Notice of Intent: Retail Sales and Use Tax

Dear *:

This will reply to your letter in which you file a notice of intent regarding correction of the retail sales and use tax assessments issued to * (the "Taxpayer") for the period May 2005 through April 2007.

FACTS

The Department audited the Taxpayer for the taxable periods at issue and made a number of adjustments based on the Taxpayer's sales and use tax records. As a result, assessments dated October 23 and 24, 2007, were issued to the Taxpayer. On January 8, 2008, the Taxpayer submitted a notice of intent to file an administrative appeal with the Department. The notice indicated that the Taxpayer did not agree with the assessments and that the Taxpayer was gathering statistical data necessary to address the audit assessments.

DETERMINATION

Virginia Code § 58.1-1821 states, "Any 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.] Pursuant to the Department's Administrative Appeal Guidelines (the "guidelines") § 3 A, "[t]he 90-day limitations period begins on the calendar day after the date of assessment and continues for 90 consecutive calendar days (including weekends and holidays)." See Public Document (P.D.) 06-140 (11/29/06). The guidelines mandate that a taxpayer file a complete appeal within the 90-day limitation period. A complete appeal means an administrative appeal containing sufficient information so that the grounds upon which the taxpayer relies in contesting an assessment are fully set forth to allow the Tax Commissioner to make an informed final determination. See § 4.2 A of the guidelines.

In accordance with the guidelines, the Taxpayer was required to file a complete administrative appeal by January 22, 2008 and has not done so. Therefore, the Taxpayer's right to file an application for correction pursuant to Va. Code § 58.1-1821 is barred by statute.

Consolidated bills, with interest accrued to date, will be mailed shortly to the Taxpayer. No further interest will accrue provided the outstanding assessments are paid within 30 days from the bill dates. If payment is not received within the time allowed, updated bills with accrued interest will be mailed to the Taxpayer and collection action will proceed. Payment of the outstanding balance as shown on the consolidated bills should be returned to address listed on the bills.

The Code of Virginia section and public document cited 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 regarding this matter, please contact * of the Department's Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Janie E. Bowen

Tax Commissioner

AR/1-2052902063.Q