Could Virginia consider a consumer-use-tax appeal mailed after the 90-day assessment deadline?

Plain-English summary

Virginia barred the appeal because the taxpayer missed the 90-day filing deadline. The assessment was dated March 10, 2011. Counting from the next calendar day, the complete appeal was due June 8, 2011.

An earlier fax was illegible, and the taxpayer did not answer the Department's request for a legible copy, documentation, or proof that an appeal had been filed before June 9. The Department's records instead showed a legible appeal dated July 12 and mailed July 13.

Both the assessment notice and the audit supervisor's letter explained the 90-day rule. Because Virginia strictly enforced that period, the Commissioner did not consider the merits.

The taxpayer had paid the original audit liability, but not within 30 days of assessment. Va. Code § 58.1-1812(A) therefore required additional interest until payment.

What this means for you

• Count the 90 consecutive calendar days beginning the day after the assessment date.
• Weekends and holidays are included in the count under the cited regulation.
• Submit a complete, readable appeal and retain proof of timely delivery.
• Paying after 30 days can create additional interest even when the principal assessment is later paid.

Common questions

Q: Did the Commissioner decide whether the audit was correct?
A: No. The late filing barred consideration of the appeal.

Q: Did paying the original liability stop all interest?
A: Not retroactively. Additional interest had accrued because payment was not made within 30 days.

Citations and references

• Va. Code §§ 58.1-1812(A) and 58.1-1821.
• 23 VAC 10-20-165(C)(1).

Subject

Strict enforcement of the 90-day limitations period for filing a timely appeal.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 11-208

Original ruling text

December 30, 2011

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

Dear *:

This is in response to your letter in which you request correction of the consumer use tax assessment issued to * (the "Taxpayer") as a result of an audit for the period January 2005 through May 2010.

Because the appeal sent by facsimile was not legible, a representative of the Department's Appeals and Rulings Unit contacted you by letter dated July 21, 2011, and requested a legible copy of your appeal letter and certain documentation. You were also requested to provide a copy of an appeal and proof of delivery if filed prior to June 9, 2011. You did not respond to such requests. However, the Department's records indicate that you had also mailed a legible appeal that was dated July 12, 2011, but mailed on July 13, 2011.

In this case, a notice of assessment was issued to the Taxpayer on March 10, 2011. The reverse side of the notice of assessment contains the following statement: "You may appeal this assessment at any time within 90 days of the date of assessment." On March 8, 2011, ** (the approving supervisor of the audit) sent you a letter notifying you that, "Your appeal must be submitted within 90 days of the audit assessment bill date."

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 assessment, apply for relief to the Tax Commissioner." Pursuant to Title 23 of the Virginia Administrative Code 10-20-165 C 1, the 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)."

Based on the foregoing, the Taxpayer was required to file a complete appeal by June 8, 2011. The Taxpayer, however, filed its administrative appeal on July 13, 2011. The Department strictly enforces the 90-day limitations period for filing a timely administrative appeal. As demonstrated by the notice of assessment and the letter from the approving audit supervisor, the Taxpayer was given sufficient notice in writing of the 90-day rule for appealing an assessment. Because the Taxpayer failed to file a timely appeal, its appeal is barred from consideration.

I understand that the Taxpayer paid all of the original audit liability. Because the payment was not timely remitted within 30 days from the date of assessment, the Taxpayer became liable for additional interest on the assessment. The reverse side of the notice of assessment states: "If the assessment is not paid within 30 days, interest will accrue on the unpaid balance." This statement is consistent with subsection A of Va. Code § 58.1-1812, which mandates the accrual of interest on the unpaid balance of an assessment if the taxes, penalties and interest are not paid within thirty days of the date of assessment. The Taxpayer owes such additional accrued interest in the amount of * which should be paid immediately to avoid further interest charges.

The Code of Virginia sections and regulation cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site. If you have any questions about this determination, you may contact in the Department's Office of Tax Policy, Appeals and Rulings, at *.

Sincerely,

Craig M. Burns

Tax Commissioner

AR/1-4831961920.R