Could a Virginia day care center remove use tax from fixed-asset purchases by stating that sales tax had already been paid?

Plain-English summary

Virginia upheld use tax on the day care center's fixed-asset purchases because the taxpayer provided no proof that sales tax had already been paid. The day care center disputed several audited purchases by asserting that tax was paid at purchase, but it supplied no supporting documentation.

Virginia imposes use tax on the cost price of tangible personal property used or consumed in the Commonwealth. Without evidence of prior tax payment, the taxpayer did not establish any basis to revise the audit.

Common questions

Q: Is a statement that sales tax was paid enough to remove a use-tax assessment?
A: No. In this ruling, Virginia required documentation supporting the claim.

Q: Did the Department revise any part of the assessment?
A: No. It found no basis for revision because no proof of prior tax payment was supplied.

Citations and references

• Va. Code § 58.1-604.

Subject

Day care center and tax on its fixed asset purchases; Documentation absent

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 12-31

Original ruling text

March 23, 2012

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

Dear *:

This reply is in response to your letter submitted on behalf of * (the "Taxpayer"), in which you request correction of the retail sales and use tax assessment issued for the period June 2007 through May 2010. I apologize for the delay in responding to your letter.

FACTS

The Taxpayer operates a day care center and was assessed use tax on its fixed asset purchases. The Taxpayer states in its protest that sales tax was paid on several assessed purchases; however no documentation is offered to support the claim.

DETERMINATION

Virginia Code § 58.1-604 imposes a tax upon the use and consumption of tangible personal property in the Commonwealth of Virginia. The tax is imposed on the cost price of each article of tangible personal property used or consumed in the state. As the Taxpayer has not provided any documentation that evidences the payment of the tax on its purchases of the assets, I find that use tax was properly assessed in the audit. Accordingly, the Taxpayer has provided no basis to revise the assessment.

The Code of Virginia section cited is 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 determination, you may contact * in the Department's Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Craig M. Burns

Tax Commissioner

AR/1-4806407364.M