Virginia Solid Surface Countertops Sales Taxable

As a result of an audit, a Virginia taxpayer issued a letter requesting correction of a retail sales and use tax assessment. According to the taxpayer, no use tax liability should have been assessed because its customers (wholesalers/contractors) charge sales tax on the solid surface countertops sold and installed by the taxpayer, and by assessing use tax under these circumstances double taxation would be applied. Furthermore, the taxpayer also contended it was not given prior notice of any policy change, especially since the prior audit did not apply use tax to the solids surface materials furnished and installed. The Virginia Tax Commissioner found the assessment by the Department of Taxation to be correct and considered the taxpayer the user or consumer of all materials used in transactions requiring it to sell and install kitchen countertops, regardless of whether made with laminated, sold surface, or natural materials. The taxpayer failed to furnish any documentation from the prior audit period in support of its contentions and in fact, a review of the prior audit report showed that the taxpayer was engaged in the fabrication of laminated countertops for sale to home builders, distributors, and retailers. The taxpayer’s sales of solid surface countertops and related materials were subject to Virginia retail sales and use tax. (Ruling of Commissioner, P.D. 09-102, Virginia Department of Taxation, July 24, 2009)

Posted on March 30, 2010