Virginia Tax Commissioner Issues Ruling on Sales Tax Assessment for Communications Contractor

The Virginia Tax Commissioner issued a ruling on the retail sales and use tax assessment for a communications contractor providing fiber optic cable network installation and repair services in Virginia. On audit, purchase invoices where tax was not charged were found during the sample period and used to calculate an error factor, which was applied to the total expenses by month to determine the taxpayer’s liability. The taxpayer disputed the Tax Department’s methodology in calculating its tax liability, asserting it was overstated and provided additional documentation not available during the initial audit. The Commissioner upheld the Tax Department’s methodology but ...