Virginia Tax Commissioner Upholds Sales Tax Assessment on Convenience Store for Underreported Cigarette Sales

The Virginia Tax Commissioner March 16 upheld a sales and use tax assessment on Taxpayer’s under-reported cigarette sales. The Department of Taxation issued an assessment for sales tax and interest on untaxed cigarettes based on Taxpayer’s tax-exempt purchases for resale from distributors. Taxpayer, a convenience store, filed amended returns and paid the additional tax. The department assessed additional tax, a late payment penalty, and interest based on the amended returns, which Taxpayer paid. Taxpayer contested the assessment and contended that the sales tax collected and remitted on its over-reported food sales would cover the sales tax on the under-reported cigarette ...