SALT Report 3903 – On June 12, 2017, the department published final guidelines for refund claim procedures. According to the published document, the “Guidelines are intended to clarify the new legislation and to outline procedures for purchasers and dealers to request refunds from the Department in appropriate situations.”
Legislation was enacted July 1, 2016, prohibiting purchasers from receiving interest on a refund claim for erroneously paid Retail Sales and Use Tax for any period prior to the date the purchaser submits a complete refund claim to the Department. This limitation applies only in situations where the purchaser held a valid exemption certificate issued by the Department at the time of purchase but failed to present it to the merchant. The prohibition does not apply to “self-executed” or “self-issued” exemption certificates that purchasers download from the Department’s website and complete and sign.
The majority of Virginia Retail Sales and Use Tax exemption certificates are “self-executed” or “self-issued” by the taxpayer. Currently, the Department only issues exemption certificates to taxpayers who are engaged in specific types of businesses such as (1) data centers and their tenants under Va. Code § 58.1-609.3(18); (2) pollution control equipment and facilities under Va. Code § 58.1-609.3(9); (3) real property contractors allowed to purchase tangible personal property exempt of the tax in limited circumstances; and (4) (effective January 1, 2018) resellers of stamped cigarettes under Va. Code § 58.1-623.2. The Department also issues exemption certificates to organizations meeting the requirements for the non-profit entity exemption under Va. Code § 58.1-609.11. To obtain an exemption certificate issued by the Department, the taxpayer must apply in writing to the Department and demonstrate that it meets the statutory requirements for exemption.