If any part of the sales price for which a credit was taken is subsequently reported to the dealer, it must be included in such dealer's next sales and use tax return.
The following example illustrates the operation of this section.
Example: Dealer A repairs an item of property for a customer. The total charge for such repair is $77.65, representing $50 in repair parts, $25 in separately stated, nontaxable repair labor, and $2.65 in tax. A reports the transaction and remits the tax thereon. After collecting $30, A determines that the remainder of the debt is uncollectible. A may claim a credit calculated as follows:
Allocation of Amount Previously Collected: | |
50 / 77.65 x $30 | Amount to be Allocated to Repair Parts = $19.32 |
Amount of Sales Price for Computing Credit = $50.00 - $19.32 = $30.68 | |
Amount of Credit which may be claimed = $1.63 (5.3% x $30.68) |
Since only the charge for the repair parts was previously reported as a taxable sale, only the tax on that portion of the remaining outstanding debt attributable to the charge for such parts may be taken as a credit. If any portion of the $30.68 remaining sales price is subsequently collected, such amount must be reported on the dealer's return for the period in which collected.
23 Va. Admin. Code § 10-210-160
Statutory Authority: § 58.1-203 of the Code of Virginia.