Form Ct-2 - Guidelines And Rules For The Virginia Communications Taxes (Page 9 of 16) in pdf

Collection of Tax

Direct Payment Permits

Every provider must separately state the amount of the

Persons who use taxable communications services

tax and add that tax to the sales price of the service.

within the Commonwealth may apply to TAX to pay

Thereafter, the tax will be a debt from the customer to

the communications sales tax directly to TAX and waive

the provider until paid and recoverable at law in the

collection of the tax by the provider. No such authority

same manner as other debts. All sums collected by a

will be granted or exercised except upon application to

provider will be held in trust for the Commonwealth.

TAX and issuance by TAX of a direct payment permit.

(Source: Code of Va. § 58.1-651) The revenues collected

If a direct payment permit is issued, then payment of the

must be remitted monthly by each provider to TAX

communications sales tax on taxable communications

when the provider files its Form CT-75, Virginia

services must be made directly to TAX by the permit

Communications Taxes Return (see “Communications

holder. On or before the twentieth day of each month

Taxes Return”).

every permit holder must file with TAX a return for

the preceding month, in a form prescribed by TAX,

In the event that a provider lacks nexus and is not

showing:

registered for the collection of the tax, the purchaser is

liable for the use tax (see “Use Tax” below). (Source:

•

The total value of the taxable communications

Code of Va. § 58.1-648)

services used;

In the event that a provider collects the communications

•

The amount of tax due from the permit holder,

sales tax on exempt or non-taxable transactions,

which amount must be paid to TAX with the

the provider must remit the erroneously or illegally

submitted return; and

collected tax to TAX unless or until the provider can

•

Any other information TAX deems necessary.

affirmatively show that the tax has been refunded to

TAX, upon written request by the permit holder, may

the customer or credited to his account. A provider who

grant a reasonable extension of time for filing returns

intentionally neglects, fails or refuses to collect the tax

and paying the tax. Interest on the tax will be chargeable

on a taxable sale of communications services is liable

on every extended payment at the rate determined in

for and must pay the tax himself. Any provider who

accordance with Code of Va. § 58.1‑15.

intentionally neglects, fails or refuses to pay or collect

A direct payment permit will continue to be valid until

the tax is guilty of a Class 1 misdemeanor. (Source:

surrendered by the holder or cancelled for cause by TAX.

Code of Va. § 58.1-659)

A person holding a direct payment permit that has not

Use Tax

been cancelled will not be required to pay the tax to the

Generally, the communications sales tax is collected

provider. Such persons must notify each provider from

and remitted by providers even though the tax is

whom purchases of taxable communications services

imposed on the customer. However, when a customer

are made of their direct payment permit number and that

purchases taxable communications services from an

the tax is being paid directly to TAX. Upon receipt of

out-of-state provider who is not registered and is not

notice, a provider will be absolved from responsibility

required to remit the communications sales tax, the

for the collection and remittance of the tax with respect

customer is required to remit the tax directly to TAX

to sales of taxable communications services to the direct

using Form CT-7, Virginia Communications Taxes

payment permit holder. Providers who make sales upon

Consumer Use Return. Form CT-7 and instructions

which the tax is not collected because the purchaser

are available on-line in the Download Forms section of

holds a direct payment permit must maintain records

TAX’s web site, located at Form

in a manner that the amount involved and identity of

CT-7 should be used by both business and residential

each purchaser may be ascertained.

customers. No prior registration with TAX is required

Upon the cancellation or surrender of a direct payment

for taxpayers filing a Form CT-7.

permit, the communications sales tax will thereafter

Providers should report any taxable personal use of

apply to the former direct payment permit holder, and

communications services when filing their Form CT-75,

that person must promptly notify in writing providers

Virginia Communications Taxes Return. Providers

from whom purchases of taxable communications

should not use Form CT-7.

services are made of the cancellation or surrender of the

direct payment permit. Upon receipt of such a notice,

the provider must collect the communications sales

tax with respect to all sales of taxable communications

services thereafter made to the former direct payment

permit holder. (Source: Code of Va. § 58.1-658)

CT-2 W

REV 11/06

Page

Form Ct-2 - Guidelines And Rules For The Virginia Communications Taxes Page 9

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