2006 Code of Virginia § 58.1-623.1 - Misuse of exemption certificates; suspension of exemptions; penalties

58.1-623.1. Misuse of exemption certificates; suspension of exemptions;penalties.

A. Whenever the Tax Commissioner determines that any person has misused anexemption certificate, the Tax Commissioner, after giving such person10-days' notice in writing specifying the time and place of hearing andrequiring him to show cause why the exemption should not be suspended, maysuspend the exemption held by such person. The notice may be personallyserved or served by registered mail directed to the last known address ofsuch person.

B. Any person who knowingly uses or gives an exemption certificate during aperiod of suspension of an exemption under this section shall be guilty of aClass 1 misdemeanor.

C. It shall be the duty of any person whose exemption is suspended under theprovisions of this section to notify each dealer from whom purchases orleases of tangible personal property are made, of the suspension of itsexemption, and of the invalidity of any exemption certificates filed withsuch dealers.

D. In lieu of the suspension of a person's exemption under subsection A, theTax Commissioner may assess a penalty of up to $1,000 for the misuse of anexemption certificate by that person or by any other person who, with theconsent or knowledge of the exemption holder, has misused the certificate.The penalty shall be assessed and collected as a part of the tax, and theperson so assessed may appeal the penalty pursuant to the provisions ofArticle 2 ( 58.1-1820 et seq.) of Chapter 18 of this title.

E. In any instance in which the Tax Commissioner determines that there hasbeen any misuse of an exemption certificate, the person holding the exemptionshall be liable for the full amount of tax, and any interest thereon,applicable to any purchase improperly made with his exemption certificate.

F. The suspension of the exemption shall require that the person pay the fullamount of the tax at the time of purchase and apply for a refund of the taxso paid. No interest shall be paid on any such refund. Upon application ofthe person whose certificate has been suspended, the Tax Commissioner, forgood cause shown, may reinstate the person's certificate; however, any suchsuspension period shall run for at least one year.

G. Notwithstanding 58.1-3, the Tax Commissioner may report any grossmisuses of exemption certificates to the Secretary of Finance and thechairmen of the money committees, for their confidential use, prior to thebeginning of the following session of the General Assembly.

(1989, c. 12; 1999, cc. 762, 776; 2002, c. 775; 2003, cc. 757, 758.)