Tax Type
Retail Sales and Use Tax
Description
The facilities are considered real property, not tangible personal property.
Topic
Property Subject to Tax
Date Issued
09-22-2010
September 22, 2010
Re: Request for Ruling: Retail Sales and Use Tax
Dear *****:
This is in response to your letter submitted on behalf of ***** (the "Taxpayer"), in which you request a ruling on the application of the retail sales and use tax to the rental of its sports facilities.
FACTS
The Taxpayer's Department of Recreational Sports (the "department") rents real property to external, non-exempt, entities from time to time. Examples of the property being rented by the department include pools, an indoor gymnasium (i.e., basketball court), and outdoor sport facilities (i.e., tennis courts). The facilities are rented for such activities as sports camps and team practices. The rentals do not include any tangible personal property.
RULING
Virginia Code § 58.1-603 levies "a license or privilege tax upon every person who engages in the business of selling at retail or distributing tangible personal property in this Commonwealth, or who rents or furnishes any of the things or services taxable under this chapter, or who stores for use or consumption in this Commonwealth any item or article of tangible personal property as defined in this chapter, or who leases or rents such property within this Commonwealth ...." [Emphasis added.]
Virginia Code § 58.1-602 defines tangible personal property as "personal property which may be seen, weighed, measured, felt, or touched, or is in any other manner perceptible to the senses ...."
In Public Document (P.D.) 92-141 (8/10/92), the taxpayer leased a nursing home facility. The public document states, "the lease of real property and fixtures attached thereto is not subject to the sales tax."
The facilities described in the Taxpayer's ruling request are considered real property, not tangible personal property as defined in Va. Code § 58.1-602. Accordingly, pursuant to Va. Code § 58.1-603 and P.D. 92-141, the Taxpayer is not required to collect and remit the sales tax on the rental of the facilities at issue.
The response is based on the facts provided as summarized above. Any change in facts or the introduction of new facts may lead to a different result.
The Code of Virginia sections and public document cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site. If you have any questions about this response, you may contact ***** in the Department's Office of Tax Policy, Appeals and Rulings, at *****.
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- Sincerely,
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- Linda D. Foster
Deputy Tax Commissioner
- Linda D. Foster
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AR/1-4506144029.P
Rulings of the Tax Commissioner