Tax Type
Retail Sales and Use Tax
Description
Permission to include tax in sales price
Topic
Collection of Tax
Date Issued
11-21-1984
- November 21, 1984
Re: Ruling Request: Sales and Use Tax
Dear ******
This will reply to your letter of August 17, 1984 concerning permission for ***** (the "Theater") to make retail concession sales on a sales tax included basis.
Facts
The Theater operates ***** motion picture theaters at which retail concession sales are made. A large number of patrons must be served in a relatively short period of time to accommodate theater performance schedules. Requiring attendants to refer to sales tax bracket tables, ring up sales on a cash register and make change in small coin denominations for each sale impedes a theater's full sales potential. Accordingly, the Theater is considering pricing the merchandise at even dollar amounts or twenty-five cent multiples and seeks permission to include sales tax in whatever price is set. The Theater would post notices on or near the price boards advising that all prices included sales tax.
Determination
The Theater is granted permission, under the conditions set forth below, to include the sales tax in the price of merchandise sold at the retail concession stands of the ***** locations listed on Exhibit A attached to your letter.
Permission is contingent upon the Theater's providing a breakdown of prices indicating the base price of each item and the amount of tax included, which would be available to consumers upon request, and posting notices at each of the ***** locations advising consumers that all prices include sales tax. The tax liability of the Theater for each location will be computed by dividing total receipts for each location, including the sales tax, by 1.04 to arrive at the amount on which the tax for each location must be computed.
This ruling does not in any way set a precedent for the collection and payment of Virginia sales tax and is applicable only to the situation as described herein. Any change in the factual situation of the Theater shall invalidate this ruling.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner