Tax Type
Retail Sales and Use Tax
Description
Motion picture theater rentals
Topic
Taxability of Persons and Transactions
Date Issued
12-14-1984
December 14, 1984
Re: Request for Ruling/Sales and Use Tax
Dear ****
This will reply to your letter of October 19, 1984, in which you submit a request for a ruling on the applicability of the sales and use tax to motion picture theater rentals.
You note in your letter that your studio frequently contracts with advertising agencies to promote films in a given regional market. In connection with such promotions, an advertising agency will frequently arrange for the screening of a new film in local theaters prior to its general release. In one such instance, a Virginia advertising agency has billed the sales and use tax to your studio for its rental of a theater. Accordingly, you request a ruling on the applicability of the tax to such rentals.
§§ 58-441.4 and 58-441.5 of the Code of Virginia impose the sales and use tax only upon the sale, lease, or other use of tangible personal property and the rental of transient accommodations in Virginia. Inasmuch as a motion picture theater falls into neither category, its rental fee is not subject to the sales and use tax. However, if such a rental fee is not separately stated and is included in the total charge from an advertising agency for the sale of tangible personal property and services, the entire charge, including the theater rental, is taxable.
Please feel free to contact the department if you have any further questions.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner