Tax Type
Retail Sales and Use Tax
Description
Virginia and its political subdivisions
Topic
Exemptions
Date Issued
08-26-1985
August 26, 1985
Re: Request for Ruling
Dear ****
This will reply to your letter of July 23, 1985, in which you submit a request for a ruling on the applicability of the sales and use tax to the ***** Board.
Section 58.1-608.18 of the Code of Virginia provides an exemption from the sales and use tax for "[t]angible personal property for use or consumption by the Commonwealth, any political subdivision of the Commonwealth, or the United States." A review of the statute under which localities are permitted to implement programs similar to that of the ***** (Board) and the city ordinance creating the Board indicates that the Board is an agency of the city and thus exempt from the tax as a political subdivision of the Commonwealth.
For your information, a copy of Section 63O-10-45 of the Virginia Retail Sales and Use Tax Regulations, relating to governmental purchases and sales is enclosed. As noted in the regulation, exempt purchases may only be made pursuant to official governmental purchase orders paid for out of public funds. Absent an official purchase order and/or payment from public funds, a purchase by a government will be deemed taxable.
It should also be noted that the Board may not rent accommodations or purchase meals exclusive of the tax, even when done pursuant to official purchase orders paid for out of public funds. This policy is based directly on a May 14, 1970 opinion of the Attorney General (copy attached). In his opinion, the Attorney General concluded that the statutory sales and use tax exemption for state government did not apply to the rental of accommodations inasmuch as such accommodations did not constitute "tangible personal property" as exempted by then Virginia Code Section 58-441.6(p) and present Section 58.1-608.18. While the Attorney General concluded that meals did constitute tangible personal property, he opined that an exemption for meals paid for by the Commonwealth was unavailable as the Commonwealth neither "used" or "consumed" the meals as required under the statutory governmental exemption.
I hope that this answers your questions relating to the application of the tax to the Board, but please feel free to contact the department if you have any further questions.
Sincerely,
W. H. Forst
Tax Commissioner
Re: Request for Ruling
Dear ****
This will reply to your letter of July 23, 1985, in which you submit a request for a ruling on the applicability of the sales and use tax to the ***** Board.
Section 58.1-608.18 of the Code of Virginia provides an exemption from the sales and use tax for "[t]angible personal property for use or consumption by the Commonwealth, any political subdivision of the Commonwealth, or the United States." A review of the statute under which localities are permitted to implement programs similar to that of the ***** (Board) and the city ordinance creating the Board indicates that the Board is an agency of the city and thus exempt from the tax as a political subdivision of the Commonwealth.
For your information, a copy of Section 63O-10-45 of the Virginia Retail Sales and Use Tax Regulations, relating to governmental purchases and sales is enclosed. As noted in the regulation, exempt purchases may only be made pursuant to official governmental purchase orders paid for out of public funds. Absent an official purchase order and/or payment from public funds, a purchase by a government will be deemed taxable.
It should also be noted that the Board may not rent accommodations or purchase meals exclusive of the tax, even when done pursuant to official purchase orders paid for out of public funds. This policy is based directly on a May 14, 1970 opinion of the Attorney General (copy attached). In his opinion, the Attorney General concluded that the statutory sales and use tax exemption for state government did not apply to the rental of accommodations inasmuch as such accommodations did not constitute "tangible personal property" as exempted by then Virginia Code Section 58-441.6(p) and present Section 58.1-608.18. While the Attorney General concluded that meals did constitute tangible personal property, he opined that an exemption for meals paid for by the Commonwealth was unavailable as the Commonwealth neither "used" or "consumed" the meals as required under the statutory governmental exemption.
I hope that this answers your questions relating to the application of the tax to the Board, but please feel free to contact the department if you have any further questions.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner