Tax Type
Retail Sales and Use Tax
Description
Hotel accommodations and meals. Federal government employees
Topic
Taxability of Persons and Transactions
Date Issued
04-03-1985
April 3, 1985
Re: Request for Ruling/Sales and Use Tax
Dear ****
This will reply to your letter of March 5, 1985, requesting a ruling on the correct application of the sales and use tax to the rental of hotel and motel accommodations by the ****** and the ***** of ***** entered into an agreement whereby ***** would provide rooms to certain ***** employees at a given rate. The room charges were billed directly to ***** and paid with ***** funds. ***** representatives indicate that they cannot remove sales and use taxes from ***** bills without the prior approval of the ***** department.
Under Federal law at 45 U.S.C.A. 546(b), ***** is "exempt from any taxes or other fees imposed by any state ... which are levied on the corporation or any railroad subsidiary thereof." Therefore, ***** may purchase any item of tangible personal property, including meals, exclusive of the sales and use tax. Furthermore, ***** may pay for the rental of hotel and motel accommodations exclusive of the sales and use tax as long as such purchases of accommodation are paid directly out of ***** funds, and not paid by its employees and then reimbursed by *****.
Therefore, if ***** is either billed directly for such rentals or if its employees use an ***** credit card to pay for the rentals, they will meet the requirement described above and be exempt from the sales and use tax.
Please contact us if you have any further questions.
Sincerely,
W. H. Forst
Tax Commissioner
Re: Request for Ruling/Sales and Use Tax
Dear ****
This will reply to your letter of March 5, 1985, requesting a ruling on the correct application of the sales and use tax to the rental of hotel and motel accommodations by the ****** and the ***** of ***** entered into an agreement whereby ***** would provide rooms to certain ***** employees at a given rate. The room charges were billed directly to ***** and paid with ***** funds. ***** representatives indicate that they cannot remove sales and use taxes from ***** bills without the prior approval of the ***** department.
Under Federal law at 45 U.S.C.A. 546(b), ***** is "exempt from any taxes or other fees imposed by any state ... which are levied on the corporation or any railroad subsidiary thereof." Therefore, ***** may purchase any item of tangible personal property, including meals, exclusive of the sales and use tax. Furthermore, ***** may pay for the rental of hotel and motel accommodations exclusive of the sales and use tax as long as such purchases of accommodation are paid directly out of ***** funds, and not paid by its employees and then reimbursed by *****.
Therefore, if ***** is either billed directly for such rentals or if its employees use an ***** credit card to pay for the rentals, they will meet the requirement described above and be exempt from the sales and use tax.
Please contact us if you have any further questions.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner