Tax Type
Retail Sales and Use Tax
Description
Public and private club fees
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
05-12-1987
May 12, 1987
Re: Ruling Request/ Sales and Use Tax
Dear ********************
This will reply to your letter of February 9, 1387 seeking a ruling whether a lump sum fee charged by a public or private club for the exclusive, short term use of all their facilities and premises including golf course, clubhouse and other facilities in connection with tournaments sponsored by ********* (taxpayer) qualifies for exemption from the sales and use tax.
It is our understanding that the fee charged by the clubs for the use of all of their facilities does not include charges for any items of tangible personal property such as food, beverages or clothing. We understand further that the only items of tangible personal property owned by the clubs which are made available to the taxpayer in connection with such lump sum fee are golf carts.
RULING
Section 58.1-603 of the Virginia Code imposes the sales tax on all sales, leases or rentals of tangible personal property. Accordingly, the rental of golf carts, golf clubs, and other items of tangible personal property by public or private clubs is deemed taxable under §630-10-23 of the Virginia Retail Sales and Use Tax Regulations. However, fees for the use of such clubs' courses are nontaxable under this same regulation section since the true object of such transactions is to gain access to a facility.
Similarly, the true object of the transactions described in this case is the exclusive, short term use of a private or public club's facilities and premises, and the tangible personal property made available to the taxpayer in connection with such transactions, (i.e., golf carts) is ancillary to its use of an entire facility.
Therefore, the lump sum fee charged by public or private clubs for the exclusive short term use of all of such clubs' facilities in connection with the tournaments sponsored by the taxpayer will not be subject to the tax provided no separate charge is made by the club for the sale or lease of any specific item or items of tangible personal property such as golf carts, umbrellas, etc.
This ruling does not apply to any other items which may be purchased by the taxpayer to be given away in connection with its sponsorship of such tournaments such as trophies, awards, shirts, jackets, tournament programs, souvenirs, etc. This ruling is also inapplicable to sales of tangible personal property by the clubs themselves or by concessionaires operating at such tournaments of food, beverages, souvenirs or any other items of tangible personal property.
I hope that all of the foregoing has responded to your question but please let me know if you have any further questions.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner