Tax Type
Retail Sales and Use Tax
Description
Meals furnished to employees
Topic
Taxability of Persons and Transactions
Date Issued
11-19-1987
November 19, 1987
Re: Ruling Request/Sales and Use Tax
Dear ***************
This will reply to your letter of July 16, 1987 concerning the applicability of the Virginia retail sales and use tax to meals provided to your corporation's employees.
Facts
The Taxpayer is a nonprofit licensed nursing home exempt from federal income tax under I.R.C. §501(c)(3) and from Virginia retail sales and use tax for tangible personal property purchased for use or consumption by the Taxpayer (Va. Code §53.1-608(23). The Taxpayer provides meals to its employees on the premises as a service and a benefit and for the convenience of the Taxpayer. The employees are charged a portion of the cost of the meal. The Taxpayer asserts that it is not liable for collecting sales tax on the price charged the employees.
Determination
§58.1-603 of the Code of Virginia imposes the sales tax upon "each item or article of tangible personal property when sold at retail...in this State." Virginia Regulation 630-10-64 C interprets this statute, requiring an employer who sells meals to employees to add the sales tax to the charge and pay the tax on gross sales. Similarly, VR 630-10-74 B requires a nonprofit organization which regularly sells tangible personal property to register as a dealer and collect and pay the tax on retail sales.
From the information presented, the Taxpayer does provide meals to its employees on a regular basis. Based on the foregoing, I must conclude that the Taxpayer must register with the Department as a dealer and collect and remit the sales tax on the price charged to its employees for the meals.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner