Tax Type
Retail Sales and Use Tax
Description
Government credit cards
Topic
Taxability of Persons and Transactions
Date Issued
01-14-1988
January 14, 1988
Re: Request for Ruling/Sales and Use Tax
Dear**************
This will reply to your letter dated November 24, 1987 in which you request a ruling on the application of the sales and use tax to the rental of hotel rooms by law enforcement agents of the **************** (Bureau) while they are on official business.
FACTS
Bureau is a federal agency which has issued Diners Club cards to all employees who have a need to perform official government travel. Use of the credit card is limited to expenses incurred incident to officially authorized government travel. Each card is identified as being issued through the U.S. Department of the Treasury. Law enforcement agents of the Bureau have received Diners Club cards for use while on official business. You request a ruling on the applicability of the sales and use tax when agents of the Bureau use their Diners Club cards to pay for the rental of hotel rooms.
RULING
§58.1-608(18) of the Code of Virginia provides an exemption from the sales and use tax for "tangible personal property for use or consumption by...the United States". According to Virginia Regulation 630-10-45, this exemption is deemed to apply only when "the purchases are pursuant to required official purchase orders to be paid out of public funds".
The regulation further states:
-
- If a federal employee is traveling on government business and payment for meals and lodging is made directly by the federal government pursuant to a purchase order (e.g., by direct billing to government or use of government credit card), no tax will apply.
- If a federal employee is traveling on government business and payment for meals and lodging is made directly by the federal government pursuant to a purchase order (e.g., by direct billing to government or use of government credit card), no tax will apply.
In this regard, since Bureau is a federal agency and the cards are identified as government credit cards, the exemption will apply to the rental of hotel rooms by agents who use their ******* cards, provided the credit card bills will be paid directly by the federal government.
If you have any further questions regarding this matter, please do not hesitate to contact me.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner