Tax Type
Retail Sales and Use Tax
Description
Meals and lodging for local disaster victims; Application of local taxes
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
04-06-1988
April 6, 1988
Re: Request for Ruling: Sales and Use Tax and Local Transient Occupancy and Meals Taxes
Dear***************
This will reply to your February 22, 1988 letter requesting a ruling on the. applicability of the retail sales and use tax and the local transient occupancy and meals taxes to purchases made by the ********************* ("Taxpayer") on behalf of local disaster victims.
Facts
As part of its functions, Taxpayer provides funding for temporary meals and lodging for disaster victims. The hotel or motel providing the meals and lodging bills the Taxpayer directly for these charges. The locality in which the Taxpayer operates imposes a local meals and a local transient occupancy tax, which is included on the Taxpayer's bill for meals and lodging for the victims. You have asked whether such taxes are properly applied.
Ruling
Taxpayer enjoys a sales and use tax exemption under the provisions or Va. Code. §58.1-608(18) which exempts "Tangible personal property for use or consumption by the . . . United States." The Department has determined that based upon the provisions of §§36 USCA 1 et. seq. Taxpayer is an agency or the federal government and is entitled to the exemption under Va. Code. §68.1-608(18). Therefore, to the extent that vendors bill the Taxpayer directly for purchases, including meals and lodging provided to disaster victims, the retail sales and use tax shall not apply. Enclosed are an October 27, 1969 letter which clearly sets forth this policy and an August 29, 1969 letter addressing the ************************** purchasing procedures as they relate to a sales and use tax exemption.
Cities and certain counties are authorized to impose local taxes on transient room rentals and meals pursuant to Va. Code §§58.1-3819 and 58.1-3840, copies of which are enclosed. State statutes do not contain any requirement that the localities recognize retail sales and use tax exemptions in the administration of these local taxes. As a practical matter, many localities do adhere to the retail sales and use tax exemptions for ease of administration of the meals and transient occupancy taxes; however, this is voluntary. Therefore, the determination or whether Taxpayer qualifies for exemption from the local meals and transient occupancy taxes must be made by the locality.
If we can answer any additional questions, please let us know.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner