Tax Type
Local Taxes
Retail Sales and Use Tax
Description
Lodging rented for continuous occupancy; Local transient occupancy taxes
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
05-10-1988
May 10, 1988
Dear***************
This will reply to your letter of April 14, 1988, in which you inquire as to the applicability of local transient occupancy taxes to hotel rooms rented by an airline for the use of its employees for a period of 90 or more continuous days. I will also address the application of the 4 1/2% (3 1/2% state and 1% local) retail sales tax to such a transaction.
Transient Occupancy Taxes
The 1980 ruling referenced in your letter is applicable only to the retail sales tax. Local transient occupancy taxes are governed by state law and local ordinances and may or may not contain an exemption for transactions of the type referenced in your letter.
§58.1-3819 of the Code of Virginia provides all counties with the authority to levy a transient occupancy tax; however, this statute contains a specific exemption from the tax for "rooms or spaces rented for continuous occupancy by the same individual or group for thirty or more days in hotels, motels, boarding houses and travel campgrounds."
It must be noted, however, that Arlington and Fairfax Counties are not subject to the exemption for rentals of 30 or more days (see Chapter 433, 1973 Acts of the Assembly). The same also holds true for cities. In these localities, one must look to the ordinance imposing the tax in order to determine whether an exemption applies. As your hotel is located in Arlington County, you should contact the county's Commissioner of the Revenue in order to determine the application of the tax.
Retail Sales Tax
§58.1-602.14 of the Code of Virginia extends the sales tax to "rooms, lodgings, or accommodations furnished to transients for less than ninety continuous days." Based upon the facts presented, the rental of rooms to an airline for 90 or more continuous days would not be subject to the sales tax.
If you have any further questions, please do not hesitate to contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner