Tax Type
Retail Sales and Use Tax
Description
Food service provided to college; Equivalent meal plan
Topic
Exemptions
Date Issued
08-29-1990
August 29, 1990
Re: Request for Ruling/Sales and Use Tax
Dear*****************
This will reply to your letter dated May 30, 1990 in which you request a ruling on the applicability of the sales and use tax to dining services provided to colleges and universities.
FACTS
**********(the "Taxpayer") is a food service operator which contracts with schools, colleges and universities to provide dining services for their students and faculty. A student purchases directly from the college or university a meal plan which is invoiced as part of the student's room, board or tuition charge. The purchase of a meal plan entitles the student to a specific number of meals per week/semester.
If a student misses a regularly scheduled meal, he may obtain an "equivalent meal" at the snack bar or convenience store located on the campus. The amount a student may obtain in lieu of cash at these operations is equivalent to the value of a meal assigned by the college. on a monthly basis the college reimburses the Taxpayer for the number of meals and "equivalent meals" redeemed.
The Taxpayer requests a ruling on the applicability of the sales and use tax to the value of "equivalent meals".
RULING
Virginia Retail Sales and Use Tax Regulation 630-10-96(A)(4) provides that institutions of learning must collect the tax on retail sales of meals to students or others if the price of the meals is not included in room, board or tuition charges or fees.
Since the meal plans provided by the Taxpayer are included as part of a student's room, board or tuition charges, the meals are not subject to the sales and use tax. This applies to charges for regularly scheduled meals and the value of "equivalent meals" that are redeemed as part of the college's meal plan and reimbursed by the college.
If you have any further questions, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner