90-32 | Virginia Tax

Tax Type

Retail Sales and Use Tax

Description

Hotel room lodging paid by employees of federal government

Topic

Taxability of Persons and Transactions

Date Issued

03-08-1990

March 8, 1990

Re: Request for Ruling/ Sales and Use Tax

Dear ****

This will reply to your letter of February 16, 1990 in which you request a ruling on the applicability of the Virginia retail sales and use tax to the rental of hotel rooms by military personnel.

Facts

Personnel of the ***** are planning a Military Law Update Conference for Naval Reserve attorneys. The conference is tentatively scheduled to be held at a Virginia hotel in September, 1990. Approximately 250 military personnel will receive orders from several separate command units to attend the conference. The military personnel will pay for the hotel lodging with personal funds and will be reimbursed by the federal government. You request a ruling on the applicability of the sales and use tax to the hotel room rental charges since the personnel will be using the hotel for a government purpose.

Ruling

Virginia Regulation 630-10-45 (copy enclosed) describes in detail how the Virginia retail sales and use tax applies to rentals of hotel rooms by the federal government and federal employees. This regulation provides in pertinent part that:

- ...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. However, if the employee pays for the meals and lodging with personal funds and will be reimbursed by the government or utilizes a travel advance, no exemption is available even though the employee may be traveling pursuant to official government orders... (Emphasis added).

As can be seen from the above, there is no exemption available unless accommodations are paid for directly by the federal government pursuant to an official purchase order, government credit card, or government check. Applying the facts in this case to the regulation cited above, I find that the Military Law Update Conference attendees will not qualify for exemption from the Virginia retail sales and use tax when their purchases will be paid for with personal funds, notwithstanding that the attendees will be traveling pursuant to government orders and reimbursed by the government.

I hope this information has answered your questions; however, please contact the department if you have additional questions.

Sincerely,

W. H. Forst
Tax Commissioner

Rulings of the Tax Commissioner