Tax Type
Retail Sales and Use Tax
Description
Request permission to include tax in sales price
Topic
Taxability of Persons and Transactions
Date Issued
07-05-2000
July 5, 2000
Re: Request for Ruling: Retail Sales and Use Tax
Dear ****
This is in response to your letter of June 22, 2000, submitted on behalf of your client ***** (the "Taxpayer'). The Taxpayer requests permission to include the retail sales tax in the sales price of food and beverages sold.
FACTS
The Taxpayer operates movie theaters in Virginia and makes sales of food and beverages from concession areas located inside the theaters. The Taxpayer seeks permission from the department to include the tax in the sales price of items sold at its movie theaters.
RULING
Code of Virginia Sec. 58.1-625 provides that a dealer is required to separately state the amount of the tax from the sales price or charge. Title 23 of the Virginia Administrative Code 10-210-340 further provides that "[i]dentification of the tax by a separate writing or symbol is not required provided that the amount of the tax is shown as a separate item on the record of transaction.' However, Code of Virginia Sec. 58.1-614(D) provides that when a dealer is able to demonstrate to the satisfaction of the Tax Commissioner that it is impractical to collect the tax in accordance with the bracket system it may be authorized to remit an amount based on a percentage of gross receipts which takes into account the inclusion of the sales tax.
Based on the information provided and under the provisions set forth in Code of Virginia Sec. 58.1-614(D), permission is hereby granted for the Taxpayer to include the tax in the sales price of food and beverage items sold in its concession areas prospectively from July 1, 2000. The Taxpayer's price listings for and signs advertising food and beverage items should indicate that the sales tax is included in the cost price of each item.
Based on the current sales and use tax rate of 4.5%, the Taxpayer should divide the total receipts for the period, inclusive of the sales tax collected, by a factor of 1.045 to derive the amount of sales tax which must be remitted to the department.
This ruling is applicable only to the situation presented. Any change in the factual circumstances upon which this ruling is based will invalidate this ruling. If you have any questions regarding this ruling, please contact ***** at the ***** department's Office of Tax Policy at *****
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/29502T
Re: Request for Ruling: Retail Sales and Use Tax
Dear ****
This is in response to your letter of June 22, 2000, submitted on behalf of your client ***** (the "Taxpayer'). The Taxpayer requests permission to include the retail sales tax in the sales price of food and beverages sold.
FACTS
The Taxpayer operates movie theaters in Virginia and makes sales of food and beverages from concession areas located inside the theaters. The Taxpayer seeks permission from the department to include the tax in the sales price of items sold at its movie theaters.
RULING
Code of Virginia Sec. 58.1-625 provides that a dealer is required to separately state the amount of the tax from the sales price or charge. Title 23 of the Virginia Administrative Code 10-210-340 further provides that "[i]dentification of the tax by a separate writing or symbol is not required provided that the amount of the tax is shown as a separate item on the record of transaction.' However, Code of Virginia Sec. 58.1-614(D) provides that when a dealer is able to demonstrate to the satisfaction of the Tax Commissioner that it is impractical to collect the tax in accordance with the bracket system it may be authorized to remit an amount based on a percentage of gross receipts which takes into account the inclusion of the sales tax.
Based on the information provided and under the provisions set forth in Code of Virginia Sec. 58.1-614(D), permission is hereby granted for the Taxpayer to include the tax in the sales price of food and beverage items sold in its concession areas prospectively from July 1, 2000. The Taxpayer's price listings for and signs advertising food and beverage items should indicate that the sales tax is included in the cost price of each item.
Based on the current sales and use tax rate of 4.5%, the Taxpayer should divide the total receipts for the period, inclusive of the sales tax collected, by a factor of 1.045 to derive the amount of sales tax which must be remitted to the department.
This ruling is applicable only to the situation presented. Any change in the factual circumstances upon which this ruling is based will invalidate this ruling. If you have any questions regarding this ruling, please contact ***** at the ***** department's Office of Tax Policy at *****
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/29502T
Rulings of the Tax Commissioner