Tax Type
Retail Sales and Use Tax
Description
Tax on items for use by guests in their hotel rooms.
Topic
Appropriateness of Audit Methodology
Property Subject to Tax
Date Issued
02-25-2002
February 25, 2002
Re: Request for Ruling: Retail Sales and Use Tax
Dear *****:
This is in reply to your letter in which you request a ruling regarding the application of the retail sales and use tax to certain items used in conjunction with room accommodations.
FACTS
***** (the "Taxpayer") operates a hotel, providing services and accommodations to individuals and groups. Of particular concern in this case are purchases of coffee and tea items for use by guests in their hotel rooms. The Taxpayer contends that these items are included in the cost of the accommodations in the same manner as continental breakfast bar items that are not subject to the tax at the time of purchase. The Taxpayer seeks a refund of the tax paid on the coffee and tea items.
RULING
Public Document 98-117 (01/10/98) states that purchases of amenities for use in guest rooms are taxable. There is no basis to revise this longstanding policy. First, regardless that these items are usually consumed by guests, there is no separate charge on the guests' bill. Further, the price of the accommodation is not dependent on the guests' decision to use or not use these items. These items, including coffee and tea, are provided as an integral part of the accommodations and are purchased for the Taxpayer's own use or consumption. Therefore, the items at issue may not be purchased exempt for resale. Accordingly, the department's assessment is correct and there is no basis to allow for a refund.
If you should have any questions regarding this matter, please contact ***** of the department's Office of Policy and Administration, Appeals and Rulings, at ***** @tax.state.va.us or at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
AR/37827Q
Related Documents
Rulings of the Tax Commissioner