Tax Type
Retail Sales and Use Tax
Description
Taxable Accommodations.
Topic
Payment and Refund
Property Subject to Tax
Date Issued
04-01-2002
April 1, 2002
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear *****:
This is in reply to your letter of January 11, 2002, in which you seek correction of the department's retail sales and use tax audit assessment issued to ***** (the "Taxpayer") for the period November 1998 through October 2001. I note that the department's assessment has been paid in full.
FACTS
The Taxpayer is a nonprofit organization that has a meeting hall that is rented to various businesses and individuals for Christmas parties, reunions, business meetings and similar functions. The department's audit held these rentals as taxable accommodations. The Taxpayer disagrees with the department's assessment contending that its charges for the use of the meeting hall, which does not involve the leasing or furnishing of tangible personal property, are not subject to the tax. Accordingly, the Taxpayer seeks a revision of the audit.
DETERMINATION
Title 23 of the Virginia Administrative Code (VAC) 10-210-4040 provides that charges for rooms, lodgings or accommodations furnished to transients by a hotel, motel, inn, tourist camp or cabin, camping grounds, club or any other similar place furnished for less than 90 continuous days are taxable.
However, in Public Document (P.D.) 87-69 (02/27/89), the Tax Commissioner determined that fees charged for the use of certain facilities were not taxable provided that no tangible personal property was included in the fees charged to customers. This same determination was set out in P.D. 98-85 (05/07/98). Accordingly, as I find the Taxpayer's current situation to be analogous to those prior decisions, I will have the department's audit revised to remove those charges that represent a nontaxable service. As the Taxpayer has paid the entire assessment, the tax and interest paid on the contested issue will be refunded. The Taxpayer may expect to receive its refund within two to three weeks.
Copies of the public documents cited are included for reference purposes. These and other reference documents are also available online in the Tax Policy Library section of the Department of Taxation's web site, located at www.tax.state.va.us.
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/38259G
Rulings of the Tax Commissioner