Tax Type
Retail Sales and Use Tax
Description
Private campground membership and dues
Topic
Exemptions
Date Issued
07-05-1989
July 5, 1989
Re: §58.1-1821 Application/Sales and Use Tax
Dear***************
This will reply to your letter of February 24, 1989 in which you seek the correction of sales and use tax assessed to your client, ***********as a result of an audit for the period June 1985 through May 1988.
FACTS
************* ("The Taxpayer") is a privately owned campground. The Taxpayer is engaged in the business of selling memberships in its camping resort. As the result of a recent audit, the Taxpayer was assessed sales and use tax on various untaxed purchases and untaxed membership sales and annual membership dues. The Taxpayer is contesting the portion of the audit relating to the untaxed membership sales and annual membership dues based on the fact that it is not primarily engaged in the business of providing overnight accommodations and does not sell its resort interests to transients.
DETERMINATION
Under current law, the sales and use tax applies to certain rentals of accommodations to transients, including rentals of lodging for less than 90 continuous days by camping grounds (see Virginia Code §58.1-602(14)). Thus, the payment of a membership fee and annual dues for the purchase of campground space would be subject to the tax.
However, legislation was enacted by the 1989 General Assembly which would effectively exclude camping membership and dues from the sales and use tax. Senate Bill 670 (Chapter 581), copy enclosed, defines the term "transient" to exclude the purchaser of camping memberships or similar contracts or interests that permit the use of, or constitute an interest in, real estate. This bill is effective July 1, 1989, with retroactive effect to January 1, 1985.
Therefore. effective with the date of the law change, membership fees and annual membership dues for camping grounds are exempt from the tax. Accordingly, the portion of the audit relating to sales of camping memberships and annual membership dues will be abated. The department will hold the assessment in abeyance until the law change becomes effective on July 1, 1989 and issue a revised notice of assessment to the Taxpayer at that time.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner