Tax Type
Retail Sales and Use Tax
Description
Restaurants; Meals sold to nonprofit organizations; Cooking oil purchases
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
10-27-1989
October 27, 1989
Re: Request for Ruling/ Sales and Use Tax
Dear***************
This will reply to your letter of March 13, 1989, concerning the application of sales and use tax to the purchase of cooking oil by fast food restaurants and to the sale of meals by such restaurants to representatives of certain nonprofit organizations. These issues are addressed separately below.
Cooking Oil
§58.1-603 of the Virginia Code imposes the tax upon every person who engages in the business of selling at retail in this Commonwealth. Virginia Code §58.1-602 defines "sale at retail" to mean a sale to any person for any purpose other than for resale. Inasmuch as the cooking oil in question becomes a component part of the products being sold by the restaurant, such oil may be purchased exempt of the tax by the restaurant under a resale certificate of exemption.
Meals
§630-10-64 of the Virginia Retail Sales and Use Tax Regulations provides that retail sales of meals by restaurants are taxable. While an exemption from sales and use tax is available to certain nonprofit organizations for their purchases of tangible personal property, the department has traditionally held that the exemption does not generally extend to the purchase of meals or lodging by representatives of such organizations. It should be noted that this rule also applies to state and local government employee purchases of meals and lodging. (See VR 630-10-45, copy enclosed). In such instances, the true consumer of the meal is deemed to be the individual, and not the nonprofit organization or the applicable state or local government. (See Commissioner's Ruling dated May 27, 1988,(Public Document 88-121), and opinion of the Attorney General dated May 14, 1970, copies enclosed). Therefore, restaurants should also apply the tax to the sale of meals to representatives of such organizations.
I trust this answers the questions posed in your letter; however, please contact the department if you have additional questions or if we may be of any further assistance.
Sincerely,
W. H. Forst
Tax Commissioner
Related Documents
Rulings of the Tax Commissioner