Tax Type
Retail Sales and Use Tax
Description
Lodging for governmental employees
Topic
Taxability of Persons and Transactions
Date Issued
11-20-1989
November 20, 1989
Re: Request for Ruling/Sales and Use Tax
Dear******************
This will reply to your letter of September 29, 1989 in which you request a ruling as to the Virginia retail sales and use tax application to lodging furnished to governmental employees.
FACTS
On occasions, ************* (hereinafter the "Agency") employees are required to travel overnight within the state of Virginia on official government business. The Agency employees are required to pay for the accommodations which they will be reimbursed for by the Agency. The Agency is requesting a ruling as to the sales tax exemption status of their employees when staying overnight in the state of Virginia.
RULING
§630-10-45(A) of the Virginia Retail Sales and Use Tax Regulations (copy enclosed) deals with the Federal government and states, in part, the following:
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- Sales to governmental employees for their own consumption or use are taxable. For example, if a federal employee is traveling on government business and payment for meals and lodging is made directly by the federal government pursuant to a purchase order (e.g., by direct billing to government or use of government credit card), no tax will apply. However, if the employee pays for meals and lodgings with personal funds and will be reimbursed by the government or utilizes a travel advance, no exemption is available even though the employee may be traveling pursuant to official government orders.
As can be seen from the above, there is no exemption available unless accommodations are paid for directly by the federal government pursuant to an official purchase order, government credit card, or government check. I have enclosed previous rulings by the department which support this position.
If you should have any further questions, please feel free to contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner