Tax Type
Retail Sales and Use Tax
Description
Meals purchased at public restaurants by state agency for patients
Topic
Taxability of Persons and Transactions
Date Issued
03-08-1990
March 8, 1990
Dear ****
This will reply to your letter of February 8, 1990 requesting a ruling on the application of the sales and use tax to the sale of meals by restaurants to the ****.
Facts
**** ("the Department") is a Virginia state government agency. On occasions, the Department takes its patients/residents ("patients") to dine out at public restaurants. The patients are wards of the state and participate in the dining activity as a form of outside activity therapy prescribed by physicians as a part of the patients' treatment plans. The meals consumed at the restaurant by indigent patients are paid for out of public funds while all other patients pay for their meals with their personal funds.
The Department requests a ruling as to whether it may purchase meals for the indigent patients exempt of the sales tax under a sales and use tax certificate of exemption.
Ruling
Please find enclosed copies of several rulings issued by the Department of Taxation, as well as a 1970 opinion of the Attorney General, concerning the general question raised in your letter. As you will note in the rulings, state government agencies do not enjoy an exemption from the sales tax when purchasing meals and lodging, notwithstanding that such purchases are paid for directly by the agency and out of public funds. No certificate of exemption is acceptable in such instances. It should be noted that this has been the consistent policy of the Department of Taxation since the inception of the sales tax in 1966. Accordingly, the meals in question are subject to the tax.
I trust this information will answer your questions; however, please let me know if you have additional questions or if we may be of any further assistance.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner