Tax Type
Retail Sales and Use Tax
Description
Meals provided free to employees
Topic
Collection of Tax
Exemptions
Date Issued
03-21-1991
March 21, 1991
Re: Request for Ruling: Retail Sales and Use Tax
Dear**********************
This will reply to your letter of December 21, 1990 in which you request a ruling regarding the applicability of Virginia retail sales and use tax on meals furnished to employees of***********(the Taxpayer) free of charge.
FACTS
The Taxpayer furnishes meals to its employees free of charge and has been reporting the cost of these meals as tangible personal property purchased without payment of sales and use tax withdrawn from inventory for use on their sales and use tax returns. The Taxpayer has a business license as a restaurant. The Taxpayer requests a ruling on the applicability of the retail sales and use tax on these meals.
RULING
Va. Code §58.1-608(3)(g) provides an exemption from the sales and use tax for meals furnished by restaurants or food service operators to their employees. Thus, food and food products withdrawn from inventory by restaurants and food service operators to furnish free meals and drinks to their employees, unlike the withdrawals from resale inventory, escape taxation.
Thus, the Taxpayer should not report withdrawals from inventory for restaurant employee meals on the Sales and Use Tax Return. The Taxpayer may request a refund of tax erroneously paid as allowed by Va. Code §58.1-1823 (copy enclosed).
Refund requests must be filed with the department within three years from the date the tax became due. Virginia Regulation 630-10-89 (copy enclosed) further explains the refunds of sales and use taxes to dealers.
Please forward the necessary information to the department's office Service Division, Taxpayer Assistance Section, P.O. Box 6-L, Richmond, Virginia 23282.
If you have any questions regarding this matter, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner