Tax Type
Retail Sales and Use Tax
Description
Lodging; Access to Telephones for Local Calls
Topic
Taxability of Persons and Transactions
Date Issued
12-03-1992
December 3, 1992
Re: §58.1-1821 Application: Retail Sales & Use Tax
Dear****************
This will reply to your letter of September 1, 1992 in which you seek refund of sales tax remitted by one of your properties, the**************( the "Taxpayer"), to the department for the period July 1989 through June 1992 which you believe was erroneous.
FACTS
The Taxpayer, a motel, seeks refund of sales tax paid to the department but not collected by the Taxpayer on charges to customers for access to telephones for local calls. The charge is a one-time fee for access and entitles customers to unlimited use of the phone for local calls. Customers are not charged on a per call basis. You maintain that the charges should not be taxable.
DETERMINATION
Va. Code §58.1-603 provides that the sales tax is imposed on "the gross proceeds derived from the sale or charges for rooms, lodgings or accommodations furnished to transients.,.." Virginia Regulation (VR) 630-10-48 further explains the tax treatment of additional charges made in connection with the rental of rooms. It provides that:
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- [a]ny additional charges made in connection with the rental of a room or other lodging or accommodations are deemed to be a part of the charge for the room and are subject to the tax. For example, additional charges for movies, local telephone calls and similar services are subject to the tax.
In the instant case, the lump-sum charge for access to the telephone for local calls is made in connection with the rental of rooms and thus is taxable.
Accordingly, I find no basis for a refund of sales tax previously remitted to the department on such calls.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/6399H
Rulings of the Tax Commissioner