Tax Type
Retail Sales and Use Tax
Description
Sales For Resale; Motion Picture Operator's Purchase
Topic
Taxability of Persons and Transactions
Date Issued
02-26-1992
February 26, 1992
Re: Request for Ruling: Sales and Use Tax
Dear**********
This will reply to your letter of November 7, 1991 in which you request a ruling as to the sales and use tax application to napkins, straws and carbon dioxide used and distributed through theater concessionaires.
FACTS
******** (the Taxpayer) operates motion picture theaters throughout Virginia. The Taxpayer sells popcorn, soft drinks and candy through their concessions. At the time of the sale of the popcorn, soft drinks, or candy, the Taxpayer also provides napkins and straws to their patrons. In addition, the Taxpayer purchases carbon dioxide which is mixed with syrup, water and ice to produce the soft drinks sold in the theaters. The Taxpayer is requesting a ruling as to their sales and use tax responsibility with respect to the purchase of napkins, straws and carbon dioxide.
RULING
Virginia Regulation (VR) 630-10-64 addresses meals served by restaurants, hotels, motels, clubs, etc. Subsection F of this regulation deals paper products furnished with meals and states, in part. the following:
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- Paper doilies, paper placemats, plastic silverware, bags and similar items furnish with meals and which are disposed of after use by only one customer are also considered a part of a meal and can be purchased exempt under a Resale Certificate of Exemption.
While the Taxpayer is not in the business of furnishing meals, they do sell consumable food items to their patrons. Napkins and straws furnished with food items and disposed of by the customer are considered as part of the purchase price and may be purchased tax exempt under Form ST-10, Resale Exemption Certificate.
In regard to the carbon dioxide used in fountain drinks sold by the theaters, the carbon dioxide clearly becomes a part of the item being sold and may also be purchased under a Resale Exemption Certificate
If you should have any further questions, please feel free to contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
TPD/5730K
Rulings of the Tax Commissioner