Tax Type
Retail Sales and Use Tax
Description
Hotel accommodations less than 90 days
Topic
Taxability of Persons and Transactions
Date Issued
03-22-1993
March 22, 1993
Re: §58.1-1821 Application: Retail Sales & Use Tax
Dear*************
This will respond to your letter of September 18, 1992 in which you seek correction of a sales and use tax assessment to your company, the*********** (the "Taxpayer"), for the period January 1990 through May 1992.
FACTS
The Taxpayer, a hotel, was audited and found to have failed to collect the sales tax on any room with which it had contracted with airlines. It, however, had taxed rooms used in excess of the contracted number. The Taxpayer contends that it has been using the same procedure with regard to such rooms for the past six years and that two prior audits by the department failed to question the procedure. Accordingly, the Taxpayer suggests that the assessment should not have been made.
DETERMINATION
Virginia Regulation (VR) 30-10-48, copy enclosed, specifically provides that the "tax applies to the sale or charge for any room or rooms, lodgings or accommodations furnished to transients by any hotel, motel, inn, tourist camp, tourist cabin, camping ground, club, or other similar place." It provides further, however, that the tax "does not apply to rooms, lodgings, or accommodations supplied to a guest for a period of 90 continuous days or more."
The department's regulation with respect to this issue is very clear in this regard, as is the law. A reading of the regulation or the law clearly would have indicated that the Taxpayer's method of collecting tax on contract rooms was improper. Further, the Taxpayer has presented no direct evidence that the process was explicitly or implicitly approved by prior auditors. Accordingly, the assessment is correct and is due and payable.
You will shortly receive an updated bill with interest accrued to date which must be paid within 30 days to avoid the accrual of additional interest and collection actions.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/6445H
Rulings of the Tax Commissioner