Tax Type
Retail Sales and Use Tax
Description
Government transactions; Regional airport authority
Topic
Taxability of Persons and Transactions
Date Issued
07-14-1994
July 14, 1994
Re: Request for Ruling: Retail Sales & Use Tax
Dear*********
This will reply to your letter of June 16, 1994 in which you seek clarification of the tax status of purchases made by the*********** (the "Taxpayer"), a regional airport authority created to acquire from the federal government.
RULING
Va. Code § 58.1-609.1(4) provides an exemption from the retail sales and use tax for:
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- Tangible personal property for use or consumption by the Commonwealth, any political subdivision of the Commonwealth, or the United States.
The department traditionally and consistently has held that purchases of tangible personal property by the United States, the state and its political subdivisions are exempt from the tax only if the purchases are pursuant to required official purchase orders to be paid out of public funds. Sales to federal, state or local governments without the required purchase orders, or to their employees for their own consumption or for use in carrying out official government business, are taxable.
Purchases of meals, lodging and other accommodations are exempt from the tax only when made by the federal government or federal employees traveling on government business and when payment for such is made directly by the federal government pursuant to an official purchase order (e.g., by direct billing to the government or through the use of a government credit card). Purchases of meals, lodging and other accommodations by state or local governments or their employees are taxable regardless of the method of payment.
Accordingly, while the Taxpayer qualifies for the governmental exemption on its purchases of tangible personal property, as a regional authority, like the state and local governments, it is not entitled to an exemption for its purchases of meals, lodgings and other accommodations.
For your information, I am enclosing a copy of the recently revised and adopted retail sales and use tax regulation relating to governments.
If you have any further questions about this matter, please let me know.
Sincerely,
Danny M. Payne
Tax Commissioner
Rulings of the Tax Commissioner